How much money does he have in order to make such a big donation? Has stardew valley made that much?
However, this is business income, not compensation, so it's taxed on a net basis, not a gross basis (even though it may still be included on his personal income tax return). This means his taxable income is the amount left after taking into account the retailer's fees, subcontractor costs, etc.
So, for example, if he made $100 selling games, $30 would go to the store. Assuming no expenses and overhead (since we have no data to come up with those numbers), the remaining $70 would be subject to tax. Assuming he lived in NYC, he would pay up to $36.26 in combined taxes (not taking into account the SALT deduction or the progressive tax rate calculation), for a post-tax net of at least $33.74. Assuming he lived in WA as other commenters note, he would pay up to $25.9 in federal taxes, for a post-tax net of no less than $44.1. (But note: Washington has an excise tax on businesses which is based on gross income...)
Generally, the Steam cut is considered “fair” for Indy devs. The benefits of steam (discoverability, massive audience) generate more sales. My Indy dev friends are not upset about the steam cut at all.
This, however, is one area where eventually Epic Games shines — they take a much lower cut and if they increase in popularity with gamers then steam might be forced to lower their share.
This is basically almost public information: 25% cut on earnings between $10 million and $50 million.
Yet most likely very big share of sales is well below $10 let alone $15 due to sales and regional pricing.
So yeah I doubt numbers anywhere close to those adverised.
> Generally, the Steam cut is considered “fair” for Indy devs. The benefits of steam (discoverability, massive audience) generate more sales. My Indy dev friends are not upset about the steam cut at all.
Steam no longer provide any discoverability on its own unless you either bring your own community ftom outside or spend $10,000-100,000 on marketing to gain wishlists.
If you're small 2-10 people indie gamedev studio and have external funding Valve will earn more from your game than you.
It's probably the big name studios who already have entire departments to do that kind of stuff that feel they're being ripped off.
It pays to be the middle man!
Truly? I believe he lives in Washington State. It's really HALF of his income?
Just checked, seems it's now 37% for the top federal bracket... for what it's worth, I think it's amoral to tax more than half of what someone makes, regardless of how much they make.
The only thing for developers they still do better than Google and Apple really is a few promotions throughout the year that target specific genres for released games developers can register for (whereas Google and Apple select the games they promote), and the "Next Fest" 3x a year for unreleased games.
They used to do stuff like "visibility rounds" that would reach 100,000s of people who didn't know about your game - the same feature today targets people who already wishlisted your game, so these days most developers have to put significant effort and money into promoting their Steam page on other channels like tiktok/youtube/reddit.
If you are an indie team that makes a 50GB game and has 50k players, distributing and update management would be a gargantuan task without Steam or something like it. 2.5 petabytes of bandwidth isn't cheap.
Yes what they do is profitable, I'm not saying that it isn't. But paying for what they do is (clearly) still more attractive to developers than rolling their own infrastructure to do the same.
There's a reason why everyone launches on Steam.
Everyone launches on Steam because they are an utterly-entrenched monopoly, all other PC game distribution channels are collectively a very small percent.
However, Valve has since removed most barriers to entry and these days Steam sees more than 350 releases every week (nearly 20k in 2025), a number that is constantly growing. Add to the fact that there are already more than 130,000 games on Steam, that every new release has to compete with, and it is no wonder that median sales are low:
The low barrier to entry means that a lot of crappy games being released on Steam, that were never going to sell a lot, and the actually good games have to compete with all the other good games on the platform, that are probably also being sold at a much greater discount than your newly released title
There's nothing preventing a game dev from selling exclusively on their own site. It's not as though Steam has exclusive access to Windows customers like the App/Play Store do on their platforms. Steam earns its customers and their trust and developers follow.
There's also the cost of selling through Steam / Google Play / Whatever - typically 30%.
I assume the developer has some professional expenses - an accountant at a minimum, probably a lawyer, certainly insurance. Maybe they also have a PR team, advertising, and the like. I don't know whether they pay for testers, translators, and things like that.
Then we get on to things like buying a new development machine, going to tech conferences, taking an educational course, backups, and all the other things that a business needs to spend on in order to be effective.
Maybe a profit margin of 10% is unrealistically low - but developing software has legitimate costs. The margin is never going to be 100%.
The video games industry is filled to the brim with gatekeepers who take their cuts. Valve takes 30%, just for their store. Publishers start at 10%. Your engine might take a cut.
Estimating that Stardew Valley, the big success video game with the lowest overhead bar none, has made 10% profit might be too low. 20%? Might be high.
For whom? The manufacture? It's closer to 10-30% for the manufacture (lower for white label goods, higher for "premium" brands). And it's higher for products that enjoy monopoly status.
For retailers, it's 2-3%, but retailers also get products on loan and negotiate various agreements that help cover the costs of displays, shipping, marketing, and wastage. So even that small percentage margin is skewed a bit.
There's a reason that retailers and food manufactures ("canned goods") were some of the largest American companies prior to technology taking off. It's a highly profitable industry.
Um, exactly the sort of numbers that you're providing. I'm baffled by the question or what possible relevance you thought it had here.
> 10% profit might be too low. 20%? Might be high.
You think an indie game like the one in question is making less on each copy sold than Valve is making on it? That's nuts. If the creator isn't clearing 50% on each marginal unit sold, then something is seriously wrong.
Who did that?
This thread seems to be filled with people who don't understand what marginal cost is.
I doubt its that high for Stardew Valley though. Simply because popular games are sold via network effect and people ususlly know what they buying.
Edit other games that come to mind: Hollow Knight: Silksong, Hades II, Schedule 1, and R.E.P.O.
