The last judgment: an analysis of the financial performance of the game in the early access

In May of this year, two years later in the state of Early Access and three and a half years of development, we released the full version of Judgment: Apocalypse Survival Simulation . I decided to take the time to analyze our financial data so that it would help other indie developers who have no idea what road they will have.

Note: all sales data presented in the post are the sum of values ​​for all stores. At the moment, Judgment is sold on Steam, in the Humble Store, on our website (using the Humble Widget), Green Man Gaming and Fanatical. No bundles, just direct sales.

The price we pay to be indie

Creating games is an expensive process. It involves many different areas. It is very rare to find someone equally successful in all of them, so a team usually takes part in game development or a developer pays for services to contractors. The values ​​shown below include the total cost of developing Judgment for 40 months, which we have spent so far, including 15 months spent on pre-release, and the other 25 - on Early Access. Obviously, after the full release there will be additional costs, because we will continue to improve and advertise the game.

This is what our cost of making Judgment consisted of:

• Total expenses for approximately 40 months of development: $ 650,000
• Programming: 280,000 dollars
• Game design: 118,000 dollars
• Marketing: 94,000 dollars
• Art: 87,000 dollars
• Production: 45,000 dollars
• Scenario and sound: $ 8,000
• Office, bureaucratic and other expenses: $ 18,000

Very expensive! But it is worth mentioning that these expenses do not include lost earnings (possible income, which we could have earned if we worked for someone instead of developing Judgment).

Employee costs

The main part of the cost is the cost of staff: all the costs of programming and production, most of the game design and art, as well as a substantial share of marketing costs.

Funds for employees do not have to be taken from your own pocket, if you manage to gather a dedicated team with experience in all these areas, and its members are willing to work only for a fraction of the profits.


As you can see, external costs amount to only 50,000 dollars (7.7%). If our team worked without a salary, then for all three and a half years we would spend only that amount out of pocket. Plus, many of these expenses were needed only when we began to generate sales revenue from early access.

However, from my own experience, I know that creating such a team is an extremely complex process, and unpaid team members tend to lose their motivation, which creates an unstable working environment. I would recommend as far as possible to pay team members at least a modest fee in addition to promises of a share of sales. That is, you will need a larger initial fund and / or investment. In our case, the team members from the very beginning received a decent salary, as well as a small share of the income.

other expenses

Along with staff costs, there are additional costs that are usually paid out of your pocket. In our case, these were sound, script, marketing, software, and general bureaucratic costs, such as lawyers, accountants, and company registration fees.

The marketing costs include the working time of employees (we spent a LOT of time on marketing), and external expenses, such as participation in conferences, paid advertising, PR firms and consulting services. I will tell you more about marketing costs below.

Income

During 40 months of work on Judgment, the company's total revenue amounted to 560,000 dollars. Of these, 80,000 dollars were earned from providing programming services to other companies during the first year of development, and the remaining 480,000 were received from Judgment sales in early access. $ 80,000 was not enough to cover our actual expenses before the release of the game, so we had to take a chance and invest our own funds even before we started receiving the first sales revenue. This money is taken from my own savings, which I gathered, having worked as a programmer in the field of network security for many years.


480 000 is the actual amount of money we collected on our bank account after the stores took their share, were charged for payments by credit cards, VAT, refunds and other similar costs. The total amount paid by the players for the game was much higher.

Profit

The math is simple - we received an income of 560,000 dollars, and development costs amounted to 650,000 - that is, the total current losses at the pre-release and early access stage amounted to 80,000 dollars. [approx. Lane: strange mathematics, but the author was not at least wrong with the order.]


Considering that this is our first game, and that along with the money we have gained valuable experience, reputation and connections, we are very pleased with this result. However, our story is not over yet. The game has gone through a full launch, which means even more revenue, and we plan to continue working on the game, which means additional costs. I predict that given all this, Judgment will still give us a profit.

Sales schedules

Let's see how Judgment was sold during the Early Access phase:


* The last column in these graphs contains data only for the first half of April 2018.

The monthly sales schedule shows that after a month of release, which was one of the best, we had a rather slow period. In this period, we focused on improving the game, and did not make any discounts, except for store sales, such as the summer sales of Steam and Humble, and did not make any special efforts to promote the game.

A few months later, around October 2016, sales increased significantly. This growth is difficult to explain. The players' score increased and we released several important updates, plus improved the pages in the store and updated the trailer. We do not know exactly what contributed to such changes, but we believe that they are somehow related to the improvement of the system of tags left by players on Steam, thanks to which the store's algorithm began to recommend Judgment to more suitable players.

June 2017 is still our strongest month, in which we released the German and Chinese versions of the game, which coincided with the summer sale discounts.

It is also interesting to consider October 2017. In September, we increased the price from $ 14.99 to $ 19.99. As you can see, as a result, it did not have a significant impact. Each sale now brought more, but their total number decreased, nulling the effect. Let's look at the number of copies sold:


You can clearly see the fall in October 2017 compared to September, while the graph of income shows more or less stable values. Raising prices did not improve and did not reduce our income. However, at a higher price, we could make great discounts. Potential sales at $ 14.99, which we lost by raising the price to $ 19.99, are not necessarily lost - perhaps buyers are just waiting for discounts.

Now let's take a look at the daily sales schedule and try to analyze the main points.


