STATE OF THE FACTORY: YEAR 1

Here’s how Weather Factory is doing, here’s how we thought we’d be doing, and here’s what we’re doing next.

I’d like to do one of these every January (this January, we had a major cat health emergency AND a major Cultist update, so it slipped). I know indie game studios can look very different from the inside and the outside, and I like being transparent. I hope this’ll be useful to other indies, and interesting to our community. Plus, it’s good internal perspective for us to review the year like this.

There’s a lot of info here. Maybe make yourself a tea or coffee before you start. 🙂

YEAR 0

Image result for wanderer above the sea of fog
This is totally what I looked like on my year out, shut up

I’ve said Year 1 above, but there’s a prologue. I sold my old studio to my old studio (biz is weird) and went off on a sort of ronin year doing guest writing gigs for larger studios – Paradox, BioWare and the much lamented Telltale are the ones I can name.

This worked out about as well as I could have hoped. I wanted to take some time to think about what I wanted to do, and I wanted to learn. Each of those studios had a lot of talented folk that I could learn from. A lot of those folk had been at this a lot longer than me, and every one of them had very different experiences from me. So I learnt a lot. If you ever get a chance to take a freelancing year, I recommend it. (All else being equal, I always prefer to hire people who have freelanced, because they have more variety of experience.)

Weather Factory existed as a corporate entity at this point, but it was just a vehicle for my freelancery. When the year was up, I ran a Kickstarter for Cultist Simulator, recruited Lottie as my co-founder, and off we went.

YEAR 1: WHERE WE WERE THEN

So at the beginning of the year (well, year + 4 months, to be precise) we had

  • two full-time employees
  • 4,788 Kickstarter backers
  • a prototype
  • starting funds
  • a publishing deal
  • a deadline
  • no revenue of any kind.

Our creative goals this year: well, it says on the ABOUT page of this blog it’s
to make ingenious narrative games with a consciously indie aesthetic. An alternative description I sometimes use is ‘to make narrative games that no-one else would make’, or ‘to make narrative games that look like quite daft ideas.’ Specifically, with Cultist, we wanted to experiment with some ideas about melding narrative and mechanics; we wanted to try to maximise emotional effect with really minimalist, pithy writing; we wanted to make a game where understanding the game was itself the game. But this is the blog post you read to get the sales data, I’ve talked about the creative side a lot elsewhere.

So our commercial goals this year: to release Cultist Simulator as quickly as possible in order to get a revenue stream and start building a name for the studio.

As quickly as possible’ was essential. We didn’t have any revenue, and Cultist was, intentionally, a weird risky project that might make no money. If we were going to fail, we wanted to fail fast and learn. So we set a hard deadline of 31st May, cut ruthlessly when that release date was in peril, and released the day we said we would.

Image result for cultist simulator rezzed
We made ourselves hostages to fortune by putting the release date on the backdrop that we printed for demos at events. A number of other indies who saw this said polite things like ‘that’s a, ah, bold choice’.

‘To start building a name for the studio’ also influenced a lot of our decisions. We considered self-publishing. The Humble deal we were offered was a 60K USD advance and marketing assistance in exchange for 30% of all PC/Mac/Linux sales of the game. We thought 20 USD sounded like a good price for the game. So the choice was between 60K USD up front and 10 USD for every copy we sold on Steam, or 0 USD up front and 14 USD for every copy we sold on Steam. The way those numbers worked out, we’d be (roughly) better off taking the Humble deal if we sold less than 17,000 units, and better off going it alone if we could sell more than 17,000 units.

(If you’re here as a gamer rather than a dev, you might not be clear about the difference between a publisher and a distributor. And in this case, Humble served as our publisher but also we sold the game through their storefront, i.e. they were one of our distributors. So to be clear:

– A publisher will support the development and sale of the game, usually with milestone-based payments to fund development and with marketing and perhaps other kinds of help. In return, they’ll expect some of the money you make from selling the game.

– A distributor will sell the game when it’s finished (or before it’s finished), usually in exchange for a cut of the sale price of each copy.

Deals vary, and some companies fill both roles for a developer. ‘Self-publishing’ just means ‘you don’t have anyone filling the first role.’

