Design Journey

Fri Oct 14 – Rough Budget

During my all-nighter last night, I drafted a beginner budget and estimated costs for design, artists, advertising, fees from Kickstarter and their pledge manager, rough manufacturing and freight costs, and rough fulfilment costs.  This produced a target for the Kickstarter campaign.  If we fill all the reward levels, we’ll need about 80 backers.  This seems like a reasonable number for a company just starting out with our first game.  Heck, we probably can get halfway just with friends and family. 

This industry isn’t a surefire way to get rich.  Hitting our target may net us $20,000 to split three ways.  Hitting 500 backers to sell our entire first run may net about $35,000.  This would have to go viral and attract 3000 backers to reach $200K.  These profits go down rapidly as expenses go up, and I’m sure there’s a lot of expenses I can’t predict.

From reading other game creators, there is a large entry barrier to selling in Europe.  The Value-Added Tax, or VAT, is 20% of the revenue, which can be partially offset by freight and possibly other business expenses.  The registration and monthly submission fees are about $5000 per year.  If our profit were $50 per box, we’d need 100 backers from Europe to break even.