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  • Analyzing Early Access Finances Of Our First Indie Game

    [05.31.18]
    - Tomer Barkan

  • Income

    During the 40 months that we've been working on Judgment, the company's income totaled $560,000. Out of these, $80,000 were earned by providing programming services to other companies during the first year of development, and the other $480,000 were earned through sales of Judgment in EA. The $80,000 were not enough to cover our actual money-out-of-pocket expenses before launch, and we did have to invest and risk our own money before we started seeing any income from sales. That money came from my own savings, after having worked as a programmer in network security for many years.

    The $480,000 is the actual amount of money we got in our bank account after the stores took their shares, credit card fees, VAT, refunds, and other such costs. The total amount that players paid for the game was much higher.

    Profit

    The math is simple - we had an income of $560,000 while our development costs were $650,000 - for a total operating loss of $80,000 during the pre-release and Early Access periods.

    Considering this is our first game, and other than money we also earned very valuable experience, reputation, and connections - we are very happy with this result. However, our story is not over yet. We still have the full launch ahead of us, which means more income, and we still plan to keep working on the game, which means additional expenses as well. I do predict that after all is said and done, Judgment will turn a profit.

    Sales Graphs

    Let's take a look at how Judgment sold over the Early Access period:

    * The last bar in these graphs only includes the first half of April 2018.

    In the monthly sales graph above you can see that right after launch, which was one of our strongest months, we had a bit of a slow period. During this period we focused on improving the game, we did not have any discounts - except for the store-wide sales such as Steam & Humble Summer Sales - and we didn't do much to promote the game.

    After a few months, sales increased dramatically, around October 2016. The increase is hard to explain. Our user score rating improved, and we released several important updates, plus we improved our store pages and updated the trailer. We can't say for sure what facilitated this change, but we do believe it had to do with improving the user-defined tags on Steam, which caused the store algorithm to recommend Judgment to more relevant players.

    June 2017 was our strongest month to date, it was the month in which we released German and Chinese versions of the game, combined with a Summer Sale discount.

    October 2017 is another interesting month to look at. In September, we increased the price from 14.99$ to 19.99$. As you can see, there was no visible impact on the bottom line. Every sale was worth more, but the total amount of sales decreased - cancelling each other out. Let's take a look at copies sold:

    You can clearly see a drop in October 2017 compared to September, whereas the revenue graph shows more or less a steady number. Increasing the price did not improve or harm our revenue. However, with a higher price, you can do deeper discounts later on. The potential sales at $14.99 that we lost when we increased the price to $19.99 are not necessarily lost, they may just be waiting for a discount.

    Now let's look at the daily sales graph and try to analyze some key points.

    We can see the same trends as in the monthly sales, but there are some more specific spikes to take a closer look at. The first one was a small spike about a month after release, in May. That was a 2-million subs youtuber that posted a video of the game. We sold around 400 copies just due to that video, which was a lot given that it was in our low-sales period.

    Next, there is a mini spike on Black Friday 2016, and a larger spike in Dec 2016, due to our participation in the holiday sales. Usually, the first few days of a discount show a taller spike, with a 400% increase in sales, but towards the end of the sale, it slowly decreases to 50-100% higher than normal. The daily increase in sales of a discount was around 150% higher on average throughout the entire sale.

    After the Holidays, you can see a very tall spike in March 2017. That was our first custom sale. We only discounted the game by 10%, but being on discount was enough to get increased visibility across all stores and higher conversion rates.

    The next spike starts around May 2017, when we released the German and Chinese versions of Judgment. The peak of that spike in June 2017 is the Summer Sale discount. You can see that releasing new languages created not just a single tall spike, but an entire elevated area in the graph. This explains June being our strongest month to date, an entire month of better than average sales + a taller spike during the summer sale.

    After that there are several more spikes, most of them are either large youtubers posting videos (Thanks Quill18), or discounts, be they seasonal store-wide sales, or our own custom discounts.

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