It’s not a lot of money as publisher advances go, but I think it was a reasonable deal. I was very explicit up front that this as an experimental project, that I wanted to keep full creative control, and we were obviously one of the riskiest projects Humble was signing. And we kept our IP, we kept the rights to other platforms, we kept 100% of the revenue from any DLC. (Actually, the IP was off the table from the start, but neither of those other two things were true until we looked at it with a lawyer who helped us negotiate. Thanks, Alex T from Sheridans! If you’re dealing with a publisher, even a basically benevolent one like Humble, talk to a lawyer.)

Anyway, our most plausible estimate for year 1 (not lifetime) sales was 20,000 units, so on the face of it we’d lose money. Of course, with Humble’s help marketing the game, we’d probably sell more units, and ultimately benefit, but how many more? We made the decision by thinking about our goals.

1. We valued peace of mind over profits. We were making an experimental debut game and working together while living together as a couple. That’s, uh, quite a stressful situation. We didn’t want to make the stakes any higher than they already were. We’d rather know we’d definitely do OK than take a long shot that might pay off big.

2. We were thinking about the studio, not  just the game. I had a rep from Fallen London and Sunless Sea, but we were starting over and building a new studio with a new brand, and we wanted as many people to see the name WEATHER FACTORY as possible. We’d rather reach more people, even if we made a bit less cash right now, because it would help to have a bigger fan base when we released our next project. And the one after that. And the one after that.

There was a wrinkle, but the wrinkle meant 2 was the clincher. Humble wanted to include Cultist in a Monthly Bundle – their subscription offering. We wouldn’t get any royalties from the Bundle.

We pushed back on that, but it was one of Humble’s red lines. If we wanted a non-recoupable advance, we wouldn’t get royalties from the Bundle. If we wanted to talk about that, we’d need to agree a recoupable advance, i.e., we’d need to pay back the advance before we started seeing any money from the game. That would kill our peace-of-mind preference.

Humble did assure us that everyone who’d made this deal had reported more sales on other platforms after the Bundle went out, because of the publicity and word-of-mouth. We still didn’t love the idea, but two things sold it. First, when I say ‘Humble’, I mean ‘John Polson, Humble’s publishing director’. We’d asked around about John and the word was that he’s a hard but honest bargainer. We were inclined to trust him. Second… we were thinking about the studio, not just the game. We liked the idea of the Weather Factory logo ending up on a lot of PC monitors, particularly the monitors of people who would never touch a bizarro game like this normally… even if it made us a bit less money in the medium term.

A COLD MERCY OF NUMBERS:
THE CULTIST SIMULATOR BUDGET

Here’s the budget Lottie put together at the end of 2017. Some notes:

  • This was the budget up until launch. Post-launch updates and DLC are probably 50% of this again. That 2.5K ongoing support Y1 was ‘if we only sell a few thousand copies and then shut the project down, we can honour our basic tech support obligations.’
  • I’ve xxed out the freelancer day rates, because not everyone is happy sharing that information.
  • Just to avoid misunderstandings in future negotiations, my and Lottie’s day rates up there are internal. My standard external guest writing rate is ÂŁ750 a day at the mo (but I don’t have any availability before 2020 anyway).
  • ALWAYS PUT A MINIMUM 20% CONTINGENCY ON EVERYTHING.
  • God I love working with a good producer. (Hey Lottie.)

At this point half the audience are saying ‘112K? How did you spend that much? It’s only a 2D text game’ and the other half are saying ‘only 112K? How did you spend that little?’ The numbers above are how.

So how accurate did the budget prove to be?

Very accurate, actually. This wasn’t really a coincidence. We were working to a clear deadline, there are only so many hours in the week, and I had a good producer, as above. The final number would have been 131K. Then we decided to spend an extra 10K on marketing for a burst campaign in launch week, so we went over, but the budget served its purpose: to make sure we could afford to make the game, and to make sure I didn’t go off into the creative wilderness and spend an extra six months on it that we might regret. It’s very hard, when you’re a designer, to see the long-term downside of the thing you really want to work on right now.

All that was then. What about now?

