In a piece on pitching, Xsolla’s Justin Berenbaum highlights a number of budgeting considerations that indie devs should bear in mind when pitching their game to a publisher.
According to Xsolla, around 70 percent of games on Steam are made on under $100,000.
Image Credit: Xsolla
However, it’s important to note that not a lot of publisher would consider investing less than $100,000. The reason for that is that “they don’t see much return on investment with these smaller projects and the overhead “internal costs” end up being a large part of the total value of the deal.”
Typically, indie devs should consider requesting anywhere between $100,000 and $3 million. When figuring out your funding goal, it’s important not to forget about hidden costs that could add as much as 10%-20% to your proposed budget. For example, you are requesting a $500,000 budget. If you haven’t already included QA, localization, ratings, submissions to first-parties, and external markeing, this could mean the publisher would have to invest another $100,000 to cover these expenses. This brings your indie budget to $600,000 or even $700,000 if you are assigned the following personnel:
- Brand/Marketing
- PR/Social Media Specialist
- Producer
- QA Manager
So if you are requesting a $500,000 budget, the publisher or investor might actually have to pay between $600,000 and $700,000 to make your game. It’s also important to remember that QA, localization, ratings, and submissions costs, as well as external marketing costs are generally deducted before any royalties are paid. As for the assigned personnel costs, Berenbaum warns not to let the publisher make these costs recoupable.