How can an indie developer determine a game’s budget?

Every year, game sales grow, big development studios increase the budget of their projects to impress players and beat the competition.

Games are gradually becoming the norm of leisure activities and the pandemic has accelerated the growth of this trend. Through globalization of digital game stores and monopolization of games market by big developers, a few dozen game studios have released almost every game that you’ve heard about and played. Subconsciously, we entrust the choosing of a new game to familiar brands and past gaming experience.

Exactly, those reasons allow Rockstar to put over 300 000 000$ in the development of their projects. Loyal player fan base would want to buy a new GTA game, rather than some other new products.

This bar of development budgets is unlikely to be available to indie developers, and, in order to recoup the development costs for your game, you need to start small. Before starting to form a budget, you need to know the volume of potential audience and money that you can get from the future development.

After analyzing existing games and determining the commercial potential of your future game, you’ll need to calculate the allowable budget for your future product.

At this point in time, you have to decide what’s more important for you: to make profits from this game or to remotely form a loyal player fan base?

Releasing a game is not just about development, but also marketing, investing at least as much money as in the development.

It’s important to realize that, in all cases, the game’s development will go wrong and you need to be ready to double the maximum budget (in case it’s your first project, the multiplier might even be 10).

Let’s assume, you think that your future game will make 100 000$ and you’d like to make 20% from the development. For ease of understanding, let’s not take taxes into account.

In this case, the game’s final budget + marketing would be 80 000$, where 40 000$ are dedicated for promotion. The conclusion: overall development should cost 20 000$, because you’ll have to invest no less in the later stages of the development.

Exclusively for new developers, on GameSensor platform, we show the actual amount of income that will go to a developer’s account, from which you would pay taxes. Basically, on average, 40% of the game’s revenue is spent on VAT + Steam’s cut. You need to take this into account while looking at competitors’ statistics.

GameSensor Man

There is an opinion on the market that the development cost of a “normal game” starts from 1 000 000$, and for a released “simplified indie game” it’s 300 000$.

It’s possible to develop a game for that money only with maximum engagement in the project and with a strategy of saving money on everything.

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