A week ago, I just finished showing our game, Reflections, in the Boston Festival of Indie Games. It was a great event, and the response we received was fantastic. What wasn't clear to the other people around me was that I traveled there from Phoenix with nothing but $100 on a credit card, that I had spent my previous month's wages on the flight down there, or that I almost got stranded in Boston. It was actually one of the most stressful 72 hour periods in my entire life.
A few days after I got back, I checked our Steam comments and noticed this one on our Grave Greenlight page:
I know that the negatives always seem to speak louder than the positives, and I know one comment on Steam hardly reflects the grand total of the opinion of the people out there. Even so, this particular comment hit me pretty hard, and broke the handle on a faucet of emotion that I've been trying to shut off for a while now.
So, after much consideration, I've decided that I want to talk about the first 18 months of running an indie studio, about our Kickstarter project, launching on Steam, about money and about our struggles. I don't know if this is a good thing to do, as it puts me in a fairly vulnerable position and might make some people doubt me or my company as a whole. I have a feeling that my experience isn't totally unique, though, so I might as well give it a shot and see what happens.
Broken Window Studios was founded in early 2014 by myself and my wife Aby, and we've been working at it full time since about May of that year. Our larger title, Grave, earned over $37,000 dollars from Kickstarter, and a small project we released a few months ago on Steam Early Access has been receiving a lot of positive response. You can take a look at our Trailers for Grave and Reflections to get an idea of what we do.
Over the past 2 years, both before and after officially starting our company, we've shown our games at GDC, Phoenix Comicon, SXSW, E3, RTX, The Phoenix Art Museum, our local IGDA chapter, and several other events. We have been featured in Polygon, Gamespot, PC Gamer, Rock Paper Shotgun, and Game Informer, both digital and in print. Our games have been played by PewDiePie, Markiplier, TheSw1tcher, jacksepticeye, TheRPGMinx and a host of others.
We own our IP and have been able keep the studio afloat for this time without doing contract work as a studio.The only contract work we did was taken on by me, and was done so I could keep our team of 3-6 people working. Although it's in Early Access, we have a released title on Steam with 87% positive reviews and another one coming down the road.
To make everything a little clearer, I wanted to provide some specifics about our company's finances, which will probably be of the most help to people who are looking to start out a similar venture, even if we're just a cautionary tale.
Nearly everything we have spent on the company, outside of a few licenses and pieces of hardware, has been for wages. These have also been extremely bare bones wages; for the bulk of our time, my wife and I have made between $1,000 and $1,300 a month each, as have the artists we've brought on until this point. Programmers are a bit harder to come by, so we pay them more, but it's still well below industry standards.
At our largest size, we were 6 people; we are currently only 3. When I took on contract work, I used the excess of my earnings to provide slightly better wages. One month, contract work I did myself earned me $15,000, which I immediately put back into the company, except for the $1,000 I paid out to myself for living expenses.
Until this month, we have never missed payroll or even been late with pay; I've taken all additional expenses out of what my wife and I would normally make.
In summary, our wages have been ridiculously below that of a traditional AAA company. In fact, most of the people who worked at the studio were making less than the wage of a full-time McDonald's employee at entry-level. We have neither been living well nor wasting the money we spend.
The Total Cost
To this date, our studio has cost us approximately $119,000 to operate. Out of that money, $32,000 was from Kickstarter, since a portion of the KS total is taken for Kickstarter and Amazon Payments, as well as having some non-payers whose cards are declined during the pledge collection process. Of the remaining $87,000 we spent, $33,000 was the result of loans from family and friends, many of whom didn't really have it to give. $32,500 was the result of me investing all of my earnings from a few very generous months doing contract work, and $15,000 was an investment made specifically to Reflections, which expected a 2x return (meaning we actually owe them $30,000 back).
The little that remains has been provided by revenue from our released title, Reflections, which has had sales through Steam, the Humble Widget, and a bundle. Our gross revenue on Steam, before they take their 30%, has been a little bit over $8,000. It is also worth noting that, of all the money listed above, $57,000 of it is money we will actually owe back. That's almost twice my college loan debt.
To be honest, putting all this down on paper somewhat boggles my mind. In the span of a little over a year, I went from someone who could barely rub two pennies together, to someone who spent $119,000 dollars on two games and received more money for it from family and friends than I ever thought possible. The one positive side to this is I found people far more willing to help once we actually had something than they ever would have been if I had started with asking for help. I don't think any of the people we asked would have done so prior to our Kickstarter, but having success legitimized our efforts enough to make it seem plausible. I can't thank them enough for their generosity. That being said, I've been so broke the entire time we've been doing this that the actual magnitude escaped me until I sat down to write this.
