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Shovel Knight devs break down costs, sales

180K copies sold in a month, but team worked for no salary for 5 months

Yacht Club Games, the indie developer of platformer Shovel Knight, has broken down the development costs and sales figures for the game after one month on the marketplace, revealing both the hardships and rewards of the process.

Shovel Knight was originally launched via Kickstarter, raising $311,502 by the time the campaign closed on April 13, 2013. Of those pledges, 64 per cent came from people looking for a PC version of the game, with the remaining third made up of 15 per cent Wii U backers and 21 per cent 3DS.

"Surprisingly, Nintendo backers only provided around a third of the total support," reads the extensive post on the studio's blog. "We would have expected this number to be much higher given how focused (at least inwardly) our campaign was around Nintendo platforms. Were the naysayers right; do Nintendo indie games not sell well!? We'll come back to this point later when we discuss the full sales, but it's probably safe to say that early on, Kickstarter was still a PC dominated platform."

"It may be surprising, but even a small downloadable game can often cost upwards of a million dollars to make"

In addition to the Kickstarter money, Yacht Club raised an extra $17,180 form a Paypal donation campaign, meaning that total budget for the game came to $328,682. That figure, however, shrinks quickly when costs like taxes and Kickstarter payments are subtracted. Plus, Yacht Club explain, it's really not a lot of money to make a game with, especially when you're employing six people.

"It may be surprising, but even a small downloadable game can often cost upwards of a million dollars to make! We planned a game that was going to take five people more than a full work week (six if you count Jake) for two years (this schedule includes a year for the game, with an additional year for developing stretch goal content)! That kind of game simply is not possible on 328k, and let's break down why!"

The team breaks down rough costs for employees, including tertiary costs as well as salaries. Then cuts them in half to be able to make the game.

"These days, most studios will put the average cost of a developer on a game at around a $10k man month," the blog continues. "What does that mean? Essentially, each developer will cost the company 10,000 dollars a month or 120,000 dollars a year. Now, of course, not every developer on the team makes that much money and often, NONE of the developers on the team make that much money.

"That's because this monthly $10k goes into much more than just paying the salary of the employee. It covers any and all expenses accumulated from having that employee on site. That includes not only individual expenses for the employee like salary, health insurance, etc but also company expenses like rent, electricity, water, food/snacks, conventions, computer and other equipment, software licenses, lawyer fees, taxes, development kit expenses...the list goes on and on. Given that it encompasses so much, we can use this figure to calculate the cost for the entire game. Also note that some developers may only be on a project for a few months, while others will work for the whole project's duration. The man month total number can vary widely for games, but for Shovel Knight, we figured it was something around 144 man months to finish the game."

What that meant for yacht Club was an estimated cost of $1.44m. Not the sort of cash the team had to spend. In order to cut those costs, the team's composer offered to take remuneration once the game was out. Still, the team was looking at an unpayable bill of $1.2m. Time to make sacrifices.

"At this point you have to be thinking, $30k minus taxes for one year's salary, a grueling work pace (think: 12-18 hours a day, 7 days a week) and no stability whatsoever...why bother?"

First in the line for compromise were stretch goals. The team had initially budgeted for these as accounting for a year of the team's development time - half of the total project length. By postponing these to post-release content and putting Shovel Knight out after just one year instead, the budget could effectively be halved to $600K, a more plausible figure, but still not small enough.

"Unfortunately, we've now run out of options," the blog continues. "The only thing left to do is cut the amount allocated for each person by half. So now we're running on $5k man months - which is extremely low. At first, that sounds like $60k per year, but with the company costs, taxes, etc, in reality, it's more like $30k for each of us over the course of the year... and that's before any taxes.

"At this point you have to be thinking, $30k minus taxes for one year's salary, a grueling work pace (think: 12-18 hours a day, 7 days a week) and no stability whatsoever...why bother? An NES game, that's not going to sell. The 80′s are over, man, get with the times! The cool kids are all into the AAA explosive action sequences. You'll never make it!"

Estimating from the number of Kickstarter backers (around 15K) and using other studios' advice that these pre-orders usually were doubled to quadrupled by week one sales, the team forged ahead, hoping to scrape through the hard times with the promise of reward. Confident that it would all be worth it, development continued.

"We ended up operating for five months without money or payments to the team here. It was a difficult period, where some of us were awkwardly standing in front of cashiers having our credit cards declined, drawing from any possible savings, and borrowing money from our friends and family"

"We felt confident, but in the end we missed our target - remember how we didn't release our game on March 31st? Yep, that was also the point that the budget was gone, and when our reserves ran low - also known as "we ran out of money" (actually it was March 1st).

"We stopped any and all spending that wasn't absolutely crucial to the game and the game's Kickstarter. Having already budgeted out and frozen big amounts like Kickstarter reward costs, we were down to the day to day. Electricity? Needs to be on. Internet? Need that too. Dirt Letter Envelopes? Order 'em. Supporting ourselves? Well...

"We ended up operating for five months without money or payments to the team here. It was a difficult period, where some of us were awkwardly standing in front of cashiers having our credit cards declined, drawing from any possible savings, and borrowing money from our friends and family. But we made it to the other side!"

Week one sales figures evened out, showing a PC skew to Kickstarter backers.

Luckily for Yacht Club, that 2x-4x figure began to look conservative as soon as the game went live, selling 75,000 copies in week one alone. Interestingly, the platform demand also evened out at this point, with sales split fairly evenly between Wii U, 3DS and PC.

"There are a few reasons we think our preorder prediction ended up being such a conservative estimate. One is...we were a Kickstarter! That's not quite the same thing as a preorder. People could only attain the preorder for a limited time, so the stats aren't 100% aligned with what a preorder would do. We think due to the PC nature of Kickstarter, we saw a higher amount of sales on Nintendo's platform when the game actually got released. Nintendo users are more inclined to buy the game day one rather than through a preorder on Kickstarter. Finally, the preorder prediction isn't a set in stone statistic, but more like a guideline for what to expect. We had done a lot of promotion and marketing at conventions and on media sites to prove ourselves over the course of the year, and we think people responded to it in kind! Nintendo also did an amazing job supporting us through their store placement and own marketing channels."

To date, with the game on sale for a month, Shovel Knight is in the hands of 180,000 customers, exceeding the team's original lifetime sales goal of 150,000. Not wishing to rest on their laurels, Shovel Knight's creators have set themselves a new aim: 1 million lifetime sales.

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