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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

#171

Post by eatsyourtacos »

tverbeure wrote: post #117
gizmo wrote: post #101

Earlier quoted context omitted.

They are smart which is why they are spending their lives working on something they love instead of worrying about tax optimization nonsense.

There’s a major contradiction in here. I’m sure you’ll agree that it’d be mindblowingly dumb to not set some kind of company for a bunch of reasons? (Eg limited liability) And that you best leave accounting and tax filings to professionals so that you can spend your precious time on something you love instead? OP’s suggestion automatically flows from that…

>There’s a major contradiction in here.

I don't think there is. I wholeheartedly agree with the prior sentiment. Way too much of peoples lives are spent on shit that does not really matter. As a people we have overcomplicated the shit out of everything to such a degree it's disgusting. And it's all based on greed. Optimize this structure to pay the least tax, optimize your income into this and that so it magically makes more money. Meanwhile those without any real money can't take advantage of any of that kind of stuff. Yeah, really fair!

Not everyone subscribes to the financial bullshit the wealth class has created.

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

#172

Post by mort96 »

endominus wrote: post #153
mort96 wrote: post #137

Earlier quoted context omitted.

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 The individual median net income was $19k around 2005-2006, maybe they were just using outdated numbers?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 est…

The graph would be consistent with the part you quoted if the median earners were paying 33.5% tax: 41535 - (41535 * 0.335) is roughly the 27598 figure it shows for 2020. The figure only shows state and federal income tax, which adds up to 13% tax; I don't know enough about the US to now if there are other taxes which would add up to 33.5%.

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

#173

Post by bombcar »

wongarsu wrote: post #92
2Gkashmiri wrote: post #52

Earlier quoted context omitted.

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,…

IIRC some of the types of corps (S-corp, the one that is NOT a corporate veil) lets you pass-through income and so you get hit by only one "tax".

But you still have state taxes and other such things. I assume they've retained a tax guy before this.

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

#174

Post by bovermyer »

Mengkudulangsat wrote: post #112
bovermyer wrote: post #29

Earlier quoted context omitted.

I disagree vehemently and violently with this suggestion. Dwarf Fortress's charm results from human-crafted procedures interacting in unexpected and fascinating ways. If ChatGPT (or other AI bullshit generators) were used instead, it would change the experience entirely.

You gotta admit DFs name / description generation is just gobbledygook most of the time. Tastefully applied, AI bullshit generators will do wonders to readability.

Yes, it's janky - but I _like_ the jankiness.

Not everything needs to be perfectly formatted with ideal flow and Hemingway-esque readability.

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

#175

Post by bombcar »

mperham wrote: post #160
komali2 wrote: post #69

Earlier quoted context omitted.

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 h…

Sketchy dudes talk about it but can't actually provide solid examples and numbers that don't involve things like "invest all your profits in a failed startup so that it's all a business expense".

Look at the actual income tax paid by professional athletes; if anyone knew how to do it it would be them.

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

#176

Post by s1artibartfast »

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…

I think this would be difficult to do without tax fraud. You cant retroactively increase your salary to show you were owed more money for unpaid salary.

If they had money in a C-corp to start with, you could run it at a loss (actually paying the salary), and then carry forward those losses to offset the windfall.

With an S-corp, Each year the company ran a loss, they would receive a negative dividend which would adjust their annual earnings down.

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

#177

Post by eatsyourtacos »

moffkalast wrote: post #103
huhtenberg wrote: post #32

That's post-Steam-fees and pre-taxes. Irrespective of that - good for them, well-deserved IMO.

I wonder if they had a different agreement than standard or Steam just cashed out something north of $3 million from this alone. It's true what they say: Valve used to make games, now they make money.

>Valve used to make games, now they make money

You can say that, but really what they moved to is creating a platform that saved PC gaming. I can't imagine where we would be at without Steam.

There would be 20 different platforms we would have to install full of bloatware garbage and everything would be horrific as all fuck. Indie games would be having a much harder time, because sure there would be other things out there but again it would be so split that it would be hard to even hear of games to get traction. PC game prices are a damn steal, which helps everyone because at $15-20 I will buy way more than $50-$60 a pop. Every platform would have it's own bullshit DRM that would make things a nightmare.

Steam allows offline play, family sharing.. it just freakin works without being fancy bullshit.

So yeah, they certainly make money. But I can't thank them enough for what they have done.

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

#178

Post by sempron64 »

PragmaticPulp wrote: post #139
account42 wrote: post #116

Earlier quoted context omitted.

Pretty sure GP is talking about net income.

That would require greater than 50% taxation, which isn’t realistic at all in the United States. The federal income tax rates for lower income brackets reach 0%. State, sales, payroll, and other taxes aren’t going to come anywhere near 50%. The real, net, median income in the United States is significantly higher than what the OP quoted.

The top federal income tax bracket is 37% and the top California tax bracket is 12.2%. This is for income exceeding 500k. So disregarding local taxes and property taxes, in California most of this income would be taxed at 49.2%.

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

#179

Post by endominus »

mort96 wrote: post #172
endominus wrote: post #153

Earlier quoted context omitted.

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 est…

The graph would be consistent with the part you quoted if the median earners were paying 33.5% tax: 41535 - (41535 * 0.335) is roughly the 27598 figure it shows for 2020. The figure only shows state and federal income tax, which adds up to 13% tax; I don't know enough about the US to now if there are other taxes which would add up to 33.5%.

The graph includes state, federal, and payroll tax. They're stacked above the income after tax. They do not add up to $41,535.

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

#180

Post by paulluuk »

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)…

I quickly grabbed the numbers from https://en.wikipedia.org/wiki/Personal_income_in_the_United_..., where I just copied the number from the "W-2 Median Wages" graph, however I have no idea what W-2 is so that might explain why so many people are saying I'm wrong. Also I used "real wages" which seems to be corrected for inflation rather than the actual numbers.
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