To provide context of our costs, in case the numbers seem as large to you as they do to me, a similar studio at the low end of the industry standard would have cost $476,000, roughly four times as much, with the same number of people and exact same workload. If the studio had been staffed appropriately, that number could easily exceed $1,000,000. Considering that we've been in operation for about 18 months, the $119,000 pricetag isn't actually bad at all for a studio or production of our size.
Unfortunately, at the end of 2014 we realized that we were going to be in a very bad position financially. The studio, with 6 employees, was burning through $8400 a month. That wasn't going to fly without additional resources.
Finding More Funding
When we realized Grave was going to be larger, we contacted several game funding outlets and had varying degrees of interest, but it ultimately yielded no success. Most of them led us on with bad deals or faulty promises.
One investor offered a substantial sum of money to us for the production of Grave, but turned out to be more like a loan shark than a publisher or investor. Despite claiming that they were "better than a publisher," they wanted terms that would require us to completely transfer ownership of our IP to a holding corporation, and require that we totally pay back the investment before receiving royalties of less than 50%. Their terms also defined delays in production as tantamount to "defaulting" on a loan, which would have given them sole ownership of the game should we have needed more time or resources than originally anticipated. Needless to say, we ended up not taking their offer and I think it was the right call.
Another funding provider led to a particular difficulty for us, as they contacted us, unsolicited, and seemed to be prepared to offer funds with really great terms. We built a proposal and vertical slice of Grave over several months until our resources were near depleted, attempting to spend that money on putting our best foot forward. Communication with our representative had been spotty and we went from having what appeared to be a sure thing to being rejected in the span of a few hours. That was a seriously damaging moment and set us back hugely.
At this point we had used a large percentage of our Kickstarter money on building the first third of the game, and had been depending on the existence of more funding to keep the project slated for a release.
Not enough Indie, Too Much AAA
Oddly enough, one of the criticisms levied at us from funders, and one that I think actually has been a significant hindrance, has been that we've been classified as "too AAA" for an indie studio. This is a reasonable criticism, even if it might seem counter-intuitive; our games are more ambitious than most indie titles, but we don't have the matching resources or track record of a larger studio.
What this has done is put us in a nether region, where our products take a lot of time to develop and look unattractive to small investors because of how large they seem, but aren't large enough to fit into a AAA investment category. The irony of this is that we have so far done an insane amount of work on very little money in the grand scheme, but the fact remains that the resources we need are just high enough to be a risky investment. Because we aren't 100% self-reliant, we can't just keep working until it's done, and it's hard to "prove" our ability to execute to an investor.
Deciding to Delay Grave
The decision to switch from Grave to something smaller was not made lightly. The reality is that during our building of the first third of the game, the expense and time taken was substantially higher than we anticipated. Part of that was due to net negatives, such as having the wrong people in certain roles, some of it was due to positives, like the game generally improving substantially over our original plans. I think the game has much better potential now than it ever did before.
What we chose to do was take a small project that I had worked on in 2012, Reflections, and polish it to a release state. This was helped along by an investor was willing to offer a small sum for Reflections, since the scope was smaller and more attainable. If all went well, we were anticipating that the revenue from Reflections would be able to keep us going during our added months of Grave development. That's still our current goal, but there have been some substantial roadblocks.
Struggles with Early Access
We launched Reflections on Steam June 26th, 2015 and saw the majority of our sales in the first 2 weeks, after which they dropped off substantially. Our total player base is about 7,000, but that comes largely from a bundle that we joined, which was a whole mess in and of itself. To date, we've had fewer than 1000 people purchase the game.
We have had a few good stories written about us, such as our features in Polygon, but on the whole the press has been tentative to write about us, largely based on their policies for not covering Steam Early Access games. This makes sense; there's a lot of Early Access titles, and a lot of uncertainty about their viability as products.
Our decision to go on Early Access was a bit of a gamble. I knew that we needed to do more testing of the game's concept, I knew we needed to find out how our Storyteller System worked when given to users, and I knew we needed to get more people playing the game. However, there was also the reality that we needed to attempt to gain some revenue from Early Access. My hope was that Early Access would cover the cost of improving Reflections over a few months, and then the full release would give us the funds we needed to complete Grave. So far, that doesn't seem like a terribly likely scenario.
Benefits of Early Access
Early Access has been great for us in a lot of ways. We've improved the game drastically with the feedback we've received. The game is extremely experimental, and being able to actually leverage those experiments, turning them into actionable results that improve the product, has been a lifesaver. As a new studio, it's also helped us learn a lot of lessons about how to improve the quality of a game in more subtle ways, including options, menu systems and tons of details that escaped our notice prior to the initial release.
