In the latest blog postdiscoverability guru Simon Carless explains how developers’ or publishers’ net income compares to what gamers actually spend on the game.
The TL version; DR of the post is that if your title made $1 million on Steam, you’ll actually only see a little over $500,000.
Here is a list of deductions that occur on gross earnings en route to the developer’s pockets.
- VAT and sales tax payments. Many countries require Steam to pay them sales tax usually between 10% and 20%.
- Steam revenue share. Steam takes an additional 30% of your gross revenue.
- Then there is Society taxes (20% in the UK, for example) and, especially for all non-US developers, exchange fee.
Additionally, Steam refund policy could further reduce your income. Reviewing titles published by No More Robots, Carless found that “the average monthly redemption rate per unit across the entire portfolio ranged between 5% and 8%.” Commenting on the reimbursement rate, Carless highlights the following considerations:
- In some countries, the reimbursement rate is inherently lower or higher. China, for example, tends to have a higher Steam refund rate.
- Making a good game and above all making a good first impression is a good way to minimize refunds.
- Niche games tend to have loyal fan communities that are less likely to pay back.
Basically, net income is about 55% of what your game brought in. In confirmation of Carless’s calculations, eastshade Developer Danny Weinbaum said that “across all platforms, we’ve made around $2 million since launch. This translates to approximately 1.1 million post-platform net.