The financial model of LH updates
Greeeeeeeeeeeeetings my friends!
This post is more for indie developers who want to know how much money things make.
First some basics on game budgeting:
- Every person on your game you should budget at $10,000 per month. It’s a good rule of thumb.
- You should target a 25% “profit” on your game to cover the unexpected as well as for future growth
- Steady State income represents the gross income of your game without sales, promotions, new releases, etc.
- Steady state takes 6 months to eliminate the “new game” anomaly.
- You need to take opportunity cost into account when budgeting (am I better off working on this versus that?)
- Opportunity cost is hard to calculate and is what kills most studios long-term.
The steady state of LH is $40,000 per month.
That doesn’t mean its annual income is $480,000 a year because there are lots of events that cause income spiking (Christmas is a 4X spike, Thanksgiving is a 2X spike, and the Steam July sale is a 3X spike.
For LH, that means I could justify 3 resources on it before taking opportunity costs into account. Once I consider opportunity costs, the number declines to 1 because those other 2 resources are better off on Galactic Civilizations III or Star Control or “Elemental 3” or what have you.
Before anyone poo-poos 1 resource, bear in mind that I made the original Galactic Civilizations by myself. So 1 person can still get a lot done. But that’s where we are. 1 person means that the game can continue to evolve. Some months it might be an artist. Another month a developer. In January, it was Charles (programmer) fixing bugs and tweaking. In February it was Kael doing new balance changes. In March it’ll probably be me (I have anger management issues with the game’s pathfinding).
The main funding source: DLC
DLC is really the funding source. The base game is doing $25k and DLC is picking up the remaining $15k. In effect, DLC purchases are providing the $10k resource and the $5k profit necessary to keep the game going.
The next DLC: Spouses
For those of you reading this, the next DLC is going to allow players to have spouses. Kael has meticulously designed a spouse for each player (and to be honest, they’re way cooler than the sovereigns because Kael got to really go crazy with these).
The one AFTER Spouses will probably (but not certainly) be Random Map expansion. That is, a lot more “interesting” stuff for random maps. I plan to do this one myself as I’d like to see random maps made a lot more interesting and I’ve had a lot of practice in the past year in my own “for fun” mods.