The Downside of Early Access
Ultimately, I don't think Early Access is a good fit for a game like Reflections. Games with persistent worlds or multiplayer usually do pretty well, but Reflections relies too heavily on subtle narrative engagement to be effective in this model. Once you've experienced an unfinished chunk of narrative, it's difficult to go back and enjoy it properly once it's more solidly developed.
We start with gameplay first in our games, and much of the narrative, austensibly the focus of Reflections, has been delayed to focus on the underlying systems, like our Storyteller engine and progression branching. We're gradually filling in the shell of a game that is actually three or four times larger than it appears to be, thanks to branching, but what most people see is a game that feels hollow and is only about an hour long. I think we've probably turned off customers who would have liked the finished product, but are too disillusioned by its current state. Most of the negative reviews we have now are criticizing the elements that we've spent the least time on or haven't updated yet, which is both promising and discouraging. I just want to tell those people that we agree and are working on it, but obviously that doesn't affect the overall lukewarm reception we're receiving.
I wouldn't select Early Access again as a release option if given the choice. I value what it does for testing and feedback, but it's very difficult to put your game in the hands of people who expect a finished product while you are still developing and evolving the concept. I think it dillutes the entire experience, and that's something I really don't want to do in the future. That being said, as a small studio, we have to figure out how to resolve funding and playtesting outside of the Early Access model, and that's a pretty substantial challenge. I think that has a lot to do with why so many games come out in Early Access these days.
There's a number of reasons that I think we've had struggles with our studio, some in, and some out, of our control. I think that if I were to go back in time and change things, these are a few of the mistakes I made that should have been handled differently.
1. Staffing Up Too Early
Regarding the Kickstarter, I really wish that I had done more independent design work and planning after the campaign, instead of staffing up and getting artists and programmers together immediately. Much of the work ended up hinging on me completing design goals anyway, and I had overestimated the amount of work that could be done by the team without my oversight. In the long run, having six people working probably slowed down production, as I had to jump back and forth between my own production goals and finding things for the other team members to do.
2. Trying Too Hard to Keep Everyone Happy
As a first-time business owner, I tried very hard to keep people employed and took dissatisfaction personally, attempting to shoulder the burden of unhappy workers and poor output. What I learned too late is that I should have let people go sooner who weren't contributing, or who created a negative atmosphere. Instead, I upped their wages and hoped that my show of good faith would be reciprocated. Unfortunately, a lot of people don't draw a direct line between their own actions and the success or failure of the product they are working on, and we lost a lot of time and money trying to make a bad fit work.
I've always taken the tactic that productivity is largely a management problem, and that blinded me to real problems until they were actually doing damage. Because I learned that lesson too late, we had a huge amount of art and programming that had to be redone because of people who weren't engaged in their tasks.
3. Underestimating the work Reflections Needed
Had I known the amount of work Reflections needed to be a viable product, I would probably have made my decision differently. We thought that we could basically spruce up a much smaller game and ship it in a few months of work, but that turned out to not be the case. The game was fully functional in 2012, but the quality was significantly below what I would be willing to accept as a developer in 2015. Reflections was short and light on content, and it was in UE3, which turned out to be a nonstarter.
We had to port the game to Unity 5 and then build up a foundation of content to make it viable. That work is still ongoing, which is why the game is now on Early Access. If I had been given no limits on scheduling, I probably would have set aside at least a year to finish it properly. As it stands, that may be a realistic estimate of what the final total will be once we leave Early Access.
We needed input from the community to make sure that the game was solid, and the scope has grown larger because of that. All of this is actually good news for the end-product, as it's getting a lot better. But it's not so good for a studio who has very little resources to it's name. It also means that the delay of Grave is going to be longer than we had intended, which brings the next issue into fuller focus.
4. Not Knowing How To Address our Backers
Every day I look at my email, I'm waiting for the Kickstarter message that accuses us of being frauds or thieves. Whenever I see we have a new comment, I get a knot in my stomach thinking "this is the one." We originally set our Kickstarter goal as a tentative March 2015, which we've since greatly exceeded. I honestly don't know how to counter claims that we are negligent when they do appear; we haven't delivered yet, and although we haven't stopped production and we aren't cancelling the game, I don't know what to say to our backers if they start getting angry with the time we've taken.
I've tried to be as transparent as possible about the role Reflections plays. However, I don't honestly know if we made the right call; I know that we wouldn't have been able to keep the doors open with just Grave, partly because we couldn't secure investment for it. I know that we had to set Grave aside to work on Reflections for a bit, and I know that the time Reflections has taken has been more than I had hoped. I don't want our backers to think we're dropping our Kickstarter game, but I have been afraid that modifying the plan will lead them to lose trust for us. I also realize that there are risks no matter what we do, and I don't know how to manage that sort of communication without someone assuming, incorrectly, that we're being dishonest.
