They were also making 14-15K per month before that (it's mentioned in the post), so they were already extraordinarily successful as far as 2-person indie gamedev teams go.
As far as indie devs, yes, but in the greater scheme of things that is still fairly pittance money. $180k pre-tax split two ways, and then eaten into heartily by health insurance (Tarn and his brother have mentioned that medical issues are what pushed them to do the Steam release) doesn't leave a whole lot.
But that also means that as long as they don't significantly increase the cost of their lifestyle, that $7m pre-tax will go a very long way.
It sucks that their tax burden is going to be higher on account of making all this money in a single year, putting almost all of it in the highest brackets. Unless they did some clever accounting tricks throughout the 20 years to prepare for this situation, which I highly doubt they did.
I don't know where he lives, but in California it could easily add up to close to 50% since he's "rich".
As far as I know, they live in Washington state. Which should help with the tax on income at least a little bit, given the state has no income tax.
Still, yeah, having the entire amount being dropped on them in a single year will probably have pretty major federal income tax consequences. Hopefully, they will figure it out, and the sales of Dwarf Fortress on steam won't dwindle. I find that it is a pretty good timing for the release, given that Rimworld (the spiritual competitor) has gone extremely mainstream, so people are definitely more open these days to that type of games.
i'd thought the standard way would be to borrow heavily and invest in other financial assets. Then the interest payment would be paid out pre-tax, thus reducing your tax liabilities down to a manageable level.
The financial assets will return money in the future, but much more slowly, and get preferential tax treatment compared to direct income (such as long term capital gains tax discounts).
When you have $7mil in cash (and expectation of more in the future), there would be options not available to lower net worth people i suppose?
Looking at the numbers and releases I must say: If they had streamlined their release process to put out releases more often then the revenue might have been more even and better.
Yes and no. Possibly. Personally, I think their dedication to work on it in an artistic 'passion project' style is what made the game what it is. I suspect if they had followed a more regular schedule they would have gotten a more ordinary, and forgettable, indie game.
Maybe. Factorio does a great job of putting out releases and sharing details about what they are working on and you would have thought they were evil incarnate after they recently said they had to raise their price by $5 to keep up with inflation.
People are fickle and hindsight isnt always so clear.
I don’t know for sure but 3.5M lifetime sales times 30 is $105M*70% is $73.5M, they have around 30 employees, maybe they pay $200K a year, so that’s $36M over 6 years, netting them $37.5M. I could be way off though.
The game wasn't always at $30. I saw it for $20 a few years ago (regular price) and I believe it was even lower before, like $15, but I'm not sure.
There is also a Nintendo Switch release, so they will have to pay for the Dev-Kit's and licenses which are not cheap. Not as expensive as in the 80's, 90's, early 2000's where a single Dev-Kit could be six figures, but still a significant expense for a indie studio.
So we are already a little bit off from the numbers you posted. I assume, the 30% you cut off is for taxes. Good idea, but Steam and all other platforms where the game is sold also want a piece of the cake. I don't know the numbers for other platforms, but Steam takes 30% of the listed price.
So even with a $30 price tag on Steam, they get $21 after commission. An that is pre-tax... They need to buy hardware for their developers, rent an office, pay developers and so on. So even the founders are not getting rich. A "boring" job in business software can make you more.
Hard to say, working faster/harder doesn't usually mean the quality will remain unchanged, and their user base probably care more about the quality of releases rather than how fast they put out releases.
I'm not talking about working harder or faster, barely anyone could keep up with their attention and dedication to detail, I mean the release process that appears (from the outside in the eye of a webdev who merely does a git push and clicks a button some time later) to be rather crude shipping of the game. They didn't even use version control software 9 years back https://news.ycombinator.com/item?id=19381634
In my days we were sending them money via Paypal and if it was above a certain amout, then they'd kindly ask for your postal address, draw you a sketch (I have three, one of them with two dwarves in minecart jumping over a ravine, one of them has a beer in his hand) along with a button.
Yeah they used to have a PO Box you could mail checks/etc to. I still have it in my billpay. The only gaming value that has come even close for me has been Factorio.
