Most games on Steam will make less than minimum wage

Games
21

I think this is actually the biggest factor. People are just not willing to pay what it takes to make games. If you’re an indie, it’s even worse - it’s automatically assumed you’re going to sell your game for dirt cheap just because of that label with no regard for the actual content being provided. And that’s one reason most publishers and some developers are looking for the next psychological exploit to get people to open their wallets. (Games industry isn’t the only one with this problem)

Steam’s discovery system is atrocious and could trivially be improved if they actually cared at all, and they really should do some basic effort to get rid of copy/paste asset flip clones (for reasons of public opinion if not for the benefit of real developers), but the reality for most of the developers complaining about the games count is that if Steam were more curated they just wouldn’t be on it at all. They all think the games that would get removed due to curation will be everyone else’s.

22

$30,000 isn’t a living wage in large parts of the US. It’s also pretty poor ROI on the skills required to make games. I make about $15k more than that and my position doesn’t require a degree or any sort of specialized knowledge. An entry level programming position at a lot of the major developers starts around $50k, and game programmers (as employees) make less doing that than they would almost any other kind of programming. (Of course, I couldn’t find a programming job to make use of my degree because they all wanted six years of experience I super didn’t have fresh out of college, but I assume it must be possible somehow.) But yes, it does make a lot more sense in areas with much lower cost of living.

I really believe this is strongly influenced by the volume of games entering the market also. If there’s one game being made for my preferred genre in a year, you better believe I will pay full asking price and then I will play the shit out of that game until I cannot possibly extract more value. But if there are 30 (and unless you’re into some seriously niche shit, at this point there’s probably at least that many) then I can afford to wait for a deal. In fact, it probably wouldn’t make sense for me to ever pay full price, because the backlog is eternal.

Anyway, that’s where I find myself, and of course I like a lot more than just one sort of game.

23

30,000$ is the average salary in countries like Malaysia or Indonesia, and it is an awesome salary in countries like Vietnam. Thailand used to be a hot spot as well, but they’re realling catching up

In the Apple and Android app store, many if not most development outfits are organised pretty much as transnationals are. The project management lives and works in the US, Australia, UK etc. and the developers are based in countries like Malaysia, Vietnam, Indonesia or Thailand.

All of these countries have tertiary education institutions which have been growing from strength to strength over the last decade. They also send overseas tens of thousands of international students which eventually come back to their countries to either work or teach to others.

A $30,000 income in a place like Penang is pretty good income. But that will not last.

The logical conclusion is that eventually supply will dry out entirely. And it will not start again until the unavoidable technological obsolescence kills that backlog or makes it very hard to enjoy. Compared to music in vinyl or even a CD, video games are extremely fragile to switches in hardware and software.

24

Even in a country where $30k is well beyond livable most indie games are not made with 1 dev. So for 2 devs that’s cut in half to $15k in a year, 3 devs $10k in a year. That’s not counting any contractual work needed for the game to release, such as audio, music, any additional art you don’t have time for, etc… It’s a lot less appealing as things start adding up (even in a low living wage country).

25

Oh, I know. It’s easy to find out how life is in the US when so many of you are on the internet and things are fairly homogeneous - even then, there’s huge differences between the Valley and Austin, say.
It was more a way of introducing the notion that some of those who don’t make a lot of sales might be fine with it. To figure out properly, there’s all kind of taxes and living costs to add up, though.
OTOH, being on the bottom end of the euroland of endless austerity, there’s no way in hell I’m paying $60 for a game.

That doesn’t really happen if you’re comfortable with computers, emulators or Wine run pretty much every popular older game, and many more besides.

It depends on your costs, as that number is not profit. Some games have one programmer with minor contracted art, and are still a unique piece of work worthy of being on Steam. Stellar Monarch seems to have sold about 6122 copies at around 19$, I’d think the Polish dev would be ok with with that.

I’m going to bow out on discussing how much games should cost, though, I’m on a different (purchasing power) reality from most of you.

26

Thanks for the encouragement! I’ve been working on a game part-time for over a year, and I don’t intend to quit. I just look at how long the road is on this thing and think about how much quicker things would go if I switched to doing it full-time.

27

Good luck! Yeah, making the leap is a big deal. If you have the luxury of working part time on something while having your savings go up insteda of down thats a great path!

28

Steam can have the best discovery system in the world but I only have so many hours in the day and my gaming time seems to decrease every year.

I know there are younger gamers coming in but I’m not sure they are dilettantes sampling wide and broadly.