More obvious examples: Minecraft, Terraria, Factorio were all indie studios as far as I am aware. Minecraft being one of the most successful games at 350 million copies sold.
Yes. It's incredibly rare. And suggesting otherwise is silly. Go ahead. Compare all the indie games released and see how often they succeed.
Sure, you can find successful ones, but you are ignoring those that do not succeed. There is a name for that, you know—survivorship bias.
At 10k new indie games a year, maybe a dozen gross over a million. A larger studio can't afford those kind of odds. That said, they should be able to make more games with a better focus on gameplay and a bit less on leading tech graphics.
Most indie games don’t sell for more than $10 USD, but let’s be generous and say you manage to convince your audience to pay $20.
Total: 200,000 USD
After Steam Cut: 140,000 USD
Could you work on the game part-time while holding down a full-time job? Sure, but you've got to have some iron stamina to want to sit in front of a computer for another 4 hours after a full day of work. Furthermore, not being able to focus on the game means dev might take significantly longer.
Source: https://app.sensortower.com/vgi/insights/article/video-game-...
In addition, a large fraction of those 8 % were probably games by AAA studios, so your chances as an indie dev are even lower.
There are thousands of new games each year. The handful lucky outstanding low-budget games won't put anyone to shame.
> There's an uptick in indie devs that have broken through the barriers with good gameplay despite the graphics not being AAA quality.
Don't confuse indie with AAA. Indie is about control, AAA about budget. There is usually a correlation between control and budget, but there are also many long-running indie-devs with good budget now. Supergiant, who made Hades 2 for example, are such an AA(A)-Indie.
> Edit other games that come to mind: Hollow Knight: Silksong, Hades II, Schedule 1, and R.E.P.O. > More obvious examples: Minecraft, Terraria, Factorio were all indie studios as far as I am aware. Minecraft being one of the most successful games at 350 million copies sold.
Those are long-running, genre-defining games, which also received a good budget over the years. Many of them are in the realm of AA, probably AAA now. Those are naturally grown services-games which could grow from success to become even more successful. Big studies tried to emulate this in the last years, but ultimately failed big in most cases.
The general problem is, the bigger your budget, the bigger the anxiety, leading to more control, conservative micromanaging and throwing every shit into the game to cater as much people as possible, which in high numbers cannibalizes the market eventually. Low-budgets can take on more risks, focus on their gaming-mechanisms and don't have to sell big. Making small money to cover your costs is already good enough, and they all can always explode by luck if they get their marketing right.
Games like Schedule 1 or R.E.P.O. don't have to offer 100h+ of fancy fun and high level entertainment. People are happy if they can get their 10+ hours of fun out of it, because they didn't waste big money on it anyway. So you will always see cheap games occasionally explode for a short while, while everyone is waiting for the big games going on sale, especially when the cheap games are coming with a social aspect.
I’m really not sure what it is. Usually, when a company begins to abandon/shaft their user base like that, it’s because they found a more lucrative market to chase instead.
Go for it, but most will not achieve a similar outcome.
If you can take the chance and want to, do it. I just recommend having a backup plan.
Sure, take your shot, but it is unreasonable to think that many people have the opportunity to drop everything for a five year vision quest, hoping to come out the other side a financial success.
(To be clear, Stardew Valley is a great game. But "making a breakout indie game" really does feel akin to winning the lottery to me, even if the game is fundamentally great.)
If you want to create indie games—and you can make it work without quitting your day job—go for it! But I don't think it would be smart for EA or Ubisoft to, like, stop making big-budget games and make indie games instead. If you can make a breakout hit, you can make a huge profit—but you have to make a breakout hit, and that comes down to a lot of luck.
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Now, I do think it would make sense for EA/Ubisoft to try more mid-budget releases, which explore something new instead of continuing a 10+ year franchise. A lot of them will fail, but if a few are extremely successful, they could make up for the failures. It kind of felt like the publishers were doing this for a while (Grow Home, Little Nightmares) but my sense is that it has kind of stopped? Although caveat, I also haven't been following gaming as closely as I once did.
I think the problem comes from marketing budgets. For any given game a marketing budget can push some amount of sales, but applying a marketing budget to each game makes it much harder for the winners to make up losses on the rest.
Small releases also need to be 'lean' releases; management overhead is another cost that's hard to make up in scale.
Combined, large developers don't have any natural advantage at making small to mid-scale games, and their structures impose fixed costs that are hard to avoid. It would almost be better for large developers to get indie-scale games by funding partners who act outside of the corporate structure, but anybody can do that.
Hearthstone (Blizzard) is another rare exception of an indie-scale, in-house game that was a breakout hit that could not have come from the outside (because of the IP involved), but even that existed because it started as a "closet-scale" project with senior developers who insulated themselves from management pressures.
> Combined, large developers don't have any natural advantage at making small to mid-scale games, and their structures impose fixed costs that are hard to avoid. It would almost be better for large developers to get indie-scale games by funding partners who act outside of the corporate structure, but anybody can do that.
The advantage would be funding. I love indie games but I do get tired of 2D pixel art. With just a bit more money—still an order of magnitude less than Call of Duty, mind you—the possibilities really expand.
I started playing Psychonauts 2 this week, and I think it's such an incredible game—and a great example of what can happen when an "indie" developer manages to secure a real budget. (I don't know if Double Fine is indie, but their games contain the sort of outside-the-box thinking I associate with indies.)
Perhaps some sort of YCombinator-esque model could actually work here.
Absolutely. People tend to assume that 95% of video games turn a profit, when it's the reverse. There are highly polished, incredibly high quality video games who simply just don't sell.