Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bay 12 Games has made $7M from the Steam release of Dwarf Fortress

bay12forums.com

Post reply on HN
Print view View original

91–100 of 322 posts

Re: Bay 12 Games has made $7M from the Steam release of Dwarf Fortress

#91

Post by eps »

program_whiz wrote: post #65

Glad to see this, because they have worked long and hard on this game. For the optimistic, divide ~$4m (post-tax) by team of 2 for ~20 years (they started work in 2002). They've made some money in the meantime obviously, but seeing the final profit doesn't accurately capture the overall investment. Just in case you were thinking of quitting your day job to become an overnight millionaire making indie games.

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.

Re: Bay 12 Games has made $7M from the Steam release of Dwarf Fortress

#92

Post by wongarsu »

2Gkashmiri wrote: post #52
fragmede wrote: post #39

Earlier quoted context omitted.

What ways are you thinking of? They could have incorporated and posted losses for 2? straight years before the IRS started auditing; those losses could have been deducted against this revenue. What other angles are there?

can't they book expenses? income taxes are to be paid on "net profit" and not gross receipts, right? how can you pay half of revenue as taxes? this assumes tax rate is 50% and there are no expenses?

If we assume their previous income was covering their expenses (a reasonable assumption for a 18 year old company), the $7M from Steam would be pure profit.

Now I'm not sure about Washington (?) tax rates, but just for comparison: in Germany you would have paid about 35% taxes on company profits, and another 20% income/capital gains taxes if you just pay it all out to the owners. Not that this is the smartest choice, at that point you play games like keeping money in the company to spend on a company car. But if you don't care about optimizing your taxes 50% doesn't seem unreasonable.

Re: Bay 12 Games has made $7M from the Steam release of Dwarf Fortress

#93

Post by davedx »

paulluuk wrote: post #82
program_whiz wrote: post #65

Glad to see this, because they have worked long and hard on this game. For the optimistic, divide ~$4m (post-tax) by team of 2 for ~20 years (they started work in 2002). They've made some money in the meantime obviously, but seeing the final profit doesn't accurately capture the overall investment. Just in case you were thinking of quitting your day job to become an overnight millionaire making indie games.

> divide ~$4m (post-tax) by team of 2 for ~20 years So about $100k per year, per person (after taxes) I know that this is nothing out in Silicon Valley, but for reference, the median income in the US is $19k (net) per year, and about $15k (net) per year in Europe (if you include eastern Europe). I can't tell from your comment whether you feel 100k is high (hence the "optimistic") or low (hence the warning at the end)…

> the median income in the US is $19k (net) per year

It's way higher, between $50-70k https://www.census.gov/library/publications/2022/demo/p60-27...

Re: Bay 12 Games has made $7M from the Steam release of Dwarf Fortress

#94

Post by wongarsu »

komali2 wrote: post #69
MagicMoonlight wrote: post #51

Earlier quoted context omitted.

They made 7m in personal income in one month, how would that not be normal

It implies a near 50% tax rate, anywhere in the usa, even California, that seems really high.

If they use the money to fund retirement they potentially pay taxes twice: once on company profits, and once for the natural person who gets the money.

Re: Bay 12 Games has made $7M from the Steam release of Dwarf Fortress

#95

Post by db48x »

komali2 wrote: post #69
MagicMoonlight wrote: post #51

Earlier quoted context omitted.

They made 7m in personal income in one month, how would that not be normal

It implies a near 50% tax rate, anywhere in the usa, even California, that seems really high.

As an estimate, it will do the job. It’ll be wrong, but not horribly wrong, and if you had a windfall like that then planning based on a conservative estimate is a good idea. If you estimate your taxes high, then you get a pleasant surprise when your accountant actually crunches the numbers.

Re: Bay 12 Games has made $7M from the Steam release of Dwarf Fortress

#97

Post by db48x »

SXX wrote: post #67
somenameforme wrote: post #55

Earlier quoted context omitted.

Most games are developed, a bit of effort/money directed on promotion/marketing, dropped, and then onto the next project. So I think these numbers are more of a reflection of developer than consumer trends. Games that are developed in a different way often show [very] different trends. One of the most extreme examples I can think of is Kenshi. Its SteamDB [1] numbers are something else! It was made by one guy who wor…

As indie game dev myself I totally agree with you, but while DF is special it still had usual marketing compaign and that big release date. My guess it will likely perform even worse than projection since a lot of people who played DF for years bought it more like a donation. E.g more of people who bought it wont actually play it much and game will game less of natural social marketing out of these sales. Again I not…

I can see them earning another $7M over the next 20 years though.

Re: Bay 12 Games has made $7M from the Steam release of Dwarf Fortress

#98

Post by enkid »

paulluuk wrote: post #82
program_whiz wrote: post #65

Glad to see this, because they have worked long and hard on this game. For the optimistic, divide ~$4m (post-tax) by team of 2 for ~20 years (they started work in 2002). They've made some money in the meantime obviously, but seeing the final profit doesn't accurately capture the overall investment. Just in case you were thinking of quitting your day job to become an overnight millionaire making indie games.

> divide ~$4m (post-tax) by team of 2 for ~20 years So about $100k per year, per person (after taxes) I know that this is nothing out in Silicon Valley, but for reference, the median income in the US is $19k (net) per year, and about $15k (net) per year in Europe (if you include eastern Europe). I can't tell from your comment whether you feel 100k is high (hence the "optimistic") or low (hence the warning at the end)…

Where are you getting $19k per year as the median income?

Re: Bay 12 Games has made $7M from the Steam release of Dwarf Fortress

#99

Post by rtkwe »

davedx wrote: post #93
paulluuk wrote: post #82

Earlier quoted context omitted.

> divide ~$4m (post-tax) by team of 2 for ~20 years So about $100k per year, per person (after taxes) I know that this is nothing out in Silicon Valley, but for reference, the median income in the US is $19k (net) per year, and about $15k (net) per year in Europe (if you include eastern Europe). I can't tell from your comment whether you feel 100k is high (hence the "optimistic") or low (hence the warning at the end)…

> the median income in the US is $19k (net) per year It's way higher, between $50-70k https://www.census.gov/library/publications/2022/demo/p60-27...

You're looking at the median HOUSEHOLD income. So on average the wages of two people, median income is a bit below half of that at 31k (pre tax I think).

Re: Bay 12 Games has made $7M from the Steam release of Dwarf Fortress

#100

Post by aliqot »

nevi-me wrote: post #75
kybernetyk wrote: post #70

Earlier quoted context omitted.

What expenses would they have realistically? 2 PCs? if you mean their salary that still would be taxable at their personal income tax rate.

Yes, I'm merely saying that one can't derive the tax from the $7m without considering expenses. Salaries being taxable at the employees' rate doesn't make it invalid.

plus Steam's cut I'd imagine.
Post reply on HN