Okay, let's talk about this. How much DOES it take to run an indie studio these days? This comes from having run several studios myself. I hope others here who are running studios now will chime in too. A longish.

(This was partly inspired by a tweet by @swizzle_kiss.)

One of the first things to consider is that your costs depend a lot on where you are. I know only about running a studio in the US, and even then there are surprisingly large regional differences in costs.

For an indie studio, there are few benefits to being in a game dev hub city. You can sometimes find people more easily, but this depends on your network. If your network is good, distance is all but irrelevant, and the cachet of being in a major hub is really not worth the cost.

You need to pay people, including yourself, unless you're living off your savings (for how many *years* can you do that?). You're an indie studio, so maybe you're not paying going rates, but people need to pay for rent, food, etc.

So maybe $50K on the low end, unless they also have years worth of savings to burn through. Better to figure $100K per person per year as a starting number, especially since you need experienced people if you can get them (and even *that* is a discounted rate).

You need to pay state & federal payroll taxes & health insurance (because it's the US). So for whatever salary you pay, figure your cost is really 1.2x to 1.5x that per year, depending on your state. Figure high, you do NOT want a nasty surprise here.

Then there's equipment, software, etc., which can easily get to $3K-10K/p/yr. Also rent, utilities, & internet, unless you're fully distributed. Then these costs don't go away, but you can limit them. But add a bit more in for travel. Ether way, add $5K per person per year.

So far, that means if you have a team of 4 people, say, you're looking at an annualized cost of $300K-$600K per year, at ~$75K-$150K per full-time person per year, fully burdened. There are ways to bring that down, but honestly not by a lot.

There are other big costs to consider too -- marketing and support most of all, but also business costs for accounting & taxes, plus specialized costs for expert contractors you bring in for whatever your team doesn't specialize in: narrative, VFX, etc.

There are two big questions you need to ask at this point:

First, where are we getting all that money? Savings, friends & family investment may be your first stops. Then maybe contracting, getting paid to work on other games instead of your own. Which slows progress on yours.

But you can see why so many indies start with this kind of work. Gov't grants are heavenly, but also very hard to get in the US (one reason you see so many scrappy startups in Europe is that these are a bit more prevalent there, plus the whole health care thing).

This is why publishers are often so attractive: they have the money (& typically have expertise in marketing, distribution, & live ops you don't have). But they also typically own your game in exchange. You need to decide if it's worth it. (Advances/royalties are another topic.)

FWIW, don't even think about angel or VC investment unless you have a proven track record, & probably not even then. Honestly, I never want to take VC investment again if at all possible. (There are a few hybrid publisher/investor groups out now that DO look promising though!)

The second, and by far the most painful question for indies is: is it worth it? What are the chances our game will make back *at least* 3-10x our costs, hopefully more?

If the game takes 2 years for a small team of 4 to make at ~$500K per year -- so $1M in dev costs (note that we haven't even talked about marketing or live ops yet), what are our chances of making back enough to keep us afloat as we make our NEXT game?

Or, do you just hope and pray that your game does well -- well enough at least to put you on others' radar, individually or as a group, so you can sell the IP, sell the company, or at worst go to work for a more established studio and let THEM worry about the finances?

I realize this may be a harsher reality than most hope for. I'll offer two other clear-eyed views of what it means to run a small indie studio:

First, @danctheduck's sobering and insightful "Minimum Sustainable Success" post -- one that every aspiring indie should read and consider carefully: https://lostgarden.home.blog/2015/04/13/minimum-sustainable-success/

Second, @jasonrohrer's excellent GDC talk on "The Shape of Financial Success Before and After the Indiepocalypse." () This offers some significant insight into how to increase your odds of success as a small indie based on how you make your game.

There's much more to say on this topic, but for now I'd like to hear from other indies:

What have your experiences been in running a small studio? What would you add (or correct!) to what I've said here?