30

Funny thing that Master of Orion 1 and 2 have been quite playable with Dosbox since like forever, and since

https://www.kickstarter.com/projects/1319847883/stardrive-a-4x-action-strategy-game-for-the-pc

We have been pretty much overcome with self-appointed “successors” or “remakes” of both.

31

This is just basic supply and demand, as well as the massive backlog most Steam folks have.

Good games are so common these days that you need to be great to even be worth buying unless you’re in a really niche category.

32

I don’t think talking about the ‘average’ revenue is meaningful in a distribution as unequal as this is likely to be. A small proportion of these games are making a whole lot of money, while the rest are probably making very little (many of which deserve to, have you browsed the steam new releases lately?).

Give me the median and at least the average among games that pass some kind of weak filter for quality!

33

Why Steam needs to do that?

There are already gaming sites, and forums, and youtubers, and mentors, and etc etc.

34

If you click on the link, it actually gives you medians.
Around this time period in 2017, the median game on Steam, in the first month on sale, at a median price of $7 (mean: $8.30)
• Sold 500 copies (mean: 3700)
• Made $2000 in revenue (mean: $18000)
As of January 2018, the median game on Steam, in the first month on sale, at a median price of $5 (mean: $6)
• Sold 100 copies (mean: 600)
• Made $280 in revenue (mean: $2500)

When he applies a ‘quality’ filter (not clearly explained), the median non-shovelware game on Steam in the first month on sale, at a median price of $10 (mean: $12):
• Sells 1000 copies (mean: 4500)
• Makes $10000 in revenue (mean: $27000)

35

Hey thanks, for some reason I missed the link in the Qt3 post!

Edit: After reading it, I was disappointed to see that all of this discussion is based on this guy’s ‘educated guess’, using a methodology in which he shared no details. Unless someone has a link or something where he goes into more detail of how he used public data to estimate these numbers, I don’t really see the point in thinking about them.

36

On the other hand, I do have a lot of free time and I have gone to replaying old games because I just do not see any new games that interest me. There could be 1000 awesome games on Steam, but I have no real way of finding out about them.

My wish list is full of EA titles. I do not want to buy them until they are done. Many of these games have been in EA for years and years. I think EA is probably a bad thing.

On comment I have about this $30k statistic, is that it does include all games. There is tuns of crap on steam, and even more games which are almost indistinguishable from each other (beyond the look). Take the survival genre. There are tuns of these (almost all in EA), and the videos of them almost always feature you attacking a tree for wood in which you use to craft weapons and tools. It is like, I have played the hell out of modded minecraft, and now you are making a game which looks better than modded minecraft, but has like 2% of the playability of modded minecraft. Why would I spend any money on these games?

All those clone games are part of that $30k statistic. I would think that actually good games do a fair bit better than that.

37

Not on Steam @Tim_N, but such detailed analysis can be found for the Apple App Store. Which operates in many ways like Steam (shovelware, freemium, aggressive downward pressures on price points).

It also generates the same incentives for the company running it (Valve takes a fixed % from every sale). In principle, both developers and Valve want volume to be high, but obviously, Valve has like 100,000 horses running on the race, while non-shovelware developers maybe have one or two.

Also, Valve (or anybody wanting to put the cash on the table to buy them out) can pretty much set the TOS as they see fit.

So pretty much everything that has been written about the economics of the Apple App store will be informative to a great degree in order to parse the present and the future of on-line game distribution. A collection of links I have collected over the years, and I have used to inform several career choices, with commentary, follow.

http://communities-dominate.blogs.com/brands/2010/06/full-analysis-of-iphone-economics-its-bad-news-and-then-it-gets-worse.html

That is a June 2010 article with some hard data… this particular bit I find sobering and resonates well with the theme of the article

The purpose of this blog article is to examine the economics - and hopefully help guide potential developers and investors - into seeing where is the real opportunity (if any) and where are the dangerous pitfalls. If it is, as I have been claiming now for many months, that the App Store hysteria is developing into a tech bubble, and that most developers will never recover their costs, then the sooner you the reader can understand this, the sooner you can make the needed moves to minize your losses (or to avoid future and futile attempts to enter this area). I am confident in the long run there will be a vibrant and reasonable-sized market opportunity. but today all numbers scream the opposite. The math simply does not add up.

and

The development of the typical app cost $35,000 and the median paid app earns $682 dollars per year after Apple took its cut. You see where this is going… We get to break even on our App Development costs in… 51 years. I’d say the iPhone battery will need replacing before then, and perhaps our grand kids have grown tired with that oldfashioned antique toy by then. But maybe - just maybe - without any updates to our app, we can sustain 51 years of continuous sales and recover our initial investment. Yeah, and this is obviously without covering any of our marketing costs, and gives us no profit yet, etc… Just to break even.

