When we first started working on Dustforce, it was frustrating to not be able to find much data about whether indie game development is a realistic thing to do with your life. The closest thing out there were unofficial sources, like VGChartz, that gathered retail information, but lacked in digital sales data. Fortunately, independent developers don't have the same financial obligations that publishers do. There was a series of helpful articles [parts 1, 2, 3] by David Galindo that talked about the financial details of his game, The Oil Blue. It was just one data point, but a valuable one. Now that we've finished our own first project, we'd like to contribute our own data about Dustforce to the growing trend of transparency in indie game development.

Beginnings

Dustforce started out as the project of the first half of Hitbox Team, Lexie and Woodley. They built the Dustforce prototype during the summer of 2010, motivated by the deadline of a game contest. For four months, they worked in an outdoor shed, living on cheap frozen foods and bulk soft drinks. Lexie worked at a second job during the day, and joined Woodley at night to build their prototype. They finished the game by August, in time for the contest deadline.

 In the few days after the prototype was posted online, anarticle on IndieGames.com drew some positive attention. Woodley and Lexie received an email from Valve, inviting them to put Dustforce onto Steam. This was the motivation they needed to work on Dustforce full time, to turn it from a prototype into a full game. It wouldn't be an easy task – the prototype was far from the final vision, and would take more than just two people to finish the game.

It would take at least a year to do it, and of course it costs money to live during that time. Where would that money come from? Working a second job would cost precious time and energy, and borrowing money from a publisher or investor comes with obligations that can be creatively detrimental to the project. Fortunately, the answer came easily: the Dustforce prototype won the competition, and along with it, a $100,000 grand prize.

The cost of development

$100,000 USD is a significant amount of money, but is it enough? Well, let's look at a detailed list of all the costs critical to developing an indie game:

• Food
• Water
• Shelter
• Internet

All you really need to make a game is a computer and basic living expenses. Time is money, as they say, and we needed roughly a year and a half to finish Dustforce. How much does a year cost? We were all living in different areas of the world at the time (Brisbane, Tokyo, New York, and Cincinnati) – on average, it would cost us around $20k per person per year to live frugally. A lot of the prize money went to paying existing bills, debts, and traveling expenses. Between three people (the fourth lived off his own savings), the remaining money would last about one and a half years. 
This was just enough time to finish the game, but it was cutting it a bit close - you don't want to finish the project with zero dollars in the bank. It can take up to 90 days to receive the first payment from sales, and of course it's possible that the game might not sell well at all, so it would be ideal to leave a few months of money in reserve.

People often ask: how much does it cost to make a game? Well, the answer is straightforward:

Bear in mind that we had no formal business structure, no salaries or benefits. We were just four kids who really wanted to make Dustforce, and were lucky enough to have enough cash to not worry about anything else for a year. Also, it's important to note that money is not sufficient to finish a game – there are intangible resources, like motivation and patience, which are just as consumable as cash.

Expectations and results

A year and a half has passed since development began. It is now January of 2012. How is progress on Dustforce going? A few months prior, we gave ourselves a hard deadline of January 17th. It would be too financially risky to work much longer past that date. In addition, motivation and patience are running low, after fifteen long months of hard work. Now, by some miracle, the game is ready to launch on Steam. With a nervous click of the mouse, we upload the final build and await the launch.

We had no idea what to expect. We could only speculate, using sparse data points and ballpark figures. Was the past year and a half worth it? Of course it was – we worked the hardest any of us have ever worked, and we created something we were truly proud of. Yet, there was a lingering uncertainty of financial expectations. Our goal was to just make enough money to be able to do it again. If we could work on our next project independently and without being restricted by a financial cut-off date, then we'd consider Dustforce a financial success. 
So if it cost us almost $100k to work for a year and a half, we'd have to make around $67k for every year until we release our next game. However, it would be nice to live a less frugal lifestyle than before, so ideally that figure would be around twice as much. With a rough estimate of three years for our next project, plus a bit of a buffer, we were looking at around $300-400k USD as our final goal. Was that realistic? We had no idea.

After a few hours of mashing the refresh button on the sales page, we were able to sleep knowing that sales were doing just fine: on the first day, we sold 4,796 copies - a revenue of $44,141. It was hard to extrapolate this into the long term – obviously we wouldn't be selling this many copies every day, but how long would the initial surge last? After around two months, the trajectory of sales took shape:

As expected, the sales declined steadily after the launch. The first three days of sales accounted for half of our cumulative revenue for the first three months of sales. By the end of the second month, we were selling around 30-50 copies per day. Our running total by then was around $243k. Remember, this is just the revenue. After deducting withholding taxes, Valve's cut, returns and fees, we're left with around 63% of that, so that figure is closer to $153k. With that taken into account, Dustforce was profitable (in that it made over the $100k put into it) by January 25, or 9 days after its launch. If you take into account personal income taxes (between 28-36%), then we were personally profitable by around a month after launch.