5. Bundling Too Early
One mistake that I fully concede was going into a bundle too early. As a novice at launching on Steam, I was contacted by a number of bundle outlets and asked if we wanted our newly launghed game in the bundle. I felt like I didn't want to miss the opportunity, so I agreed to a bundle as a way of getting us more exposure. It was a mistake, however, and didn't even earn us a substantial return, despite reaching almost 8,000 people. To be honest, I don't think the bundle negatively effected our sales in a substantial way, as they had already slowed before the bundle was released. However, it didn't do the good that I had hoped it would, and it earned us a lot of criticism from our fans.
It Gets Really Hard Sometimes...
So with all of this, it's safe to say that we've had a struggle. I've found that a couple of things have made this especially difficult recently.
Submitting to Festivals
We've submitted to a number of festivals and have had some success, including Boston FIG, The MIX at GDC and SXSW, BitSummit and a few others. However, in the case of both our games, they need more work to be properly considered for larger events.
I submit to every festival we can, which explains the success we've already received. We've also submitted to IGF, Indie Megabooth, Indiecade, and many others, but the response is generally the same; they see potential, but the games are just not up to the quality that they need to be yet. I agree, and that's why I've pushed as hard as I have up until this point to see them through. It's still disheartening to get rejected over and over, and it wears at your resolve.
I had used my pay from last month to purchase a $500 vacation package to Boston with a flight, car and hotel, to show our game at Boston FIG, where we'd been accepted by a slim margin. When I arrived, I found that they wouldn't give me the rental car without a $200+ deposit, which I actually didn't have. This left me with no means of travel and a hotel that was 22 miles away. A single Uber ride cost over half of the money I had on my only free credit card. I ended up instead lugging 100 pounds of equipment through Boston's streets and subway system to get to the event, then spending over 12 hours in the Logan airport so I could actually get home. The only thing that kept me from absolutely despairing was that everyone I met was just a really great person, who offered way more help than I ever expected or deserved.
My computer has damage to the heatsink that was the result of the trip, which is a $7 cost that I can't actually afford. My car broke down twice in the last 4 months and I've been teaching myself to be an auto-mechanic to avoid excessive expenses. This time, however, I can't afford the $60 necessary to fix my power steering pump.
It's hard to come into work every day and know that not only do you have a huge amount of work to do, but that your resources are dwindling. I can't go hang out with friends, I can't buy lunch, and my bills are late. It's hard to think of anything else when your finances are in bad shape, and that makes the creative work behind revising the games even more difficult.
I have spent most of my few spare moments this month jumping back and forth between looking for funding, calling creditors begging for extensions, and checking my bank account to see if something is overdrawn. It's not exactly where I wanted to be after owning my own company for the better part of two years.
It's hard to describe the feeling when the things you used to be good at start to seem impossible to accomplish. It's really difficult to see the lack of progress, to know that you want to do more than you seem to be able to. I've heard people call this "burnout," but I don't feel like that really does it justice. It feels like hopelessness.
At this point, I don't know exactly how this story ends. We're still in the middle of it, looking for a way to turn a lot of adversity into an opportunity. I'm not willing to quit by a long shot, though I must say that the thought has occurred to me more in the last few months than it did during the previous 15 years I spent struggling to find a way into the game industry. When I started Reflections, Gone Home wasn't even announced, but because of lack of resources I couldn't see it through. Now, I'm having a hard time competing with a game I could have preceded.
I debated extensively whether or not to post this blog. For most people, "transparency" is spoken of as a prized trait, but it's so rarely offered that it can often be seen as weakness. I know we aren't the only studio to struggle, nor are we likely suffering the most extreme end of it, relative to other fledgling studios that never got a product out the door or who had their dreams snuffed out early. I worry that saying some of these things might smell like blood in the water to critics, and cause people to attack me or us for our mistakes. I know people on the Internet aren't always the most receptive to perceived struggle.
I don't know if people outside of this industry understand how hard it can be to make something at all, let alone how hard it can be to make something that is truly worthy of praise. Gamers tend to only see the end product, and that is totally their right as a consumer. They don't need to know or care about the developer's struggles. Yet those struggles still happen, and I think every now and then they are worth talking about.
Thank you for reading this. If it has been some help to you, I'm glad. If not, that's okay too. Writing this didn't solve my problems, but for me it's the first time I've actually put down what our experience has been like. Hopefully that, at least, is worth something.