The indie game developer's start-up cost

This article is a free exploration on the cost of starting an indie game business. The calculations are rough and not meant to be exhaustive. The typical individual starting an indie game business is relatively young, willing and motivated (or else he would'nt try to be an entrepreneur). I assume throughout the calculations that the individuals are living on minimal money and estimate the living cost of every one of them to be $15,000 per year (from experience, that's about what I need to sustain myself). The cost estimates are for one year of business, which is a reasonable amount of time for building a small game.



Case one – The garage dweller model
Let's look at the smallest cost possible. The hypothetic situation here is a lone developer trying to develop downloadable games or games for the web and generate revenue via various income streams. Even at such a level, there is several possible scenarios. Let's look at two of them:

• Cheap, used computer with peripherals (screen, mouse, keyboard, printer) – $1000
• One year internet access – $500 to $1000, depending on available services
• Free graphic softwares (say, Gimp) – $0
• Free coding environment (C++, java, Flex, ...) - $0

We have a whooping total of $2000. It's interesting to note that the costs described above are probably already been paid by anyone who is interested in making games and would actually NOT involve any new investment from it's part. The only thing left to pay for is time.
The work could be distributed via free channels like online game portals where posting games is free and revenues are generated through advertisements, sponsorships or royalties.

Total investment for one year: $17,000


Case two – The lone ranger model
The second model is still a lone developer but working with better tools.

• A nice computer with peripherals – $1500 to $2000 (let's be conservative)
• Adobe web premium suite (flash, dreamweaver, photoshop, illustrator, ...) – $2700
• One year internet access – $500 to $1000
• One year web hosting – $100
• Domain name – $40

So far I'm not considering the cost of renting an office space since I'm assuming the developer works alone and from his home, « garage style ». In this second case, the initial investement rises to a little under $6000. Still not a big deal.
Total investment for one year: $20,840


Case three – The small start-up model
The final model I'm looking at in this article is a small start-up company formed by a party of three individuals: one designer, one programmer and an artist.

• Office space – $1200 x 12 months = $14,400
• One nice computer with peripherals – $1500 to $2000
• Two state of the line computers (powerful, dual screens, lots of ram) $3000 x 2 = $6000
• Adobe web premium suite – $2700 x 2 = $5400
• One year internet access – $500 to $1000
• One year web hosting – $100
• Domain name – $40

$28,940. We are nearing the $30,000 point in investment. The team members probably already own computers, so if they want to stick with what they have, it is possible to lower the initial investment by a few thousand dollars. It is also possible that they will all work from home so the office space (the highest investment), while a neat thing to have, might be superfluous. With a team of three, the possibilities are soaring and the amount of work that can be done in a year is much bigger. Depending on the scope of the game, they could easily pull out from 1 to 3 games during the year.
Total investment for one year: $73,940

Comparison chart:
Case one – The garage dweller model: $17,000
Case two – The lone ranger model: $20,840
Case three – The small start-up model: $73,940

In the end, if you intend on starting-up a small indie game business and want to buy yourself a year of development, we could roughly estimate that a fair amount of cash to start up with would be around $20,000 per individual. While the number we explored here are interesting, there are several other scenarios that we haven't looked at. Some developers keep a full time job and try to work on their business on the evening and week-ends, others have part-time jobs or accept some freelance work for other companies in order to survive. Still others outsource the art, music or coding to other companies so they require more money but less time.

Personally I am blessed with a part time job that fulfills my basic needs (incomes fluctuating somewhere around $20,000 a year) and leave me with a four month stretch of free time during the summer. I have been able to develop a first game last summer after a three months of full time development and the result of my work was a total income somewhere around... hmmm... $5... We might as well say I got nothing from it but I would say that it's not bad for a first game that taught me much about being an indie developer.

And with that last bit of information, I would like to end the article with this advice: design your first game to be a very small one so you can build it in only a few months and do not focus on money. Expect go gain $0 from it because it is quite probable that this is what you'll get. However, expect to learn very much, and be prepared to build a second game using that knowledge!