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How does an indie publisher spend its money? Whitethorn Games shares details

"Business, business, business. Numbers. Is this working?"

When game developers sign with publishers, they already have to navigate the process of unpacking complicated contracts and mathing out how much money they can expect to receive. But what are publishers doing with their cut of a games' sales? How are they staying in business? How do developers know if they're getting a reliable bang for buck?

Devs still learning the ins and outs of signing with a publisher can take some relief this week: indie publisher Whitethorn Games (whose notable titles include CalicoLake, We Should Talk, and Wytchwood) has rolled out a rather transparent look at its company finances. The resulting information not only gives developers context for how much of a publisher's percentage is being spent on relevant services, it also gives them a benchmark against which to measure similarly sized operations.

Here are some quick key numbers from the 35-person company. Whitethorn's overhead includes an average employee salary of $51k per person, with CEO Dr. Matthew White taking home a salary of $75k per year (120 percent of the average employee's salary (White's only additional compensation comes in the form of bonuses).

On the publishing side, Whitethorn Games says the average percent of net revenue due to Whitethorn per title is 28 percent, the highest percentage of net revenue it has ever requested is 35 percent, and the lowest percentage of net revenue it's ever requested is 8 percent.

The company provides an average of $232k per title (the highest it's ever funded is $340k) and it spends on average about $56k in marketing on each game. 

Whitethorn also shared an updated version of its publishing agreement (which it first made available for developers in 2021), and copies of its employment, royalty, and contractor agreements. White told Game Developer that while he hopes some devs will use this information to sign with Whitethorn, he also wants them to use it to strike better deals with Whitethorn's competitors.

Why is Whitethorn going public with this information?

White's already worked with a number of indie developers, and told us that both from personal experience and dealing with business partners, he found that the pain of a "surprise" high number to be greater than accepting a high payment up front. 

"So if you have an idea in your head of what something is going to cost you, and then what it actually costs you is different in the wrong way, that's going to be really not pleasing," he said. "On the other hand, if you anticipate that something's going to cost quite a lot, and it does you really take that even if it's more money, you take that blow much, much more manageably."

Interestingly, there is one cost of doing business that White can't share with prospective partners: how much his company is spending on health insurance and benefits for employees. Because of how American health insurance works, the costs of insurance are directly tied to the kind of healthcare employees need/use, and disclosing that information would violate health privacy laws. 

Here's how you can use the information White and his colleagues are sharing to understand a relationship with Whitethorn Games or other publishers. If 35 people at the company make an average of $51k, and White makes $75k, you know that it spends $1.8 million on its staff every year.

If 10 percent of the team is working on your game (3-4 staffers), it's spending about $160k on your game every year. If those staffers work on your game for about two years, that's about $320k. If a hypothetical revenue split with Whitethorn gave the publisher $384k, you'd know that most of that money went to funding work on your game, while about $64k went to profits, taxes, etc.

So if you're shopping for publishers, and another developer is demanding a revenue split that will leave them with more or less than that number for two years of work, White says you should feel free to ask for details on what you're getting in exchange. It might be a better value than what Whitethorn is offering! It could also be a worse one. 

White visibly turned up his nose at the idea of publishers burying interest or multipliers in contracts—in particular he dismissed the idea of a publisher adding terms where it's entitled to 20 percent above the recoup of its costs. On Whitethorn's website, the company writes that it "does not operate on a so-called 'recoup multiplier' and recoupable expenses are clearly delineated in the contract."

This model, per White, leaves Whitethorn Games profitable, solvent, and not in debt. If the publisher you're signing with is spending numbers differently from this, that might either impact sales of your game, how much revenue you receive, or even determine if the publisher is profitable at all.

Whitethorn's approach here is fascinating, not just because it offers developers some tools to enter the negotiating room with, but also because it offers clear context on the costs of indie game publishing (when the company is based in a smaller American town). Those numbers are liable to shift in the years ahead, and White says his company hopes to keep updating its numbers in the same way it's updated its publicly available contracts.

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