The perception of $100 000

I study the other day that the US price range deficit is anticipated to be $ 1 300 billion for 2010. Which led me to say to Thomas that we ought to ask the US government (Yes, I know we are Swedes. Yes, I know it is wrong to expect Swedish game improvement assistance from the US government.) for $ 100 000... Who would notice?

Which led me to think about the perception of numbers, in distinct when talking about cash. Normally men and women (such as myself!) perceive cash from an person point of view, producing sums like $ 100 000 appear really massive. But, if one particular puts the identical sum into the viewpoint of a group, the exact same quantity of cash is all of a sudden significantly much less (really?!). For instance, 1 300 billion shared by a 300 million population adds up to $ 4 333.33 per individual. That is not so negative is it?

I'm not going to continue on the subject of the US spending budget, it only reminded me of a scenario about a year ago which in turn will lead to the actual subject of this post.

I met a fellow that does not play games, know something about the game market or how you go about producing games. He curiously asked me a bunch of questions concerning these matters and I explained that in basic it takes at least 1 year to create a game, a lot more like two years. I talked a bit about how we worked (from property, with restricted resources, and so on) and what differs us from a "normal game company". He also asked how it normally functions with the development procedure and how you fund it. I explained, in a simplified form, that you have two options: Either you have the cash and you fund the complete improvement process yourself or, you lack the funds and you make a deal with a publisher to fund the development. At the time we had been fairly close to settling a deal with a publisher, so I got the query: How considerably are they paying you to create Amnesia?

I hesitated a bit, it is not something that I typically tell people, so he started guessing some figures -What? $ 25 000? -Nicely, no. it is far more than that... (I replied, thinking about what a excellent answer would be with out providing any numbers) -OK, so it's like $ one hundred 000 then? -Uhm... (I didn't get a possibility to reply) -Effectively, that's not so bad! He stated cheerfully, reflecting more than my previously described "limited sources". To cut items brief, we did not speak much more about it after that as other subjects have been brought up, but this is essentially what this post will be about - How a lot money is $ one hundred 000 when you run a firm, in particular an independent game organization? I would truly like to go over it, since I am not confident how in common people reflect more than these varieties of sums when talking about "Indie games". I have the impression that $ one hundred 000 is deemed to be a lot of income, but I could be wrong. Is it?

As a starting point, I will summarize a couple of things:

-We are funding the improvement of Amnesia on our personal. When the game is released we have been operating on the game for about three (3!) years.

-Initially we had a publisher involved, but we had to terminate that contract and re-believe how to create the project on our personal.

-We are 5 complete-time workers here at Frictional Games and we also have contractors that do varying amounts of work during periods of the development.

-Final year we had a extremely profitable Steam weekend, followed by a effective Linux weekend and a period right after that with greater sales than regular due to the added attention we got from these weekends. It gave us a total of about $ 80 000 in revenue for that month, 20 times as much as we have on typical for the duration of a month.

-To keep it simple, let us assume the $ 80 000 really have been $ one hundred 000.

So how long can Frictional Games go on employing these $ 100 000?
Well, lets take a look at how considerably it expenses to pay ourselves a month-to-month salary of $ 1 500 each. Our salaries are much less than that, they differ a bit also, but as with most items in this post I try to leave the details out of it. We also have to take into account all of the taxes and charges involved. In Sweden we have 30% income tax, but for little amounts such as $ 1500 it is a lot more around 20%. We also have employer costs that are 32%, 16% if the employee is under the age of 26, these charges are added to the original amount. We also have 12% added for getaway salary, and an additional 32%/16% of charge added for that sum. That indicates:

$ 1 500 paid, offers the receiver $ 1200 to place in the pocket.
$ 480 in employer costs.
$ 180 for the getaway salary.
$ 58 for the employer charges on the trip salary.
$ 2 218 total cost for the business to spend an employee $ 1500.

Let us round it down to $ 2 200, that signifies that for all five members of Frictional Games you get a monthly expense of $ 11 000. Generating $ one hundred 000 a sum that would last for nearly precisely 9 months. Which sounds actually excellent! But... of course this did not include contractors or any other expenses (server, insurrance, legal tips and so on). We could eliminate all of the contractors and do every little thing ourselves, but that would only extend the development time and increase the amount of cash needed. We really have to, and want to, work with the contractors that we do as they are excellent at their specialities - saving time and generating excellent content material. As an estimate I would remove about 3 months of pay to cover the rest, which leaves us at a ideal case scenario of 6 months of living time. This too sounds fairly very good, but then once again a salary of $ 1 500 is at least $ 1 000 beneath an entry salary at a Swedish game firm. It is not specifically a salary following the market norm!

Even though 6 months is a great time to final, it is only 1/6 of the time necessary for the complete Amnesia project. It was six months that had been offered to us from all those that created the two sale weekends so fantastic, but it is not achievable to have that kind of achievement all of the time. In distinct when the games you have to sell gets older and older, even if you can often attain new customers it is extremely uncommon to have these higher spikes of revenue.

I hope that this post can give a bit of insight into the needs you have when operating an indie game company and attempting to make it your complete-time job. To show that a sum of $ 100 000, that I consider can be looked upon as a huge sum, may possibly not be so big after all when you are a group of men and women that are sharing it and all the taxes and charges are applied. I would never ever complain about our situation (it is definitely a very good time), but I would not consider it to be a "successful living" just however, we have a bit to go ahead of we can make a appropriate living and not continually obtaining worry about "what occurs next month?".