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

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

#151

Post by Dudeman112 »

kilgnad wrote: post #84
mlindner wrote: post #62

Earlier quoted context omitted.

I'm not sure if you can call Brothers Grimm version "canonical" as from my understanding all they did was document in writing single versions of already well known folk tales that were carried through generations by oral memory. Many of which had many different versions depending on who told the story. So I'm not sure you can use the word "canonical" in this case.

Its possible it still fits the word. The bible is canonical too even though it's basically a pieces of disparate texts. Basically if it's the first and earliest record and the one that everyone looks to as the most accurate source it's canonical.

The whole idea of caring about "canon" is fundamentally bollocks anyway when it comes to stories

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

#152

Post by ch4s3 »

CydeWeys wrote: post #105
enkid wrote: post #98

Earlier quoted context omitted.

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

They said median net income, i.e. post-tax.

As others pointed out, that just can’t possibly be correct given the median pre-tax number and actual US tax rates. If you made the median individual income of $45k and lived in a high tax state like California, your net would be ~$37k.

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

#153

Post by endominus »

mort96 wrote: post #137
HEmanZ wrote: post #107

Earlier quoted context omitted.

So much depends on how you measure it. But median individual income in the US is quite a bit higher than 19k no matter how you measure it. Real, adjusted, individual including non working and part-time population above 15yo: $38k/yr Including only full-time workers: $57k Median household income: $71k The US has enough problems, no need to make up much smaller income numbers than the reality. https://fred.stlouisfed.o…

I found this figure: https://upload.wikimedia.org/wikipedia/commons/b/bc/Median_p... (from https://en.wikipedia.org/wiki/Personal_income_in_the_United_... ). The individual median net income was $19k around 2005-2006, maybe they were just using outdated numbers? Or it could've been a typo or misreading, as the current median net income is $29k. In any case, their point still stands with the $29k figure.

The first paragraph of that Wikipedia page: "Personal income is an individual's total earnings from wages, investment interest, and other sources. The Bureau of Labor Statistics reported a median weekly personal income of $1,037 for full-time workers in Q1 2022. For the year 2020, the U.S. Census Bureau estimates that the median annual earnings for all workers (aged 15 and over) was $41,535; and more specifically estimates that median annual earnings for those who worked full-time, year round, was $56,287."

That graph seems to be just incorrect. All three of the links it's supposedly sourced from don't have it on their pages. There is a remark of "own work," so I think a Wikipedian assembled it themself. Given that it frankly contradicts the article it's in, I would assume that it's in error.

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

#154

Post by jermaustin1 »

christkv wrote: post #89
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.

If they are smart the money will be taken out as dividend and thus only pay capital gains tax.

Dividends are not automatically treated as capital gains, but in this situation, its possible they would be considered "qualified". The company being formed in the US, the dividends being paid out to US share holders, and the shareholders holding the stock for at least 60 days (120 days in some circumstances).

This really only applies to C-Corps as well, and then you run into the Double Taxation of C-Corp income and pay a 21% tax rate at the corporation, then additional capital gains on the dividend income.

BUT dividends would be tax free up to around $80k of income (any income (salaries, 1099, etc., also assuming married), then they would be taxed at 15% - 25% above that, but do not forget, the corporation has already paid 21%.

So optimizing for qualified-dividend-only income requires a LOT of forethought, and either accepting a lower income (since the benefit maxes out at $80k total income), or paying 15-25% + 21% for a 36-46% tax rate on your dividends.

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

#155

Post by poulpy123 »

criley2 wrote: post #108
rob74 wrote: post #79

Earlier quoted context omitted.

OTOH, if they would have asked money for it from the beginning, it may never have gotten as far as it did. The market for a commercial game with text graphics was pretty small even back in 2006...

Minecraft released in 2009 with a price of $13 a copy. How'd that work out for them? I am a bit older as a gamer so to hear that "2006 the market was small" is crazy to me! I grew up playing MUDs and believe me, the market for text games in 2006 was a lot bigger than it is today! From my perspective, monetizing the kids from the 80s/90s who loved text games with the best text game of all time as they turn 20s and 30s…

1/ they obviously didn't do it for the money 2/ Minecraft is an extreme outlier 3/ how many 2006 games with ASCII interface and costing have been successful ?

