How much money do Steam games make?

Hi, I’m Karl Kontus, one of the creators of a free games market research platform Video Game Insights. In this article, I will look into how much money do Steam games make? How much revenue Steam games have generated over their lifetime – is it really as low as we’ve anecdotally heard? I’m going to cover all Steam games, then dig into indie games in particular and look at how it changes by genre.

Revenue distribution for Steam games

The Indie game industry is well known for being a challenging and often not financially rewarding. It’s incredibly competitive and has historically lacked mainstream demand from casual gamers. More than that, most indie dev teams aren’t well rounded and set out to succeed. The developers are very often not devoting enough time to the business and marketing side of indie development. The low marketing budget and often lack of time put into marketing leads to potential players never hearing about the otherwise good games. This article explores if we can see and back this with data. I am looking at c. 31,000 Steam games when doing this analysis. I explain my methodologies in the end of the article. I’ve then allocated these games into percentiles based on sales and summarised it in the graph below.

How much money do Steam games make?

Take-aways:

Bottom 13% of Steam games are free.
14% of paid games have earned less than $1,000 in their lifetime.
Almost half of Steam games have never made more than $5,000.
Only 25% of the games have made more than $50,000.
Top 10% of games or c. 3,100 games on Steam have made more than $430,000. We’re now getting into really successful indie game and AA and AAA games territory.
The top 1% of Steam games make more than $25,000,000 per game on Steam alone.

Revenue expectations on self-published indie games

The insight above gives a good overview of how brutal the game industry is and how rewarding it can be to be the top 1%. However, it also includes the AA and AAA games with $100m budgets on development and marketing. I wanted to see how this looks when we only look at self-published indie games. This reduces our sample size to c. 21,000 games. The shape of the curve remains very similar, but the scale has changed drastically. Bottom 50% now make less than $4,000 rather than $5,000 per game. Top 25% of self-published indie games revenue expectations have almost halved to $26,000. You’ll have to be in the top quartile if you want to make more than that as an indie dev. Top 14 % – This is the threshold of crossing $100k gross revenue line. C. 3,000 self-published indie games have made over $100k gross revenue on Steam. That’s a bigger number than I thought. Steam is 17 years old, but the majority of games have been posted in the last 5-6 years. That’s around 500 indie games per year that cross $100k mark. Not bad. Top 10% earn more than $187,000 The top 1% of indie games have earned more than $7,000,000. That’s c. 200 self-published indie games that have made it. These are mega popular games like Subnautica and Rimworld that have made well over a $100m in revenue as well as games like Plague Inc, Don’t Starve, Orcs Must Die! 2, etc that have still made tens of millions of dollars each. They’re very rarely teams of less than 5, but almost always teams of less than 40 people. This is more than $175,000 per employee, in some cases millions of dollars per employee. To learn more about revenue potential of different games, visit our free platform.

Do earnings differ by game genre?

Looking at the revenue distribution by genre shows some interesting patterns. A lot of MMO games (eg Paths of Exile) are free to play, so their revenue is not estimated in this case. Casual games also make most of their revenue from in-app purchases and are priced very low, often $0.99. When looking at more standard revenue model genres, RPG, simulation and strategy games are the highest earning for indie categories. Even in the RPG genre, with the highest proportion of high earning games, only about 30% of the games make $50,000 or more and over half of the games never make more than $10,000.

Takeaways

It is incredibly difficult to earn any substantial revenue from games as an indie developer. Keep in mind, that the figures stated above are gross revenue. This is before discounts, game returns and a 30% Steam cut gets taken off it, not even talking about taxes. However, the top indie games have not just managed generate a lot of revenue, they have become platforms to launch future games from. Being in the top 10% of games is not just about luck. In fact, there are some pretty concrete steps that most indie developers often disregard. One of them is doing market research and competitor benchmarking to understand what the customers want, what the market is lacking and what the top devs are doing right. The indie developers that have done well, have typically consistently continued to do well as they tackle all aspects of development, have diverse skillsets in the team and have a well thought through marketing campaign with a lot of effort going into executing it. I already briefly touched on some characteristics of successful indie teams, but I will be looking into it in greater detail in my next articles – What makes a successful indie studio and what makes a successful indie game? These articles will explore how to recognise which games will prove successful before release. Indie Games Revenues on Steam

Methodology

This section explains the methodology used in my analysis, to find How much money do Steam games make? Since Steamspy has become a less accurate predictor of game revenues, a simple method has resurged in popularity – the Boxleiter method. It has been shown by several different datasets that on average a Steam game sells somewhere between 30-150 times their total amount of Steam ratings. That’s a big range, but gives the right ballpark figure. The median game’s sales are around 60 times their total ratings. Now, it’s definitely imperfect as a method to get any accuracy for a single game’s earnings, but it works really well with larger sample sizes. I’ve applied it to all 41,000 Steam games to see the results. To make sure we’re comparing relevant games, I’m only looking at games that are already released and not early access. I’m also applying a rule that they have had to have at least 1 rating on Steam. This includes 31,000 games in the first sections of analysis.

Thanks for reading our article How much money do Steam games make? For more interesting articles on the indie games industry, check out the links below.

INTO INDIE GAMES REVIEWS

INDIE DEV INTERVIEW: USTWO’S DANNY GRAY TALKS DESTA: THE MEMORIES BETWEEN

HOW CAN INDIES BENEFIT FROM TAX BREAKS?

WANDERSONG STORY WALKTHROUGH – PROLOGUE & ACT ONE

GROWBOT – REVIEW