Indie games refer to video games that are produced by small teams of developers without the backing of a major game publisher. As of 2022, the whole video gaming industry is worth an estimated $196.92 Billion. And since 2021, Indie games have gone from making up 13% of the market to 17% in 2022. The question is, How profitable are Indie Games?
According to Steam Analytics, 70% of indie games released on Steam made less than $5,000. For many indie developers, this is not enough to recoup their initial development costs.
If these statistics aren’t enough to scare you away from indie development, let’s go deeper.
How Did We Get Here?
Prior to the advent of independent game developers, devs needed publishers to fund, market, and distribute their games. The benefit of this relationship for developers was that they were guaranteed a decent paycheck. But it came at a cost, with developers not having ownership of their work or creative control.
Today, there are many indie game developers who carry out all the phases in the development and distribution of their games. But this isn’t an easy feat, and many indie games fail to become successful. In fact, we wrote a blog covering the top reasons indie games fail.
Nonetheless, this shouldn’t deter you from developing your game or being optimistic about it being a success. There are numerous success stories for indie games, and yours could be one.
What Profit Can An Indie Game Expect To Make?
According to 2021 Steam statistics, 40% of game units sold on the platform are indie games. This shows there is high demand for indie games. But, these sales don’t always result in a high-profit margin.
| Gross Revenue | Number of Games | As Percentage |
|---|---|---|
| < $5k | 58,637 | 70.2% |
| $5-10k | 6,646 | 5.56% |
| $10-50k | 8,306 | 9.94% |
| $50-200k | 5,095 | 6.1% |
| $200k-1m | 3,734 | 4.47% |
| $1m+ | 3,111 | 3.72% |
Seeing that 70% of indie games on steam failed to make more than $5k is pretty intimidating as an indie developer.
Although, let’s be honest, there is a lot of low-quality content on Steam. Think of all the clones, asset flips, and really low-quality projects that maybe shouldn’t have been released. That’s most of this what lives in this price bracket. The remaining items that are actually good games but have been overlooked probably failed because of poor marketing or no marketing at all.
Having said that, the games sitting in the financial success category are in the minority. Only 8% of developers earn more than $200k from their games. Bearing in mind that this does not account for Steam’s 30% cut or refunds or all the tax you’ll need to pay on that income.
Once we get to the very top earners, the 3.72% making over 1 Million, these are the developers who’ve “made it” – they’ve risen to the top of the indie games industry. Most of these games will not be solo projects but born from the efforts of a small team of developers and artists working together.
Can Indie Developers Increase Profits?
Indie game developers come in all shapes and sizes, as do their games. But how do you become a top developer making over a million dollars? Well, as this article from VGInsites points out, “Top developers don’t give up and keep publishing games.”
| Developer Category | Average revenue per game | Average number of games released |
|---|---|---|
| The Learner | $294 | 1.1 |
| The Hobbyist | $2,275 | 1.6 |
| The Indie | $14,999 | 2.4 |
| The Full-timer | $111,172 | 3.0 |
| The Success Story | $3,655,808 | 4.5 |
It stands to reason that the more chances developers take putting their games out into the world, the more successful they will become over time. And the data backs this hypothesis up.
Final Thoughts
If you’re an Indie Developer reading this, you should be less worried about how profitable indie games are and focus more on building a great game and having an even better marketing strategy. Oftentimes, the difference between a profitable indie game and an unprofitable one is marketing.