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

#156

Post by jermaustin1 »

ethbr0 wrote: post #111
christkv wrote: post #89

Earlier quoted context omitted.

If they are smart the money will be taken out as dividend and thus only pay capital gains tax.

Out of curiosity, are there tax options (specifically, retroactive ones) for this situation? As near as I know: (1) they formed a company at some point in the past (S-corp?), (2) they did constant work per year, (3) they had some donations per year, (4) they suddenly had a large amount of revenue in 2022 I'm guessing they didn't fully account for their time/expenses in prior years. If they didn't, are there options t…

IANAA, but I pay one every year.

S-Corp is not an efficient entity type for a windfall like this. It is a pass through entity, and cannot retain earnings year over year, for that you need a C-Corp.

That said, had they already had a C-Corp set up, then this income would be taxed at 21%, so after Steam fees and taxes, they would be sitting on around $3.3M (not counting publisher fees and any expenses that might arise). If they hold that money for 120 days, they can then do regular monthly dividend distributions of around $7k, and it would be considered tax free to their person (assuming married, and no other source of income), but keep in mind they already paid 21% taxes on it. Any amount above that would be taxed at 15% (then 20% at top tax bracket), so if they wanted $200k/yr, that would be a monthly dividend of around $17k, 7k of that is "tax free" then the other 10k would be taxed at 15%. But again, they pre-paid 21% taxes at the c-corp level, so 15% would actually be 36%, which is nearly top tax bracket already, and it was hit MUCH sooner than if you took a higher paid salary.

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

#157

Post by poulpy123 »

kirushik wrote: post #71
Archelaos wrote: post #28

> The fairytale ending is reality, but you didn’t kiss the toad. Some philological pedantery: In the canonical Brothers Grimm version of The Frog Prince, the frog does not turn into a prince when kissed but when smashed against a wall.

Grimmsc version is a bit weird then, because there is a plausibly-sounding "freundian" interpretation of the most common folklore version, in which a frog turning into a prince after being kissed is a thinly veiled metaphor for fellatio. That said, in the most common Russian folk version it's *Princess* Frog (Царевна Лягушка), and the metaphor is not working that well once again.

How is it even remotely plausible ?

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

#158

Post by dmarchand90 »

eps wrote: post #91
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.

Yeah but they were not making that much the whole time. If you look back some years they were just scraping by.

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

#159

Post by xipho »

mikrl wrote: post #136
criley2 wrote: post #106

Earlier quoted context omitted.

We are in a post-Minecraft world, so I don't think your criticism has any merit. Minecraft was a sandbox single-dev game that broke every mold and trope, and sold for $4 billion. Me claiming that DF could be worth $100M in a world where Minecraft was worth $4B and is likely worth much more now... not a crazy take.

Minecraft is also stupidly accessible. The only dwarf fortress players I know IRL are also skilled with and interested in computers. Normies aren’t sinking 6 weeks (what it took me) to ramp up on DF, and certainly wouldn’t have in 2013

> stupidly accessible

Don't underestimate what tiles do for a game in terms of (perceived) accessibility. Anecdotally my kids (under 11), who will almost certainly abandon the game after playing it, are demanding that we get it because they like what they are seeing, they like drama (dwarfs into zombies), they like building and crafting (infinite possibilities vs. MC). Now it's true that I've been talking about it, so they are feeding on my hype, but they are also genuinely intrigued by it. I think the viral potential of DF went way up with the recent release, it might not be completely unheard of as common amongst the broader gaming populace in the future.

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

#160

Post by mperham »

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 you add up all of the jurisdictional taxes, 50% is typical for high earners. For instance I pay 38% fed and 10% state here in Oregon.

Sketchy dudes will talk about various schemes to lower taxes but call it what it is: unethical tax avoidance. The real issue we should be talking about in the US is how poorly we use that tax income. Our built environment is absolutely dreadful because of our car dependency and we have little to no social benefits despite having massive tax income because our health care system is parasitic.

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