[doug_life]

“In Feb. 2024, Stardew Valley reached 30 million copies sold, and if we assume each copy sold for $15, that means that the game could have generated a revenue of $450 million. A modest 10 percent profit margin puts ConcernedApe’s earnings at $45 million, a number that is likely to increase in the future.” Source: https://dotesports.com/stardew-valley/news/how-much-money-di...

[benoau]

TBH the profit margin on this game is probably closer to 100% than 10%, it was a solo-dev game so never much overhead, I think one guy was hired to work on it.

[tracker1]

30% off the top for most stores (Valve/Steam, Apple/iPhone, Google/Android, etc), then around 50% taxes between state, local... some fixed expenses and overhead. It's probably well under 20% in the bank after all is said and done. That said, it's still a lot of money.

[gamblor956]

The highest marginal combined tax rate in the U.S. is 51.8% (37+10.9+3.9, assuming an NYC address).

However, this is business income, not compensation, so it's taxed on a net basis, not a gross basis (even though it may still be included on his personal income tax return). This means his taxable income is the amount left after taking into account the retailer's fees, subcontractor costs, etc.

So, for example, if he made $100 selling games, $30 would go to the store. Assuming no expenses and overhead (since we have no data to come up with those numbers), the remaining $70 would be subject to tax. Assuming he lived in NYC, he would pay up to $36.26 in combined taxes (not taking into account the SALT deduction or the progressive tax rate calculation), for a post-tax net of at least $33.74. Assuming he lived in WA as other commenters note, he would pay up to $25.9 in federal taxes, for a post-tax net of no less than $44.1. (But note: Washington has an excise tax on businesses which is based on gross income...)

[yunnpp]

God, that's awful. That 30% cut for the middle man hurts. At least the government tax can be put to good use (emphasis on can...)

[LaffertyDev]

Stardew likely qualifies for the reduced store cuts. Steam _lowers_ the percentage for a game when it sells high. Still somewhere between 10 and 25%, though.

Generally, the Steam cut is considered “fair” for Indy devs. The benefits of steam (discoverability, massive audience) generate more sales. My Indy dev friends are not upset about the steam cut at all.

This, however, is one area where eventually Epic Games shines — they take a much lower cut and if they increase in popularity with gamers then steam might be forced to lower their share.

[SXX]

> Still somewhere between 10 and 25%, though.

This is basically almost public information: 25% cut on earnings between $10 million and $50 million.

Yet most likely very big share of sales is well below $10 let alone $15 due to sales and regional pricing.

So yeah I doubt numbers anywhere close to those adverised.

> Generally, the Steam cut is considered “fair” for Indy devs. The benefits of steam (discoverability, massive audience) generate more sales. My Indy dev friends are not upset about the steam cut at all.

Steam no longer provide any discoverability on its own unless you either bring your own community ftom outside or spend $10,000-100,000 on marketing to gain wishlists.

If you're small 2-10 people indie gamedev studio and have external funding Valve will earn more from your game than you.

[MajorBee]

In this case, as a solo dev, it's probably quite justified to be honest. I doubt ConcernedApe would have really been able to continue solo-ing it with this level of success if he also had to maintain distribution channels, sales/returns, marketing, legal stuff on a global scale.

It's probably the big name studios who already have entire departments to do that kind of stuff that feel they're being ripped off.

[benoau]

Actually the more you earn the worse the deal is - he's probably paid about $100 million for what amounts to $100,000s of labor if he paid people to take care of this stuff, and some (low) millions in taxes collected for various jurisdictions. Dude's personally bought Gabe a ship in exchange for some accounting.

[tempest_]

Gabe gotta buy a $500 million dollar yacht.

It pays to be the middle man!

[benoau]

The yacht and the company that makes it. Plus like 10 other ships. His fleet probably employs more people than Steam lmao.

[yunnpp]

And the DJ, I suppose. Somebody's gonna have to keep that rave going.

[tick_tock_tick]

I mean the company taking the 30% cut also pays taxes on that so more then you'd guess are going to taxes.

[mostlysimilar]

> around 50% taxes between state, local.

Truly? I believe he lives in Washington State. It's really HALF of his income?

[tracker1]

When you're talking millions in income it can be that high depending on your state... IIRC, as peer comment mentions, Washington doesn't have state taxes, you still have a nominal rate for Federal at 38% though, and I'm not sure about sales, property or other taxes, which again, likely approach or exceed 50% against total income.

Just checked, seems it's now 37% for the top federal bracket... for what it's worth, I think it's amoral to tax more than half of what someone makes, regardless of how much they make.

[techgnosis]

Washington state does not have a state income tax, FYI.

[kevinh]

Valve's 30% cut would lower it substantially. Taxes might put it beneath 50%.

[3eb7988a1663]

The game has also been on sale numerous times for less than $15. It is currently available on Steam for $9

[kiba]

He also put an insane amount of effort, far more than most of us mortals.

[cheschire]

See: Blood, Sweat and Pixels; Chapter 2

https://a.co/d/4OIUtsN

[MegaDeKay]

Came here to recommend this book. It is fantastic. There are nine other games covered besides Stardew Valley. Some are great, some not so great, but the stories behind each one are excellent.

