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Features console indie development in the Russian province

I am very pleased that my latest article on the promotion of the game on Steam Greenlight , which I wrote on Habr a little over a year ago, was read almost 50k times and it seems to me that in the end it was not written in vain. Then our little team just got the green light. Since then, many more events have happened, but one of the most interesting and significant was that we also went to ID @ Xbox for independent developers, with the possibility of releasing our game on the Xbox One console. And a week ago, the game still saw the light.

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In this article I want to share interesting and possibly useful information to someone about what we encountered while preparing to release our game on the Xbox One and Steam. And for this, I will try to cover the following topics:

How much can the development of a console project cost?


Usually everyone knows the budgets of large AAA projects:

But few people say how much the development of smaller projects cost, including some successful icons of the indie industry, for example:

Separately, it is worth noting the projects from Tim Schafer and Double Fine , they are not shy and willingly share information how much they spend on developing their games:

From projects that are still in development or have recently come out, I would like to note:

As you already understood, in the industry it is considered that if the development of the game was spent less than 200k EUR , then this project is low budget (Low Budget) - and we definitely fall into this category =)
')

Financing


Where did we get the money to develop the game?
Two and a half years ago, we, on bare enthusiasm, began to work long and hard on the early prototype of TurnOn , with which we were lucky in the summer of 2014 to win the international competition Microsoft Imagine Cup and receive a grant of $ 50k . About how we got it you can see the video in this article on Habré .

By the way, it was still a “wonderful” time when the dollar cost 38 rubles, and of course this money ended at some point, but we managed to distribute the accumulated debts, buy the necessary equipment and rent a small, but cozy office for quite a long time. . Therefore, for the remaining development time, we “tightened up” very strongly and financed the project at the expense of our own savings and a very ascetic lifestyle.

Why did we try to make the game without additional external investments?


Often, if a young company (team) has just received an investment in its first project, the situation can be represented something like this:
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Any investment is money in debt, which the investor expects to return with certain interest.
If we borrow, we must be sure that we will be able to earn more in a certain time and return this money plus interest. And for this you need to at least understand how the market works.

How to calculate everything and have an idea what to expect ( sofa analyst from Eugene )


So, let's imagine: you are an aspiring gaming company in Russia with an interesting project.
The first thing you need to do is calculate everything and get an idea of ​​how exactly your company will ultimately work from a financial point of view. Let's first calculate what percentage of the revenue will reach you and your company:
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  1. Imagine that you are selling your game on some kind of site (which is not important) - there are rumors on the Internet that usually the site takes 20-30% - more often 30%
  2. Suppose you are a company that operates under the simplified taxation scheme (USN) - then you need to pay 6% of income tax
  3. The money was credited to your company’s account and you have at least two opportunities to receive cash: pay a salary or withdraw dividends
  4. In the current situation, in order to pay the RFP (we mean that you do not use any benefits from the state, you will still get them ), your company should keep approximately 43% (13% of personal income tax, 22% Pension Fund, 5.1% honey) from the salary insurance, 2.9% social insurance). Total of 100% of the profits from the sale of the game will reach you in the form of wages - 37% .
  5. The second option - for investors and co-founders - dividends. According to the tax legislation, a dividend tax of 13% should have been paid, i.e. in the case of dividends: out of 100% of the profits from the sale of the game, 55% will come to you in the form of dividends .
  6. Naturally, within the framework of the company, it is necessary to combine payments for salary and dividends. Or even use a different tax system, but the principle, I hope, is clear.
Go ahead.

How much will actually cost one copy of the game


Answering the question how much the game costs, it’s customary to talk about the base price in dollars, i.e. How much is a copy of the game in the US. Take a game similar in genre with us, for example, the platformer Never Alone , the base price of which is $ 15 , and see how much it actually costs in the world .

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Please note: those regions in which the price of a game when converting a local currency to dollars is less than the base price are highlighted in red. The leader at a low price, as is well known, is Russia - the game for $ 15 is worth $ 5.3 .
In total, in 3 regions the price of the game is above $ 15, but according to the tax legislation of the European Union, the VAT tax, which used to be 15%, usually has to be paid from each sold copy of the game, and now varies for each country from 17 to 25% ( reference ).

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It is also worth considering that during the life cycle of the game in the store, as a developer, you will stimulate sales through promotions and discounts. The standard and accepted discount practices are as follows:

Sitting on our cozy and soft couch, we can conclude: if the game has a base price of $ 15 and it goes out in all regions, then if we take a whole year of sales, the very approximate price of one copy of the game will be $ 8 on average (actually maybe more, less, but we follow the best scenario).

We model potential investments


So, I will try to answer the question: “Why did we try to make the game without external investments?”
Let's simulate a situation when a studio receives investments from an investor in a low-budget but cool project that feels good on consoles. Given:

Remember that

Slightly higher, we figured out how much a copy of a game can actually cost approximately a year - $ 8 (with a base price of $ 15 ). And also, that from 100% of the profits in the form of dividends, the investor and the company will reach 55% .