YEAR 1: WHERE WE ARE NOW

  • two full-time employees
  • two regular freelancers
  • two cats
  • three awards
  • enough revenue from CS sales to cover our costs and then some, most months
  • a merch store generating a bit of revenue on the side
  • one moderately exciting announcement you should see this month
  • one secret guest writing project we hope to announce this year
  • a next game semi-pre-announced with a lot of buzz
  • a soft deadline for more Cultist DLC in April
  • ……..a completely bonkers long-term plan that I have yet to convince Lottie is wise.

Two of those awards were nice, but one of them, which was all Lottie’s doing and none of mine, was a biggie:

Lottie Bevan, Breakthrough Brit 2018

‘Breakthrough Brits’ is a scheme BAFTA set up to recognise rising British talents who’ve done exceptional things in their first few years in the industry, and to give them access to mentoring and guidance. The mentoring and guidance is already proving useful for us both, but mostly this snippet is here because I’m just extremely proud of Lottie.

Okay I’m done with that. You want more numbers? We’ll share more numbers.

Here’s our P&L and our balance sheet for last year and the year before. WHOA FOLKS YOU’RE REALLY GOING OPEN BOOK. We are, but anyone can see this stuff online at Companies House anyway, and I think a lot of other studios will find it useful.

For orientation, 2017 is the tag end of my freelancing ronin year, and then income from the Kickstarter in September. 2018 is the year we released Cultist Simulator.

Accounting, btw: Xero is great and covers most of our needs, but we’ve used an accountant as well. James Wells of Chandler Wells has been excellent – we recommend him if you’re a small dev looking for an accountant in the UK.

Those numbers aren’t going to make any of the big folks jealous, but they’re a good place to be at the end of our first year of proper biz. For reference, this is almost exactly where my first studio, Failbetter, was in its fifth year of operation.


Now the sales data, since I know that’s what a lot of you are here for. Cultist Simulator launched 31st May 2018. Here at the beginning of Feb 2019, eight months in, we’ve passed the 100,000 unit landmark.

I’m going to break that down to make it more useful, and draw some lessons, but first, a warning. Cultist Simulator is an outlier for a microstudio: a legitimate minor hit. We got here with ten years’ history and experience, and God only knows how much luck.  If you’re a new developer just starting out, don’t expect to make these numbers . You might. But please don’t go bankrupt expecting to be lucky.  And please don’t plug this number into a spreadsheet to show to a publisher. If you want more realistic numbers, Mike Rose has you covered here: https://www.youtube.com/watch?v=WycVOCbeKqQ

Okay, back to the data. Here’s how we sold across platforms, rounded to the nearest ten. I’m delighted to say that Steam now allows us to share this stuff. Indie devs, share your sales data! Everyone is interested. I sure as hell am.

itch: 170 units; 3.5k USD gross (but see note 2 below)

GOG: 3100 units; 11 units refunded; 58,300 USD gross

Humble: 7400 units; 135,000 USD gross

Steam: 93,000 units; 7800 units refunded; 1.46m USD gross

total: c.105,000 units, 1.76m USD gross

If you look at SteamSpy, it estimates a lot more than that – 200,000 to 500,000 owners. Well, there are a lot more than 105,000 players of Cultist. We gave out half a million Steam keys to Humble – more than enough to trigger a warning when we made the key request to Steam. I won’t lie – it is, ah, disconcerting to see all those keys redeemed without any extra money coming our way – but John was right, our sales on other platforms have increased. And however many of those half-million eventually redeem the key, many of them would never have bought the game otherwise.

It’s hard to say how much is the effect of being in the Humble Monthly, because we’ve recently had the winter sales and a major free update to the game, but our daily sales numbers about doubled the day that the Humble Monthly hit, and they’re still at the same level nine days later. They won’t stay that high, obviously, but in the long run I reckon we’ll be glad we went this route. If you’re an indie dev, most people on the planet – even most people on the planet who speak your language – will never hear about your game. There are always more customers out there to reach, and we have a lot more games we want to make.

But the Monthly, anyway, was just the wrinkle. The main deal was marketing help, to get a new game noticed. We will never know how many units we would have sold without Humble’s marketing help (social media, streamer connections, newsletter placement). Half as many? Nearly as many? A tenth as many? But not as many. And that’s the other end of this arrangement.