By the end of April, sales have tapered off into a trickle of a dozen or two sales a day. However, Dustforce was slated to be on a Steam Midweek Madness promotion, at 50% off for the first 3 days of May. At the same time, we finished porting the game to Mac, and also added in the custom level editor and server. Here's what happened:

Over the 3 days of the promotion, we sold 17,462 copies of the game, more than the amount we sold during the first 3 days of the January launch. Of course, at 50% off, the revenue was a bit less, but it was still an instant 37% boost in lifetime revenue. We were thrilled: it looked like we'd hit our financial goal pretty soon. As a side note, we thought that the huge increase in the player-base would help the long tail with more word-of-mouth sales, but it seemed to taper off back to their original rate within just a few days.

Humble Bundle

Soon after our January launch, we were contacted by the fine folks from the Humble Bundle. They were interested in putting Dustforce on a future bundle, as well as helping us port the game over to Linux. In mid September, the Humble Indie Bundle 6 was released, along with some other great games. Here's what happened:

(Note that for the number of Humble Bundle units sold, we just included the number of copies of Dustforce that were activated on Steam.) The Humble Bundle was a great success: we made roughly $153,915, and unlike the last promotion, we did notice an increase in Steam sales afterwards. With such a huge boost in the number of people playing Dustforce, the amount of daily sales jumped up from under a dozen to around 50 or 60 copies per day.

After the Humble Bundle, we also had three other promotions to end the year on: 50% off during the Thanksgiving sale, a daily deal, and the holiday sale. Although none of them were as dramatic as the previous events, they cumulatively had a big impact, netting $76k in the 45 days between the beginning of the Thanksgiving sale in November, to the end of the Christmas sale in January. This was over three times as much as the revenue in the 45 days prior to that.

Final numbers

The final figure for our income after exactly one year of sales is $489,404 USD (from a total of $668,490 in revenue). Of course, there are also costs to running the business: legal and accounting fees, software licenses, server costs, and some travelling expenses have added up over the past year to take a good $36k or so out of our total income. When you take that into account, along with personal income taxes, we are left with around $295k. In the end, this means that for every $10 copy of Dustforce sold, $4.41 of it ended up in our pockets. We then split this between the four of us.

Dustforce was our first finished game, and we went into it without much experience, especially in the business side of things. Through this project, we learned firsthand that time is money, and that sacrifices have to be made when resources are limited. We were also surprised by how critical promotions were for revenue. We are really grateful to have a strong start, and are very happy with how the game turned out.

We're putting all our earnings back into making our next game, Spire. By being able to remain financially independent, we can continue to develop the game as artists and not as businessmen. Like it was with Dustforce, it is of utmost importance that we make design decisions based solely on making the game better, not on making it sell more.

We are all humbled and elated by how well Dustforce has been received. The joy from our players is enough to keep us making games – the financial success is just an incidental blessing.

http://hitboxteam.com/dustforce-sales-figures

I'd like to see one for World of Goo (PC, WiiWare, etc). I'm pretty sure it sold pretty decently on WiiWare even with a 15 dollar price tag. A few other indie games would be nice to see also. Looks like the humble bundle really helped them out.   I'll read more into this article now considering it is so long.

Well, that shows why everybody wants their games to be part of the Steam Sales, very impressive.

Thanks to them for showing this kind of info and good luck on their next game.

Great thing is, even when the game is years old and falls into obscurity, all that's needed for it to sell like hotcakes again is another sale.
There have been a few like that, like when the first fable came to steam it hit the top of the sales, for a decade old+ game, that's impressive, it's revenue for no effort/work.

on the same topic

http://www.gamasutra.com/view/feature/186940/defenders_quest_by_the_numbers_.php

"So are you guys totally rich now?" 

That's a lot of money up there -- over a quarter of a million dollars in gross revenue -- but let's take a step back. First of all, we don't get to keep all of that,. Each store takes a cut. I can't give net figures this time around, since NDAs forbid me from revealing several platforms' percentage take, but I can say this: our direct sales payment provider FastSpring takes 8 percent, while Kongregate takes 30 percent of all Kreds revenue. Steam, GOG, and the others take undisclosed percentages. (The silver lining is that sales tax, VAT, chargebacks, etc., are all covered by the stores' cuts).

Next, we get to account for expenses! I don't want to get too specific, so I'll just say total expenses were somewhere between $30-40K. And after that's subtracted, the pie gets shared out between the core team members, who have been working on this for about two years.

It works out to a decent living for doing something we love -- a tremendous privilege in and of itself -- but this isn't anywhere close to Minecraft, Limbo, or Super Meat Boy levels of money.

With that out of the way, let's look at where the money came from.

The Rise of GOG

As for the major portals, GOG's star is clearly rising. Even under direct competition, GOG generated 14.5 percent as much revenue as Steam.

