Hi, I’m Karl Kontus, one of the creators of a free games market research platform Video Game Insights. In this article I will cover how much a typical indie game developer is expected to earn by releasing a game on Steam. Is it boats and private islands for indie devs or super noodles and credit card debt?
Let’s start by looking at Steam games lifetime gross sales.
This graph looks at all 41,000 games on Steam and ranks them into percentiles by estimated sales. I’ve used the Boxleiter method for sales estimates, which has its imperfections, but works well when looking at a large sample size.
- Over 50% of the games on Steam have never made more than $5,000
- Only 23% of the games have made over $50,000, an average annual salary for a full time game developer in the US
Oh dear. That doesn’t sound promising. But then again, the majority of the games on Steam are hobby projects and c20% of the games are free to begin with. So let’s apply some filters to our criteria.
Earnings potential of a full time solo dev
I’m narrowing down the list by looking at self-published single player indie games that are fully released (eg not early access). They have to have at least 5 ratings in order to remove the really low end of games on Steam and it has to be in the price range of $4.99-$19.99, where most indie games lie. I’m also only looking at games released after 2018.
We’ve narrowed the # of games down from 41,000 to 3,300. That’s better, but we’ve also removed the AAA games with hundreds of millions of sales. So where does it leave us?
Bottom Quartile: <$5k / game
Median: $13k / game
Top Quartile: $44k / game
Top 15%: $108k / game
Top 5%: $555k / game
Only 15% of indie games make more than $100k. Scanning through games in that scale we find examples like MicroTown and Horizon’s Gate – Games with beautiful, but simple art and refined look. This looks like the kind of target an ambitious solo dev could set.
What it means to be top 15%?
Now, leaving aside that the solo dev has to be good enough at art, coding, marketing and the business side and needs a bit of luck on their side, let’s have some faith and say we can get there. Let’s also assume that the development time of such game would be c. 1 year, which is on the faster end, but not unheard of.
You’ve achieved greatness! You’ve proven the doubters wrong and have made it to the top of the solo dev food chain. You’ve made it to the top 15% of indie games in terms of earnings on Steam. Where’s your $100k?
Not so fast.
This $108k is the gross revenue, not including Steam’s cut, discounts, chargebacks, returns etc. Let’s see where we get after taking these out.
Gross Revenue: $108k
Post Discounts: $86.4k (A typical game like this sells a fair amount of games at discounts of >50%. On average, a good rule of thumb is to apply a 20% discount to gross revenue to account for discounts)
Post Returns and Chargebacks: $77.8k (Typically c. 10% of games are returned and chargebacks applies)
Net Revenue Post Steam Cut: $54.4k (Steam takes 30% of the revenue)
So, even in the optimistic case, defying odds and making it to the top, a solo indie dev would make as much as an average developer in a typical games company in the US, but without the job security and other benefits.
Is this the death of the dream?
Well, no. There are successful solo devs out there and there are many things a developer could do to improve their chances. I would argue that most of these, however, lie on the business and marketing side. A successful solo developer must realise that they are a solo entrepreneur. That means making the right pricing decisions, devoting a LOT of time on marketing efforts and doing proper research into the game space and competitors before fully getting into the development phase.
Being a solo dev is an option, but one that comes with some typically less appealing sides of game development if you want to succeed.