If you take that absolute lowest end of the two estimates, $15,000 and do our app ‘dirt cheap’ - even then, it will take 22 years to recover our costs. 22 years? I bet AT&T’s 3G cellular license doesn’t run all the way to 2032 haha. And again, HALF of all developers of paid apps will do worse than this! Can you understand why I preach to the industry, yes, there is money in mobile but for heaven’s sake, please do not invest your precious creativity on any smartphone apps today. Its utterly a fool’s errand.

TL;DR Do some math, avoid getting trounced.

A fancy name, and fancy graphs but less fun to read. Written in July 2012.

And that’s the Sparrow problem, break-even was not sustainable. They had to find a way to turn a profit — lots of profit — to provide their investors a decent return.

that also and this

The downward spiral in app prices caused by the Top 100 list and Apple’s relatively hands off approach during the first year of the App Store has created completely unrealistic pricing expectations that may haunt the entire mobile software industry for years to come.

In hindsight, I think “haunt” was the wrong word to use. Though it wouldn’t fit quite as well semantically, or be quite as provocative, I think the right word to use there is “change”.

And this one, written in July 2015. This article has a slightly different vibe from the previous two, as it is hypothesizing the existence of a middle class of app developers which can make reasonable income (before factoring development costs). In general, I find the economics of this last article less sound than that of the two discussions above - the author is a Content Marketing Strategist - so I assume she will be astroturfing a field of turds like I put butter on toast. You don’t want to tell your prospective consulting clients that the chances are they will be shafted and the advice, while informative and expensive, won’t help them much.

Some interesting snippets

The research confirms the rapid advance of a “long tail” of app developers and companies, a new segment of developers proving that many of these apps benefit over time from tapping specific audiences and consumer tastes that run outside the mainstream (like the types of niche audiences that might like indie music or genre-specific games).

Which all sounds great – until you try to actually find one of these niche apps in one of the popular app stores. For smaller app developers, understanding the nuances of discovery and user acquisition is still critical.

I would really like to see what the metrics are for search based “discovery” on Steam

Recent Google research reveals that one in four app users discover apps through search. And The State of App Discovery 2015 — a new study released by attribution analytics company TUNE, drawing from an online poll of 2,100 smartphone users in the U.S. — reports app store search accounts for more than 67% of actual app discovery.

compared with other means (like the New & Trending, Top Sellers, etc.) sections, or the discovery queue.

And, even if app developers and companies invest in paid promotion campaigns to achieve the massive volume of downloads needed to rocket an app to the top of the charts, fame can be fleeting. (The numbers are murky, but mobile app marketing company TradeMob did a little investigating. It found that the magic number for getting into the top 15 in the U.S. App Store was 60,000 downloads over a 24-hour period.)

I’m pretty sure that a “Steam magic number” also exists.

38

While I do think mobile app stores share many of the same issues, there are important differences: for example, there is a very low price ceiling for mobile apps beyond which most people are not willing to pay, hence the prevalence of freemium apps. (Free to play has certainly been a force on PC but not to nearly the same degree.) People tend to be discount-hungry on Steam but generally aren’t expecting everything to be under $3 or whatever. Also, Apple has made sweeping OS-level changes that have obsoleted older apps without significant reinvestment in a way that Microsoft tries very hard not to. Etc.

39

People get too worked over this. STEAM has turned into another APP store with tons or rehashes, copies and allot of garbage stuff. Yea there’s good stuff that’s gets overlooked but you flood a market with all this then what do you expect.

40

Just out of curiosity, what is minimum wage in the USA, and does it vary by state?

Also I recollect waiters etc earning far less than minimum wage and this being justified by then getting tips, a system I never agreed with (along with adding taxes onto the food bill instead of displaying the full price from the beginning, but anyway… )

I ask because my feeling is that if I start to sell a product, as opposed to selling my time and skills to someone else, then the metric of minimum wage seems no longer very applicable.

It seems a better metric would be accounting for how much game x cost to make and then measuring the return on that.

This is in no way meant to detract from the issue of overworked developers and a flooded digital marketplace.

41

States can set a minimum wage, but it cannot be lower than the federal minimum which is $7.25 an hour.

The point of saying a typical game on Steam won’t even net that federal minimum is to illustrate that most indie titles won’t make enough to pay the wages for one worker.