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Unhealthy interest in sales figures

Discussion in 'Iron Tower Studio' started by t, Mar 28, 2014.

  1. HoboForEternity sunset tequila Patron

    Mar 27, 2016
    Disco Elysium
    It would make the qantari desert so amazing

    Yes. I have an agenda for that planned AoD sequel. Sounds too amazing.
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  2. Fenix Arcane Vatnik

    Jul 18, 2015
    Russia atchoum!
    If anything I would advise to plan next game for streaming services, OR at least next after next for sure.
    But then probably whole internet infrastructure will be changed, so it all in smoke...
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  3. Vault Dweller Commissar, Red Star Studio Developer

    Vault Dweller
    Jan 7, 2003
    There's no simple answer to this question as there are too many variable there. Take VAT, for example:

    In the beginning nobody charged any tax on digital goods but now that everyone realized what a cash cow it is, not a month goes by without more countries demanding their cut. VAT makes sense when the state invests in infrastructure and services that support business growth, and when the business can get a tax credit for VAT paid, which balances it out. Without neither, it's nothing but a cash grab - a tax on the privilege to sell digital goods to Russian (20%), Swedish (25%), Italian (22%), or German (19%) gamers; 53 countries in total. In comparison, Canada doesn't charge tax on digital goods yet and the United States is 50/50 on the issue (only 28 states tax digital goods (1-7%), the rest don't), I don’t think they’ll be able to resist the temptation to put a hand in someone’s pocket for long. The tax is included in the price and thus comes out of the developer’s end, so when you buy games, 20% of what you pay goes back to your government (do your patriotic duty and buy more games to support your country!). So roughly half of what you sell is VAT-free, half isn't, but the VAT rate varies from 10 to 28%.

    Engine fees also go from 0 to 5% which can be applied differently, in some cases to gross sales, even before Steam takes their cut, in others after. Corporate taxes also vary based on your setup (for example, employees vs contractors) and where the company is incorporated and whether or not it has a tax treaty with the US. If it doesn't, you have to file a US return, pay an accountant a few grand a year as the US tax code is a mess with many hidden pitfalls, and pay tax on the money paid by the US citizens. Fortunately, Canada has such a treaty which states that royalties and/or digital goods shall not be taxed, so we dodged a bullet there. The corporate taxes are low here - 11.5% (in the US it's 21% now, Biden wants to raise it to 28%), etc.
    • Informative Informative x 5
    • Brofist Brofist x 3
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  4. Zanzoken Arcane

    Dec 16, 2014
    Thanks for the detailed response. From the sound of things I think my estimate was probably a bit high then.
    • Funny Funny x 1
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  5. Invictus Arcane The Real Fanboy

    Nov 3, 2013
    Divinity: Original Sin 2
    All most of care about is that:
    The EA sales did well
    The game is looking good
    The ensured success of ITS to make sure we get quality games from quality developers
    Oh and sign me up for an updated Age of Decadence!
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  6. xuerebx Augur

    Aug 20, 2008
    I have access to a company's financial statements of someone I know who has a game on steam which has sold reasonably well. There are no sales units, but there's a gross profit margin of 67% (on €1.8m revenue) over a 3 year period, which is a pretty good margin. I can't see the details of what the cost of sales is made up of, since it's not mandated to be disclosed under local GAAP rules/IFRS (accounting conventions), but it doesn't include salaries or director fees (just 3 directors who are also the same 3 developers) so I think it's reasonable to conclude it is steam fees/ license fees etc.

    Anyway, €1.2m of gross profit over 3 years split between 3 people is pretty good (around €130k per year income).
    Last edited: Jun 1, 2021
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