We see the same trends as in monthly sales, but there are more specific peaks to which you should take a closer look. The first peak was about a month after the release, in May. At this point, a video about the game was published by youtube with two million subscribers. Thanks to this, we sold about 400 copies of the video, which is quite a lot, considering the low number of sales during this period.

Then there is a small surge on Black Friday 2016 and a peak higher in December 2016 thanks to participation in the holiday sales. Usually, the first few days show higher peaks with a 400 percent increase in sales, but towards the end of sales, they gradually decrease to 150–200% of normal indicators. The average daily increase in sales during discounts was about 150%.

After the holidays, you can see a very high peak in March 2017. This was our first sale. We reduced the price by only 10%, but thanks to the discount, we became more visible in all stores, which increased conversion rates.

The next surge starts around May 2017, when we released the German and Chinese versions of Judgment. The peak of this surge in June 2017 was the summer sale discount. You can see that the release in new languages ​​not only created one high peak, but also completely raised the area of ​​the graph. This explains why June has so far been our strongest month - the entire month of sales is above average + the high peak during the summer sales did their job.

After that there were a few more peaks. Most of them are caused by or publishing videos of large YouTube (Thank you,Quill18 ), or discounts (seasonal sales of stores or our own).

Conclusions from sales analysis

My main conclusions from the analysis of sales graphs:

• Discounts bring profit. Even a 10% discount, if you do not want to sell the game for nothing, it still has a big impact on sales.
• Increasing prices towards the end of Early Access had almost no effect on the results. It may somehow affect in the future - for example, it will allow to give big discounts or increase the number of negative feedback from players (the high price increases the expectations from the game).
• If at first the situation was difficult - do not despair! Hard work and dedication CAN change everything. After the release, our monthly sales were very low, we earned incomes below $ 2,000 a month, which was not even close enough to cover all costs. However, a few months later, we earned more than $ 10,000 per month without discounts, and up to $ 30,000 per month with discounts.
• Adding support for new languages ​​can boost sales. Putting checkboxes on the pages of the stores in front of a new language will increase the visibility of the game for a while and increase conversion rates for the respective countries.

Marketing costs

If necessary, marketing costs can be minimized, you can approach them more flexibly. However, I do not recommend neglecting marketing. If you do not have experience in the release and promotion of the game for the PC, and no one can help you with this, then I highly recommend using marketing consultancy services as much as it will benefit you. If you can not allocate an employee who can spend a lot of time on marketing, then you should think about hiring a PR firm that will do this.

We used counseling services for almost a year before being released to EA, and they were very helpful. Then we independently graduated from EA, having spent a lot of time on all the hard work. The main reason we did this on our own was cost avoidance at a time when income was rather low. Later, when we were very busy developing and felt that we were neglecting marketing, we hired a PR firm that took on this task, and a few months ago we hired a new employee, 50% of which is spent on marketing and working with the community (and 150% from his time after we announced the outgoing full release).

Conferences

We attributed our participation in conferences to the category of marketing expenses. I highly recommend to participate in them. Basically it is necessary to get acquainted with other indies, learn from them, while remaining in touch with the industry, meet with the press / influential people, and just have a good time.

In our experience, the participation of the game in the conference - in our case it was the Indie Arena Booth booth at Gamescom - does not bring direct profit. We spent much more than received additional sales. However, I still highly recommend to participate in them, because the events help with all the other aspects I mentioned, especially in meeting other indie developers and learning something new from them. In addition, this is a great opportunity for strangers to test your game.

Paid advertising

As for paid advertising, it is very similar to participation in the conference - ads do not bring profit. We paid an average of 0.75 dollars per click, and less than one of the 50 page views ended in a purchase, that is, the price of each purchase was 0.75 * 50 = 37.5 dollars. Considering that the game is sold for $ 19.99, of which we get about $ 12, we paid for each purchase more than we earned from it. The exception was advertising on reddit, where we managed to create a very targeted audience, reaching a price of $ 0.12 per click. However, the effect did not scale, and the maximum that we could get from such narrow targeting was about 100 clicks per day, regardless of how much we would like to pay.

It is important to consider some aspects:

• I am not an expert. Although I did research before setting up an ad, a specialist could get a better CPC, provide better targeting or create more attractive ads.
• PC game stores do not accurately measure conversion rates. I calculated the figure manually, dividing the total number of page views by the number of sales. If you consider visits only from conversions in advertising, then this indicator can be either better or worse.
• In addition to direct sales, there are many hidden benefits, for example, stores prefer to promote your game due to external traffic, the effect of familiarity with an object arises , or powerful people can see your advertisement and start promoting the game.

stay with us

That is our story at the moment. The small team worked for three and a half years and finally released the full version of the game. We like to chat with other indies, so you can contact me on Twitter to discuss our story or share yours. In the future I plan to publish our further adventures in Early Access.

November 2018 update

Six months after the full release, we finally reached the “security zone” - now the game is officially profitable. It took more time than I expected because of the continued work on the game after the release (and, therefore, additional expenses). The release of the final version was good, but a little weaker than I expected - on all platforms we sold about 15,000 copies, but after the full release, less than 2% of the wish list turned into sales.

After full production, there was a 50-60 percent decline in total sales. At first, I thought it was due to the fact that the game was no longer in early access, but as it turned out, many indie developers also suffer from similar falls, along with which the visibility of the game decreases. While we believe that the main reason is the change in the algorithms of the Steam store by Valve.