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Two Steam games generated $560,000 across 135,000 sales, but the co-creator only took home $15,000 annually
Just like that raccoon washing his cotton candy and watching it melt.
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When it comes to the gaming industry, the billions bandied about regarding AAA titles often lead many to think that if your game scores a hit, you're essentially set for life. Unfortunately, the sad reality is that indie developers often have to end up pinching pennies or outright in a deficit despite strong sales. Omer Develioğlu, the co-founder of Northend Games, offered a candid breakdown of how $560,000 in income over five years for sales of his games ended up as just $134,000 split two ways, with $73,000 in his and the co-founder's pockets. In the end, the co-creator got only $15,000 per year and continues to drive his 2012 Mazda, hardly the riches one would expect.
The $560,000 gross figure refers to sales for two titles: Northend Tower Defense and Deepstone Rift (Early Access), both sold on Steam, for a grand total of 135,000 units. In an accompanying video, Develioğlu mentions that an impressive 53.3% of sales come directly from China.
Unfortunately, he also says that the country's customers are very demanding, and that the refund rate there is disproportionately large. Thus, $134,000 goes right away towards said refunds, with a rate of 22%, "way above" the purported standard of 10-15%. For what it's worth, the Chinese refund rate is corroborated by both older and recent third-party figures. Current tally: $426,000.
Then there's Steam itself. The platform is widely beloved by gamers everywhere for its value-add features like the Workshop, but also for the basic notion of not making the other platforms' questionable business decisions. Having said that, Gabe Newell's enterprise has also been on the receiving end of criticism thanks to fees starting at 30%, which only go down for amounts over $10 million and beyond. As Develioğlu's games are nowhere near those figures, 30% it is: $127,000 for Steam, and $297,000 for the devs... or so you'd think.
Next up, there's the U.S. withholding taxes. The developer lived in Iraq and moved to Thailand, a country that has a tax agreement with the U.S. to prevent double taxation. Even still, Uncle Sam's slice is 5%, bringing the total down to $287,300.
Now, it's time for one of the more controversial aspects: the publisher's cut. According to Develioğlu, his Asian publisher took care of PR, distribution, and marketing in the China, Japan, and South Korea regions. The fact that the majority of the game's sales came from China could mean the publisher did a good job, but the cut was hefty: $115,000, seemingly in a sliding scale, leaving take-home at $172,000.... before local taxes.
Develioğlu doesn't clear up what the publisher's cut, perhaps due to an NDA. The most logical option is that the $115,000 fee refers to the sales in Asian countries. Given that 53.3% of sales are in China, and that the publisher also handled Japan and Korea, this would mean a percentage cut of around 35-40% of net income.
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