The development of a small game by an independent team, even if the issue of financing is partially resolved, can turn into a serious test. The authors of Shovel Knight from Yacht Club Games passed it with honor, which they told about the other day on the pages of their own blog. With their kind permission, we publish the full version of the post-mortem in Russian (yes, we are aware that the game was released only for PC and 3DS, but we really liked the text).
Shovel Knight has been on sale in the US in the Wii U/3DS version and worldwide in the Steam version (in English only) for more than a month. Watching our little fledgling Kickstarter chick grow in a wild market is insanely exciting.
Anyway, it doesn’t matter whether you believe it or not, but in addition to the desire to make a great game, another reason why the team wanted to break their comfort, leaving behind work in the office, and enter the lands of independent development, was the desire to make the development process more understandable and transparent to the general public, so that you everyone has a concrete idea of how games are created and how to measure their success.
So this is our task for today!
Unfortunately, most developers are not allowed, or they themselves do not want to share their financial expectations or sales results. Fortunately, we are not like that. And we really hope that we will be able to add a couple of straws to the pile of existing information to help other developers, journalists, enthusiasts in the future.
In addition, we consider all of you to be the reason for the existence of this game, and therefore it is our duty to tell you about each gear of our mechanism.
Okay, let’s go!
We are going to go through the whole process, starting with Kickstarter and before the release, we will share our sales and some statistics of the project from June 26 to July 26.
It all started with Kickstarter
To understand what our sales mean, you need to know what numbers it all started with.
On April 13, 2013, our Kickstarter campaign, sponsored by 15,749 people, ended. In total, they allocated $311,501. We also collected money in parallel using PayPal. With his help, 935 people helped us with an amount of $17,180. After the end of the campaigns, we asked all our sponsors on which platform they want to receive our game, and here are the results!
Unexpectedly for us, the owners of Nintendo devices were responsible for only a third of the amount. We expected that there would be a lot more of them, given that we focused (at least implicitly) our campaign on the Nintendo platform. Were the skeptics right in claiming that games from independent developers don’t sell very well on this platform? We will return to this issue later when we consider sales, but it seems to us that it is safe to say that at that time Kickstarter was a platform dominated by the PC platform.
So, in total, when we started creating Shovel Knight, we had $328,682 on hand for the entire development (remember that this amount is excluding taxes, handouts, rewards and the amounts of those who canceled the payment). This is, of course, a huge amount in itself, but certainly not if we are talking about the development of the game.
This may sound unexpected, but even a small downloadable game can cost millions of dollars.
We planned to create a game that would take a team of five people working full-time five days a week (six if you count composer Jake) for two years (this schedule takes into account a year for the game itself, another year for the promised additional content). To develop this kind of game for $ 328 thousand was unrealistic, and that’s why.
Development cost
How much does the game usually cost? How can it be calculated at all?
Well, to be honest, it’s difficult, but according to the most standard method, it is determined by counting how many people are in the team and multiplied by the time the game is in development. This assessment is not very accurate, because in the gaming industry we criminally underestimate the time spent on each component of the game. As a rule, we compensate for this with a small revaluation of time/salary/ number of “buns”.
So let’s do it for Shovel Knight!
Nowadays, most studios estimate the average cost of one game developer at $10,000 per month. What does it mean?
Essentially, each developer will cost the company $10,000 per month and $120,000 per year. Now, of course, not every developer in the team makes such money and, as a rule, NONE of the developers in the team earns such amounts.
This is because this monthly $10,000 goes far beyond the salary of employees. They cover all expenses related to the maintenance of an employee in the office. This includes not only individual expenses for a particular employee, such as salaries, medical insurance, and so on, but also the expenses of the company itself for its maintenance, such as rent, electricity, water, food/snacks, accounting, computers and other equipment, software licenses, deductions to lawyers, taxes, software development costs for product development… the list can go on for a long time. Having covered all this, we can calculate the cost of developing the entire game. Also keep in mind that some developers may only work on a project for a few months, while others will work on it throughout the entire development period. The total number of human months for the development of the project can vary greatly from the game, but we calculated that the development of Shovel Knight will take about 144 man months to complete.
Now YOU have the opportunity to evaluate game budgets! Just multiply!
For example, a team of 50 people has been working on a project for two years? This project will pull in 12,000,000! Twelve million dollars! You can see how game budgets have started to gain weight!
If you bend the numbers in your head, you may think: dude, you told us what you were going to do and release Shovel Knight, and it will take you two years to achieve all the tasks. Six people in the team who made Shovel Knight. According to the standard rules that we just learned, for the development of Shovel Knight in two years, as we planned, we would have needed $1,440,000, which, of course, we did not have.
What have we done to reduce costs?
First, we have deleted the composer’s salary from our calculations. He was generous enough to accept payment after the release, and very hardworking, providing most of the sounds and music in a very short period of time. This reduced the calculations to $1,200,000, which, of course, did not help much.
Then we decided that, yes, it would take two years to make the game, including all the tasks set, but we, in theory, could reduce it to a year if we released the features promised to users after the main release as free updates, using the money from the sales of the game to finance them.
So we halved the budget, taking away a year, and got a budget of $ 600 thousand. We got closer to the goal.
But unfortunately, the options ended there. The only remaining solution is to halve employee costs. We continued with the expectation that $5,000 per person per month would be spent, which was very little. At first it sounded like $60 thousand a year, but considering the company’s costs, taxes, in reality, each had $30 thousand a year… and it’s tax-free.