Notes and Lessons

1. LOTTIE AND I DON’T HAVE 1.76M USD IN OUR BANK ACCOUNT RIGHT NOW.

I mean you know that, you’ve just seen the accounts. But let’s break it down. Folk are always multiplying the numbers on SteamSpy by the price of the game less 30% and assuming that’s the dev’s current cash stockpile. Let me be the latest dev to puncture that illusion.

Platforms take a cut (varies by platform, but Steam is, famously, 30%). Humble as our publisher takes another 30% of what’s left. So, BAM, cut that big number in half.

Sales tax takes a bite out of that. Returns take a bigger bite. Returns hurt, actually, because they come out of the net, not the gross. 9% of the copies we sell are refunded, and that’s 9% of the money that makes it past the platform and publisher cuts.

And, of course, we’ve been paying our salaries, our software licenses, our freelancers, advertising costs and everything else for a bit over a year.

(We spend between 4K USD and 15K USD on advertising in any given month. This is, as far as we can tell, quite a lot by indie standards, but of course a drop in the ocean by big studio standards.)

After that, there’s tax. The UK has a nice tax relief scheme on corporation tax for video games, but we still have to pay income tax on anything we take out of the business.

Anyway, you saw the numbers. Bottom line: ‘legitimate minor hit’ translates to ‘enough money that we can make another game and maybe put a deposit on a house’.

Image result for gabe newell

2. WHOO NELLY HOW ABOUT THAT STEAM DISPARITY

So this has been in the news. Steam has enjoyed an unchallenged hegemony over online PC sales for a decade. Epic and EA and Ubisoft and Bethesda and other big devs can carve out their own routes to customers, but if you’re an indie dev making games for the PC in 2019… you are dependent on Steam for your income.

Our experiences with Steam have been good, but I know that’s not true of all devs, and I’m not comfortable with the idea that if someone at Valve took a dislike to us for a reasonable or unreasonable cause they could shut off my business like a, well, valve.

I think Valve has been an unusually benign market hegemon as market hegemons go (if you disagree with this, think about how almost anyone else in tech with an effective monopoly has behaved; think about Microsoft in the 90s). But it’s still a market hegemon. So I’m very glad to see competition, even though it’s going to mean a more complicated landscape for us little folk, and it isn’t going to lead to any kind of golden era of discoverability.

But here’s something interesting. In Dec 2017, and Jan and Feb 2018, you could pre-purchase Cultist Simulator on itch.io (only) at a reduced price, and get release build access. I’ve talked a lot about why and how we did that here, but this is key: in those three months, we sold 1,070 units on itch, and after launch, when the game was available on Steam, in seven months we sold 178 units.

To recap that: a beta version of the game sold with no marketing on itch.io sold at about ten times the rate the game sold on itch.io after full launch with marketing. Before launch, everyone had to buy it on itch.io, but after launch, a lot of those customers went to Steam instead.

Steam wins on convenience, but those customers aren’t really locked in. If you’re a microstudio who, for whatever reason, prefers to sell through itch, that might be a viable route. Or GOG, or Humble. You’ll need to bring your own marketing, but that’s true on Steam now anyway too.

One last point. I went into this expecting we’d sell more copies on GOG than on Humble, and as you can see the opposite is true. That might be in part because Humble also published us and were a little readier to feature us, or it might be that Humble is shifting more copies than GOG these days. Anyway, there’s a data point.

2.5 THIS BLOG POST IS A LONG BLOG POST

We’re nearly done. Here’s a picture of a kitten.

3. ADORABLE. WHAT ABOUT DLC?

CULTIST SIMULATOR:THE DANCER sold 9000 units on Steam and made us about 25K USD gross, in three months; about 10% of that across GOG and Humble. Itch doesn’t offer DLC distribution.

On the one hand, those aren’t exciting compared to the big numbers for Cultist. Dancer was cheap, maybe even too cheap (2.99 USD) and a lot of our customers purchased in launch week and got a Perpetual Edition with a free lifetime DLC promise.

On the other hand, putting out DLC allows us to honour the Perpetual Edition commitment, and the Perpetual Edition probably helped us hit #1 on Steam because it was a compelling time-limited launch week proposition. And the whole thing took basically six weeks person-time to do, so we’ve made our money back already. (It should have taken less, but I got carried away.)