If Defender's Quest had not also been available on Steam, I suspect GOG revenue would have been even higher. Steam enjoys a captive market of ardent loyalists, but GOG is swiftly becoming an attractive alternative and gaining loyalists of its own, especially in the anti-DRM crowd.

I should note that GOGers are a passionate bunch. Since our background is in Flash games, we implemented basic gameplay metric tracking without a second thought -- it's just something you do in that world. Shortly after, GOG players started complaining about the game "phoning home." The fans convinced us that it should be removed or at least switched to opt-out, and we put out a quick patch to disable the tracking. Although we stumbled at first, responding promptly to fan feedback turned things around for us and won us a lot of support in that community.

Daily Deal Delivers the Dollars

The Steam Launch was huge. We launched at 33 percent off the final price of $14.99 for the first week, and later participated in the Autumn sale, but the best was yet to come. When Defender's Quest was selected for the Steam Daily Deal, we made nearly half of the game's entire pre-Steam revenue in a single day.

The daily deal spike is actually slightly under-represented, because the 24-hour sales period was spread out over two data points -- the total take being nearly $34,800.

GOG gave us a similar one-day promotion, a "GOG Gem" feature, on January 23, for 60 percent off, which was another nice, single-day treat.

GOG is Great

GOG was overshadowed by Steam, but still a major source of revenue and matched our take from Kongregate Kreds in a fraction of the time. Shortly after launch, GOG embedded the browser demo in the game's news page, driving further sales.

Even better, Steam and GOG continue to have healthy long tails. A year from now we expect Steam and GOG to account for over 75 percent of Defender's Quest's lifetime revenues, especially if we get to participate in future sales.

Desura, Impulse Disappoint

Desura and Impulse barely register on the above charts, and their combined total was under $1000. Had players not been able to buy the game on GOG or Steam instead, I suspect sales on these platforms would have been higher. I know some developers have made good sales with these platforms, so I wouldn't write them off entirely, but our experience wasn't particularly lucrative.

Final Takeaways

Making good games is hard. Selling good games is even harder. So many factors are outside of your control, and even if you do everything right success may still elude you.

I used to believe that if I worked really hard and made something great, an audience would magically find me and we'd make a lot of money. Reality is quite different.

Sales basically comes down to a simple formula:

Eyeballs * Conversion_Rate = Sales

You can't directly control the ebb and flow of the fickle eyeballs of the internet. You can, however, control how many you capture when they show up.

So make your pitch. Tell them what you're about. Give them a free sample. Repeat nice things others have said, and if you're so inclined, tell them if it's okay for their kids. Learn all about what Tadhg Kelly calls the Marketing Story. Be human, be humble, be open, and if fortune is on your side, good things can happen.

And when you're done, come back and share your data with the world! It's scary out there, and the more information we share, the easier it is for the next developers to chart their path.

Lots more in the full article 

http://www.fortressofdoors.com/2013/02/steam-linux-sale-results.html

Shortly after we published our giant sales report, Defender's Quest: By the Number, part 2, the Steam Linux client officially went public and was accompanied by a site-wide sale.

The Linux sale featured every single Linux-compatible game on the service, including Defender's Quest.  In preparation for this article, I asked the good people of Reddit's /r/linux_gaming subreddit what sort of data they'd like to see, and today I'd like to answer both their questions and yours.

One thing to keep in mind is that our game is built on Adobe AIR, which Linux users famously hate with a passion (along with Flash).  Since Adobe dropped support for AIR on Linux after version 2.6.0, Linux users have had to manually install the run-time, which can be a painful and error-prone process. To aid them, we created a special help page with step-by-step instructions, and put a prominent link to it on the front page of our site.

For the Steam build, my wonderful Linux guru Alexander Sturm was able to create an easy-installer script that provides all of the dependent libraries Adobe AIR needs, and then installs it with one simple click when you first launch the game from Steam. This works great on most distributions - especially Ubuntu and Mint, and we're ironing out the kinks with decent success for more obscure distros like ARCH.

So, keep in mind that our Linux sales could have been higher if we weren't bearing the stigma of Adobe AIR. (One of many reasons I'm seriously looking into using Haxe for our next project). 

Since I like to use technologies that makes it easy to target multiple platforms, I don't have to put an enormous amount of effort into "porting" a game to Mac or Linux. It's usually just a matter of changing the export settings on my compiler and doing a little troubleshooting when per-platform bugs crop up. I'd estimate we spent less than $1,000 worth of labor getting our game to run on Linux. All in all, that's a small price to pay for what turns out to be a significant chunk of revenue. 

Maybe Linux gaming will take off, maybe it won't. Maybe the Steambox will be a huge game-changer, and we'll reap the benefits of being a launch title, or maybe not.

Whatever the case, I see three things in the Linux gaming community: a passionate and under-served market, little competition, and plenty of room for growth. That's the perfect place for an indie to be.

also more in the full post