In this table - the approximate "sofa" estimates, how much should the game get profit, and how to sell:
Number of copies sold
The game has earned
After commissions and taxes
Investor gets
20k
160k $
88k $
53k $
30k
240k $
132k $
80k $
62,5k
500k $
275k $
165k $
100k
800k $
440k $
$ 264k is not a loss
150k
1200k $
660k $
396k $
227k
1800k $
1000k $
600k $ - success (beat off)
  1. So that the investor was not at a loss and returned his investments, as if he had not risked and just put the money in the bank at interest, we see that we need to sell about 100k copies of the game for the year
  2. In order for investments to become good ( ROI> 3 ) and the investor got what he gave the money for, it is necessary to sell 227k copies of the game in a year.

Can even a good game sell in such a circulation?
A year ago, Sergei Galenkin (the creator of the SteamSpy service) said that in 2015 the average sales of good indie games (which many people know about) on Steam were around 30k copies ( link ).
And in 2016 , good indie games expect average sales of up to 20k copies ( link ).

You also need to take into account that if you decide not to make another multiplayer shooter or some kind of binding to the server, then your sales can undermine the high level of piracy . For example, in our project for the first week after release, according to the number of active players in Unity Analytics , we can say that we are pirating in the ratio of 1 to 30 (1 bought to 30 pirates).
That is why we decided not to attract additional investments, so that in case something happens, uncles with shovels and axes did not run after us.
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Why do we leave without a publisher?


While we were watching, we realized that for a young team without a lot of experience, you can find two types of publishers:

There are almost no publishers of the first type (or we did not find such), and publishers of the second type usually work according to the following schemes: 70/30, 60/40, 50/50 .

There is also the 50/50 format + full coverage of the publisher’s expenses in the first place : the publisher says that he will spend a certain amount on advertising and promotion, then return it first of all from the profit, and then the remaining 50/50 with the developer.

There is a moment with an unjustified percentage of profit sharing in the absence of risk for publishers of the second type.

In my humble opinion, this is where you need to begin to negotiate:
You, as developers, made the game, you can count how much money and resources were spent on it, i.e. game development budget. Suppose $ 50k. If you find a publisher who will tell you exactly how much to spend on promoting the game, for example, the same $ 50k, then the starting point of negotiations in the 50/50 format from profit is acceptable.

What an Ideal Publisher Should Do


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When we asked ourselves whether we needed a publisher, we realized that we had already done more than half of it ourselves. And the rest is what can be learned with due diligence. Therefore, we decided to make a “leap of faith” with this project and work without a publisher.

How to get to Steam


Now it’s quite simple:
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  1. Develop a game
  2. In the middle of development, you can start preparing demonstration materials for the project.
  3. Pay $ 100 (3200 rubles in Russia) to a charitable foundation through Steam on a special page ( link ) and you will be allowed to issue a project page in Greenlight
  4. Read the article " Promoting indie games on Steam Greenlight " or other articles of similar subjects, prepare mentally
  5. Make out the page of your game and publish in open access
  6. Make some efforts to vote for your project.
  7. After some time, get an invitation with this project on Steam
  8. Sign the NDA and all the necessary documents in order to gain full access to the platform. Follow the instructions below.
  9. Finish and release your game

How to get to the Xbox One


Now, about how to get into ID @ Xbox. Here I will only refer to public information from the official website of the program - http://www.xbox.com/ru-ru/Developers/id . So, what is the order of your actions:
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The very first step is to register in the program (means that you just start receiving news and updates in the program. After that, you follow the algorithm described on the official website. Everything seems simple, but for example, even though we won the Microsoft Imagine Cup 2014, we didn’t have a “cronyism”, and we got into the program only after 9 months of active correspondence with the selection team (that is, from the moment of filing the application with the game until signing).

Why pay and get age ratings


One of the pitfalls that the team that launches its project for the first time on consoles will have to face is age ratings . You have probably heard that in almost every country where you want to run, there are age ratings. But if you released games under mobile phones or Steam, then this problem did not really concern you. What is the difference for projects on consoles:
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  1. Mobile games - rating is necessary, but it is received free of charge in the format of a questionnaire in the developer's panel (do you have nude scenes in your game? Scary items? Alcohol, does the character smoke a cigarette and so on?). Every year it becomes easier and simpler, and more recently, the so-called IARC system was introduced, which allows you to get almost all of the regional ratings for free through a questionnaire in the developer’s panel (Windows Store, Google Play, Amazon, etc.). Learn about this system on the official site - https://www.globalratings.com/
  2. Steam - ratings are not required. Have a rating? - OK! No rating? Do not worry, your game will still be available in all regions, if you yourself want it.
  3. Consoles - ratings are required. And the most important of the regions are paid.