4. TESTING THE PREDICTION

I like making public predictions, even when they make me look foolish later, because it forces me to test and refine my skills. Here’s the prediction I made about Cultist’s year 1 sales after week 1:

On day 6, across all platforms, we’ve already sold more than 35,000 copies . This is almost exactly the number that Sea sold in the week after launch. I mean, eerily close. This makes me very happy but it also makes me genuinely existentially troubled about my complete inability, ten years and eight launches into my career, to predict commercial success. Next time I might just throw yarrow stalks.
But here you go: I am going to use Jake Birkett’s formula to assume that in year 1 we will sell 157K copies. (Sea sold 350K but just because lightning strikes twice, I’m not going to assume it’ll strike three times.)  I’ll see you in June 2019 and we’ll talk about that. I should note that our publisher, Humble, gets (deservedly) 30% of whatever we earn from this, and that a lot of those copies will be at a discounted price for store sales, so working out final predicted revenue isn’t straightforward, but yes, we made a profit, yes, we will definitely be supporting CS with updates, and yes, Weather Factory will be making more games.

– After the Dawn: What Happened When We Launched Cultist Simulator

You should read Jake’s post, but the heuristic is that your first year sales will be maybe 4.5x your first week sales. (Yes, game revenue is heavily front-loaded. Like they say about films and parachutes, you want to open big if you can.) I think the final number is going to be more like 125K, although it might be higher if we have a couple of good sales. So the Birkett number holds up pretty well in our experience, although as Jake warned, if you have an exceptional first week the multiplier might be a bit lower than 4.5x.

YEAR 1: HEALTH AND WELLBEING

I’m anticipating that a lot of the people reading this will be either small studios, or people who want to make a game and run small studios. So I want to talk about how our lives have been pleasant and unpleasant, and how we could have done things differently. The bottom line is ‘we’re happy! but…’

Microstudios, small studios? what’s the difference?

Depends who’s talking, but I reckon a small studio is one that would fit comfortably in a single London black cab, and a microstudio is one that would fit comfortably in a toilet cubicle.

In theory, we work 9-6 with a relaxed start time, and don’t work weekends. In practice, it’s not that rare for one of me or Lottie to loom menacingly over the other at around 8pm and say ‘are you still working’? But that’s been less and less common over the months, and every week we’ve stuck to it, we’ve been glad. Overtime damages productivity. But more than that, if once you let yourself get into a space where you can’t tell the difference between being at work and being in your life, it is very easy to feel the weight of your task list bearing down on you 24/7. Rest and play time are crucial when you’re doing a creative job. Different people work different ways. Some people have to work in twenty-hour blocks finishing at 3am. But setting boundaries has been crucial to staying sane.

That 31st May hard deadline was tough. We cut rather than crunch, but we did a bit of overtime, we didn’t have any spare capacity, and we took I think four days holidays the whole year except Christmas. And we were both ill for both of Christmas 2017 and 2018, which I don’t think was unrelated. We like working to firm deadlines, but we’ve talked a lot about how to add more slack to the schedule. For a start, we’re scheduling holidays this year. I’m 47, and I probably took a month or two off my lifespan by working too hard last year. This stuff is finite.

All these things are more important because I have quite an ongoing quite serious issue with depression. It still feels weird to type that. I haven’t been suicidal in more than three years, but every few months it becomes an issue we have to work around, and in the meantime I’ve learnt that eight hours sleep a night and careful stress management helps me minimise the bouts. Fifteen per cent of people reading this right now will have personal experience of this. Hi, you. Everyone: remember that fifteen per cent of the people you see being ebullient on Twitter, with apparently successful and happy careers, have something like this, and the rest might have something as bad or worse. Lit windows at night always look serene from the outside.

So this year, now we’ve won a little space, we’re going to try to work about 80% as hard – to spend more time with cats, books and family. And we’re taking holidays. We’ll check in next year and confess how we’ve done.

So if you want to run an indie studio, I hope this helps give a flavour of what you’re letting yourself in for. We’re happy, but.

YEAR 2: OKAY WHAT’S NEXT

What are our priorities now?