So figure it out: $30 thousand a year minus taxes, grueling work (12-18 hours a day, 7 days a week), no stability, why? After all, we are making an NES game that is unlikely to sell well. The 80s are over, man, get it over with! Cool kids are all AAA action games that you’ll never develop!
Why
Not such a bad question, to be honest.
But let’s add to the calculations the fact that we knew what we were signing up for. We understood that taking on the development of such a game is something more than, sorry for the tautology, just development.
Why?
Because we understood that we ourselves would be responsible for running the business, marketing, publishing, merchandising, support and so on of our game, that we would devote all the time that is not occupied by sleep to the game. We knew that we would finish Shovel Knight, hardly saving ourselves, that we would forget what the sun looks like from our windowless office. It will be exhausting and terrible. And there will be no support.
But we wanted to make this game, and we believed in it. She was our passion!
And not only that, we met so many great people during our Kickstarter campaign who also believed in it! The world needed Shovel Knight, we needed to develop it, and we didn’t really care that we were sacrificing ourselves for it. We also wanted to control every part of the game, from marketing to development, and didn’t want to give up any responsibilities.
We also knew that Shovel Knight would be successful. We had no doubts, because we had years of budgeting and game development (and sacrificing ourselves) behind us, and we had concrete figures to rely on. That’s why we felt confident planning so far ahead and saying that we would present some of the content as free updates in the future.
What specific figures are we talking about?
We are talking about 15,684 people who supported us on Kickstarter. Other developers have calculated that pre-orders reflect the sales of the first week, taking into account their increase by 200-400%. This means that Shovel Knight would be guaranteed to be sold only in the first week with a circulation that is 2-4 times more than 15,684. In other words, 30-60 thousand copies in just 7 days. This, of course, looked crazy for us, since successful games from our portfolio barely overcame the mark of 50 thousand copies sold. Therefore, we felt a certain level of security at that time.
We felt confident, but we were late with the release. We failed to prepare the game for the originally announced date – March 31. In addition, the budget was spent (as early as March 1).
And when this happened, we stopped all payments that were not critical for the game and obligations to Kickstarter. Electricity? Necessary. The Internet? Also needed. Envelopes for letters? Ordering. Food? Well…
By the time the game was released, we had been sitting without a salary for several months. It was a difficult period, the credit cards of some of us were canceled, we had to borrow money from friends and relatives.
First month of sales
After all, we released the game on June 26th!
How did the game sell? Let’s get right to it.
In the first week we sold 75 thousand copies! Absolutely crazy figure. It turned out to be 2-4 times more than our expectations!
We believe that our forecasts regarding sales were underestimated due to the fact that it was not entirely correct to proceed from the experience of pre-orders.
In the end, predictions based on pre-orders are not the last word in sales statistics, but rather a kind of guideline for what can be expected.
In addition, we have done a lot in terms of promoting and marketing the project at conventions and websites in order to prove to ourselves that the course for the year was chosen correctly, and it seems to us that people responded to it. Nintendo has also done a wonderful job supporting us by hosting the game in their store.
Our expectations were exceeded not only by sales, but also by where we will appear in the tops.
Despite the fact that we have done everything in our power to popularize the game, this could not happen without the enthusiasm of the players. Every positive review, video walkthrough, stream, tweet, amateur drawing, recommendation, critical review, letter, voice and review – made it possible! And as you can see just above, Shovel Knight took first place in the top sales on 3DS, 2nd place on Wii U and we were also (although we can’t find a screen proving it now) in the Top 10 games on Steam. Yes, did we mention that we turned out to be complete fools, going against Valve’s advice by launching Shovel Knight during the Summer Sale, when our competitors were big hits sold at huge discounts? Yes, we’re nuts, but we still broke into the Top 10. We don’t know the guys… SteamWorld Dig, of course, sounds much more attractive for two bucks than our game. Also, when we were in second place in the Wii U digital store, we competed with a whole bunch of games that were distributed for free as an advertisement for Mario Kart 8. Of course, it was unrealistic to throw off the first place a game that sold more than 2 million copies, each of which offered to choose any game for free on the eShop. So we were quite proud of the fact that we came close to Wind Waker.
So it was a great first week, but of course, sales dropped quickly after the launch. So where are we after a month of sales? The total data for July 26 is slightly lower.
Overall, we are very happy with the sales! We don’t have any information about the sales of other digital games to make any comparison, but our sales have shown a very good side, if we talk about our company, in the sense of the six of us. This means that we can stick to our course and create the promised additional content without fear of disbanding and finding additional funding. And we still have a lot of markets for the release of the game: Australia, Europe, Japan… Yes, as a rule, these markets are less profitable compared to America, but they will definitely help us cope with our future tasks. Constant updates of the game will also periodically raise sales.
Thanks
After the Kickstarter campaign was over, we discussed our sales objectives. The number on which everyone agreed, and which has already been completed – 150 thousand copies. This was our maximum estimate. Therefore, thanks to everyone who supported us and made it possible to achieve Shovel Knight’s goal in the first month. We did it!
It was a crazy run! And we haven’t come to the end of it yet. We continue to work hard on the game so that it is loved, so that it is played and that it spreads like hot cakes. Our new goal is to reach the 1 million mark to finally consolidate Shovel Knight as a modern classic.
A source: http://yachtclubgames.com