Prices for age ratings

Region
Site
Cost of
ESRB
USA and Canada
www.esrb.org/
Free / $ 12500
Pegi
Europe
(without Germany)
www.pegi.info
450-1100-2200-2800 EUR
one platform ( link )
COB
Australia
www.classification.gov.au
300-400 $
OFLC-NZ
New Zealand
www.classificationoffice.govt.nz/
$ 1400-1500
(if 12+ or higher)
USK
Germany
www.usk.de/en/
1200 EUR + 300 additional platform
+ 300 trailer
CERO
Japan
www.cero.gr.jp/e/
$ 1000 + reseller
GRB
Korea
www.grb.or.kr/
1000-1500 $ + intermediary
CSRR
Taiwan
www.gamerating.org.tw
Is free
FPB
South africa
www.fpb.org.za/
$ 200 or based on PEGI
DJCTQ - Digital
Brazil
http://justica.gov.br/seus-direitos/classificacao
Free (based on PEGI)
PCBP
Russia
Free (based on PEGI)
ESRB (USA and Canada), if your game comes out only in digital form - you are lucky. After a certain correspondence with the ESRB representatives, you can get access to the portal and get your age rating for free by passing a special survey.
But! This free version of the rating is very trimmed. For example, you can not choose the type of violence, you can specify: there is violence or it is not. And in our case, an overvalued rating of 10 (E10 - Fantasy Violence) has always been issued.

If your game in this region will also be sold on disks, then you will need to go through the full procedure for obtaining a rating (it is rumored that since 2015 it costs $ 12,500). The benefits of spending such a heap of money - you get a full rating that will match the game + normal descriptors.

PEGI (Europe without Germany), in principle, there are no free options. But! There are variations in price depending on the project.

It is important to remember that these are prices for only one platform. For example, if you received a rating on the Xbox for 2000 EUR, then you will have to pay as much for the same version of the game on the PS4. DLC must also be rated and paid separately (but they say there are other rates).

Australia and New Zealand - to get a rating in Australia costs 300-400 dollars. This is usually sufficient for Australia and New Zealand. But if your game is tough and violent, then you're out of luck. For such games in New Zealand you have to pay another $ 1500.

Germany - the Germans do not accept the European PEGI rating and, therefore, introduced their organization, which collects money from the developers - the USK rating. It is worth the pleasure of 1200 EUR + 300 EUR additional platform + 300 EUR trailer . Keep in mind that if you plan to show your game at Gamescom in Cologne, you will need to pay for the demo and for the trailer for it.

Japan and Korea - paid ratings + an application must be submitted by a legal entity or representative registered in Japan or Korea. For little indie right by.

The remaining rating I call easy
Taiwan - free, incomprehensible, brake site, self-registration, solved.
South Africa - $ 200 or the PEGI rating can be taken into account.
Brazil has its own rating system - it is free (through a large application in Portuguese), but if you already have a PEGI rating, then it can also be counted.
According to the holders' platforms, it turns out that we also have our own age rating system for games in Russia . But since no one knows what it is, which organization issues a rating and how to get it; the rating from PEGI also counts.

What is the difference between Steam and Xbox - the disadvantages and advantages of console development for indie?


Let's look at the question, what could be the difference in development time for Steam or console, it may be useful for planning:
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  1. Most of the time most likely it will take you to create the game itself and its fundamentals (this is individual)
  2. After that, there is usually a question about integration into the Steam ecosystem. Looking at the Steam store and the projects presented in it, it becomes clear that you can do nothing at all and skip this step and still go on Steam. Those. this step may take approximately 0 to 30 days
  3. Perhaps you are a responsible developer, and after the game is ready, you want to test it and check for quality (does the game work and does it crash). And you can not do this, it can take from 0 to 30 days for you
  4. As soon as you are ready, you can release your project.
  5. Release

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  1. As usual: first we develop the game and its basis.
  2. Integration into the ecosystem can take a different amount of time for different projects with different experiences - let it be from 15 to 45 days
  3. We strongly recommend to spend time on a comprehensive internal and external (friends, acquaintances) QA and testing - at least two weeks
  4. Age ratings - this can take from 4 weeks. The most important thing is that the game should be ready (with all content), to work fully in the ecosystem of the platform for which the rating is obtained
  5. Then there are the stages of certification and preparation for release - as soon as you are accepted into the program, you will learn how they go and how long they can take.
  6. Release

From our experience: in the early to mid-March, we thought that our game was ready and almost nothing prevented us from releasing it on Steam. But we came out on June 1, 2016, before the start of the dead summer season.

Cons console development: Long, Costly, Marketing suffers
In what sense does “marketing suffer”? If you focus on any specific dates for the release, then most likely you will not have time from the first time.

Advantages of console development: A new market, a different attitude of the press, not a fucking mukhra.
A few months before the release, we learned that our game will be the first project from Russia to be released on the Xbox One console as part of the ID @ Xbox program. Of course, it was nice to know that we did something first with a team of 4 people.

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Instead of conclusion


If this article was helpful to someone, you know how to say thanks;)
If the topic is interesting, then it is quite possible that I will try to write the next article as soon as possible. It is interesting to know your opinion and discuss the topic in the comments.

Thank you very much for your time spent reading this article.

Source: https://habr.com/ru/post/302848/


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