Iron Tower Studio – Taking Care of Business

In this official forums post filled with numbers and stats, Iron Tower Studio’s Vince D. Weller explains in great detail what it’s like to be an independent RPG developer in the current market. As you may have imagined, it’s not all sunshines and rainbows – the hardcore RPG niche is not particularly huge, discounts and regional pricing is a big old confusing mess, crowdfunding is not all that it’s cracked up to be, and for whatever reason, it’s pretty much impossible to get people to buy sequels and expansions. An excerpt:

Even though we worked on our first game for more than 10 years (mainly due to inexperience and working part-time), I count 2016 as Year One. Before that we were a Fellowship (of the RPG) and now we’re a Business with multiple revenue streams. In a Fellowship, hoping for the best is a sound business strategy: you’re working on your first game and hope it will do well. Then the game is out, it does great (meaning it doesn’t fail outright, which is as great as it gets these days, especially if you’re an indie with a shoestring budget), your Fellowship gets upgraded into a Business, gets its own IRS number, and you face an existential question that has plagued mankind ever since we crawled out of caves:

Now what?

The goal is to make more RPGs, of course, but:

• We’ll work full-time from now on, meaning we’ll have to rely on the first game’s revenues to pay for the second game’s development. We’ll make the second game twice as fast, but twice as fast still means 4-5 years, which sounds about right considering that full-scale RPGs take 3-4 years for proper studios with proper budgets, which means that:
• We’ll have to boost our revenues with a short-term project (expansion or spin-off), which means that we’ll have to make a small-scale game that sells. Easier said than done these days.
• Our second full-scale RPG should be different enough to dodge the dreadful ‘more of the same’ stigma while keeping the design core intact, be better than the first one (meaning the design flaws must be fixed and the design core expanded), AND sell more than the first one. Now that we figured out what we want, all we need is a genie to grant us these 3 wishes.

To chart through these treacherous waters, we need to know what works and what doesn’t (aka a frame of reference when it comes to business decisions). Unfortunately, such info isn’t really available, so indie developers have no choice but to sail without maps or compass, doomed to learn from their own mistakes in an industry where your first mistake might be your last. Thus we turn to SteamSpy’s data and achievements, reading them the way people used to read the tea leaves and entrails (and just as accurately).

Essentially, this article is part 1 of our business diary to be posted over the years. Hopefully, someone might find it interesting. Ideally, other developers will share their own stories and contribute to the indie knowledge base.

The Age of Decadence (our first full-scale RPG)

We released it in Oct 2015 and I’m happy to report it’s still selling and still being mentioned favorably here and there (which is why it’s still selling, I assume). We’ve sold 126,295 copies to-date at an average rate of $13.51 per copy. The price reflects not just the discounts during the sale events but the regional pricing as well, which is an equally strong factor.

Year by year it goes something like this:

• 2013-2014 (Early Access & Direct Pre-Orders): 13,124 copies – $320,157 – $24.39 avg.
• 2015: 20,771 – $472,869 – $22.76
• 2016 48,798 – $620,914 – $12.72 (50% discount is introduced in March)
• 2017 43,808 – $293,714 – $6.70 (75% off on sale events throughout the year)

The moral of this story is twofold:

First, the number of copies sold never tells you the full picture. In 2017 we sold twice as many copies as in 2015 and almost the same as in 2016 but got less than half of 2016’s revenue.

Second, 95% of what you sell is sold during the sale events so your sale price (lowered further by the regional pricing) becomes your effective price during that year. It’s also worth noting the increase of copies sold as we increased the discounts. 73% of copies were sold at 50-75% off.

In January 2018 we reduced the price from $29.99 to $19.99 to boost non-sale sales and mainly to see what happens (i.e. gather more data).