[ehnto]

All the game markets take huge cuts. Steam is 30% if I recall correctly.

[chamomeal]

Damn I didn’t realize. 30% is pretty hefty

[margalabargala]

The service Steam provides to game developers is substantial.

[benoau]

Not really, what they actually do for most games is basically what Google and Apple do: a token review, then nothing apart from some niceties for players. Then they pocket an immense profit, it came out in one of Epic's cases that Valve net $50 million/year profit per employee.

The only thing for developers they still do better than Google and Apple really is a few promotions throughout the year that target specific genres for released games developers can register for (whereas Google and Apple select the games they promote), and the "Next Fest" 3x a year for unreleased games.

They used to do stuff like "visibility rounds" that would reach 100,000s of people who didn't know about your game - the same feature today targets people who already wishlisted your game, so these days most developers have to put significant effort and money into promoting their Steam page on other channels like tiktok/youtube/reddit.

[margalabargala]

Well, plus there's the whole version management and packaging and hosting and distributing giant amounts of data.

If you are an indie team that makes a 50GB game and has 50k players, distributing and update management would be a gargantuan task without Steam or something like it. 2.5 petabytes of bandwidth isn't cheap.

Yes what they do is profitable, I'm not saying that it isn't. But paying for what they do is (clearly) still more attractive to developers than rolling their own infrastructure to do the same.

[skibidithink]

What Steam brings is a firehose of gamers with their credit cards ready to all the games they think will be successful.

There's a reason why everyone launches on Steam.

[jasonjmcghee]

Well he made a 10% deal with a publisher iirc and steam gets 30% - so that's a chunk right there

[foxrider]

Steam takes 30%, other stores take 10-20%

[geon]

Presumably he spent years working on it. His own time should be subtracted from the revenue too.

[benoau]

Hundreds of millions minus hundreds of thousands of dollars lol.

[keyringlight]

And the decision to risk years of his life spent on a project that might not pan out. IIRC he was largely supported by his girlfriend during development and he worked in a cinema. That's in contrast to a job at a studio where you get a salary for your time whether it succeeds or not.

[pwdisswordfishy]

Why would 1 unit of this game have a "profit margin" of 10%? It's a video game. He's not selling canned goods.

[edent]

Of the purchase price that the end-user pays, the retailer has to pay tax. That knocks off a variable percentage. It would be 20% in the UK.

There's also the cost of selling through Steam / Google Play / Whatever - typically 30%.

I assume the developer has some professional expenses - an accountant at a minimum, probably a lawyer, certainly insurance. Maybe they also have a PR team, advertising, and the like. I don't know whether they pay for testers, translators, and things like that.

Then we get on to things like buying a new development machine, going to tech conferences, taking an educational course, backups, and all the other things that a business needs to spend on in order to be effective.

Maybe a profit margin of 10% is unrealistically low - but developing software has legitimate costs. The margin is never going to be 100%.

[philistine]

What do you think the profit margin of canned goods is? They make cents on every can. Something like 2-3%.

The video games industry is filled to the brim with gatekeepers who take their cuts. Valve takes 30%, just for their store. Publishers start at 10%. Your engine might take a cut.

Estimating that Stardew Valley, the big success video game with the lowest overhead bar none, has made 10% profit might be too low. 20%? Might be high.

[HDThoreaun]

He used this open source engine, it is free. He is almost certainly getting between 60-70% of revenue after distribution fees. His only other expenses are taxes and the other devs he employs and he was solo until the game made like $100 million. Most of the copies sold for $15 so it seems fair to me to say his companies lifetime revenue is close to $10*number of units sold which is close to half a billion dollars. And since the companies expenses are effectively zero profit is the same. If he’s smart with taxes he’s paid 15% corporate tax rate then 15% capital gains rate which comes out to just under 28% so his own lifetime earnings is probably around $360 million.

[mywittyname]

> What do you think the profit margin of canned goods is?

For whom? The manufacture? It's closer to 10-30% for the manufacture (lower for white label goods, higher for "premium" brands). And it's higher for products that enjoy monopoly status.

For retailers, it's 2-3%, but retailers also get products on loan and negotiate various agreements that help cover the costs of displays, shipping, marketing, and wastage. So even that small percentage margin is skewed a bit.

There's a reason that retailers and food manufactures ("canned goods") were some of the largest American companies prior to technology taking off. It's a highly profitable industry.

[pwdisswordfishy]

> What do you think the profit margin of canned goods is?

Um, exactly the sort of numbers that you're providing. I'm baffled by the question or what possible relevance you thought it had here.

> 10% profit might be too low. 20%? Might be high.

You think an indie game like the one in question is making less on each copy sold than Valve is making on it? That's nuts. If the creator isn't clearing 50% on each marginal unit sold, then something is seriously wrong.

[PurpleRamen]

Besides tax and the store's cut, the games also regularly sales and prices-changes. So you can't just extrapolate the price today with the amount of units sold and assume this to be the revenue.

[pwdisswordfishy]

> you can't just extrapolate the price today with the amount of units sold and assume this to be the revenue

Who did that?

This thread seems to be filled with people who don't understand what marginal cost is.

[SXX]

There are regional pricing and sales. Good chunk of those 30 millions sold way below US price. He certainly earned what you say though.