In the short term, there are three projects fighting for our attention: the one we’ve codenamed Ophir, the one we’ve codenamed Procopius, and the one we’ve codenamed That Damn Library Game. You can probably expect to see us announce, and likely run a Kickstarter for, one of those this year.

Do what the nice lady says and we can tell you about those projects

Our next project will probably be a notch higher-budget than Cultist – same sort of scope, but slightly more adventurous UI and a few months of polish. I’ve never really made a game with polish. So we’ll be growing the team. I expect we’ll be four full-timers at the end of 2019, which might mean we’re five, because once you open the gates, head-count tends to tick inexorably upwards.

In the longer term…

In the longer term, I want to be a two-project studio sooner rather than later. I don’t like us putting all our eggs in one basket, and eventually a project will fail. In particular, as I said above, I don’t like being dependent on one storefront (sorry, Valve! but you know how it is). So I think, in 2020, I’d like us to be doing something ambitious and unusual on a larger scale. Though not this:

Not that.

… and in any case,let’s see how we do in Year 2 first.

Okay! That’s nearly it! Thanks for sitting through this incredibly long-ass post! I hope you found it useful! Any questions, best to ask me on Twitter, I always forget to read the comments.


ADDENDUM THE FIRST: There’s been a lot of ‘Lottie and me’ in this post, but I want to acknowledge everyone else who’s worked on Cultist this year. Claire Sharkey of Sharkbit has been handling marketing for the last two months, and has taken us in a bunch of really welcome new directions. Martin Nerurkar made the UI happen in the first place. Catherine Unger made it beautiful and gave us our key art. Clockwork Cuckoo (and Lottie) have turned out icon art like a jeweller on good drugs. Sarah Gordon did an astonishing job on our Tarot cards. Chris Payne has been tirelessly adding essential QoL features and filing down jagged edges since launch, with virtuoso versatility. Caolain Porter, who some of you will know as spacemarine9, provided essential design QA and insights that saved me from some horrible mistakes. Fraser McCormick has fixed the OSX and Linux issues that defeated me. Marc GagnĂ© sharpened my tools in a way I wish I’d had a year ago. Vanessa Williams did two absolute humdingers of trailers. Adele Cutting is my perpetual recommendation for SFX. Sheridans did the lawing and Chandler Wells did the accounting. Matt Hosty and Haley Uyrus gave us irreplaceable advice at essential moments. And Maribeth Solomon, with Brent Barkman and Micky Erbe, brought the music, and I hope Maribeth is immortal because I find it hard to imagine ever working with another composer.

ADDENDUM THE SECOND: I can’t really get through this post without talking about our community. The heart of their shadowy power is in the Discord, but on places like /r/weatherfactory and even the Steam forums that aren’t traditionally havens of kind intent, the conversation is courteous, intelligent and welcoming to newcomers. If that’s you, online or offline, if you’ve ever so much as turned to a stranger on a bus and said ‘this game is fucked up’, thank you. You’re why we make games.


ADDENDUM THE THIRD: if you want to know more about the design side of what happened the last year, I’ll be talking about Cultist development in much more detail at GDC. And if you’re at GDC, please feel free to ask me questions. I have only a very limited supply of answers, but I’ve been fortunate, and I always want to pay it forward where I can.

  1. As a hobbyist developer working on my first game in my spare time(basically the only development time I have would be considered crunch) I really appreciate your openness and the glimpse of what it would take to go full time.

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  4. Thanks for all the fantastic insight.

    Would you be able to detail, at least in a high level, that marketing campaign you did during launch week?

    I always wonder for 3rd party marketing teams how they go about and promote it after you already have the distributor and social media bases covered. SEO wizardary?

  5. Robert: nw! The last minute marketing expense was a burst campaign with Network N; we also paid ICO partners to do European press outreach.

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  8. I had no idea that you wouldn’t get a cut from the Humble Monthly sales—that is where I got the game from, and eventually got The Dancer too because I am loving the game—but at least for me I will say that enjoying this game so much means that I will definitely be jumping in on your next project(s). Also thanks for being open about the whole depression and workload bit. I’m struggling a lot with that personally right now and it’s good to be reminded that we are not alone. <3

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