Production Costs

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Jo'ogn
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Re: Production Costs

#16 Post by Jo'ogn » Sat Nov 29, 2008 7:47 am

LVUER wrote:How's if the doujinshi didn't sell well? Will the guys go bankrupt, since selling for 10,000 copies is not an easy task (or it is?)
Well, if you spent a huge amount of money to make sth, you have spent your money. If you don't sell your product you money will be gone. Usually ppl found small companies to limit their losses. Those will likely go into liquidation.

Two years ago I was considering to write and publish my own book. You can get copies of your own book, so you wouldn't need a publisher. At this time it was about 7000 Euro for iirc 1000 copies. It depends on number of pages, type of cover and if you want colour prints in the book/cover. You can look up their internet sites for prices.

Even if a publisher - in any industry - grabs most of the money for themselves, they can do one thing which a private person usually can not: advertise the product BIG! to get it sold.

An one page andvert in a magazine alone may cost a few thousand Euro depending on the popularity of this magazine. iirc Konami spent about $8 million to advertise "Metal Gear Solid 1" o_0 (numbers are on the wikipedia pages)

Some ppl believe that on the WWW they can do their own advertisement. Well, I guess looking at the sites e.g. of Ren'Py game makers gives - at least me - the impression that there is no big money making involved.

I work with an amateur team who make PC games. Games were advertised and offered on several German and English game sites. I do not mean to discourage anyone but they didn't even sell more then 10 downloads of their last two games. Ppl need to know about your product. A webpage alone will not attract enough ppl that might be interested for your type of product.

Commercial games are usually announced years before their are released to be known and to create huge expectations in the gamers: Gothic, Crysis, God of War. Crytek had a budget of €16 million for "Crysis" . The number employees exploded from 60 for "Far Cry" to over 120. They even relocated their studio into another city...

Similar to the (absurd) music CD "loudness war" potential customers obviously react mainly to the product which is "hammered" most "loudly" into their brains by advertisement. So add advertisement to your production costs.
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Re: Production Costs

#17 Post by Counter Arts » Sat Nov 29, 2008 10:58 am

Well keep in mind that this is specific to comiket and Japan. There are major differences in Japan and at least the two conventions I go two in Canada.

When you look at that cost breakdown, you should see it as how much money is in total in the business/circle.

Like, look at it from an rpg grinding analogy.

You start with 100 g and some basic equipment. You want to make money.

You go out and do something that will cost some money but return more money.

You get 200 g but doing it cost (potions, inn, etc...) 150 g. You get 50 g net.

Now you have 150 g. You do this a few more times until you get 300 g.

Now you can upgrade your equipment and you're faster at beating the enemies because you leveled up.

You go to grind at place with higher costs but higher returns.

----

Now how FAST you grow depends on your net profit.

The big breakdown of costs probably is of someone big.

@LUVER : The price tag isn't that initmidating UNLESS you plan to go that big in your first shot. Your first few times are going to be much smaller.
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Re: Production Costs

#18 Post by LVUER » Sun Nov 30, 2008 11:29 pm

So this doujin business mentioned before is commercial/professional one? Since in comicket, there are many doujin mangaka who publish their own manga. So I think that is the one we're talking about...

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Re: Production Costs

#19 Post by Adorya » Mon Dec 01, 2008 12:32 am

That is called indie, indie label or "independant" in western size :mrgreen:

The doujin term definition doesn't separate "pro" and "amateur", only the way to distribute your work (outside big international networks)

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Re: Production Costs

#20 Post by Jake » Mon Dec 01, 2008 12:58 pm

'Commercial' and 'professional' usually mean two different things; one simply relates to the sale of goods (as opposed to giving them away for free), while the other usually relates to whether or not someone can earn a living doing something.

So the fact that they're selling it means it's commercial; whether or not it's professional is another matter. If they can repeat those figures every month or two I expect they at least could be... is there a comiket or similar event every month, though? ;-)
LVUER wrote: For you guys out there, is the amount shown big or just so-so for a business? Because if I convert it to my currency, well, I won't be able to gather that much money even in 10 years (with my current job).
For a business, it's pretty tiny, really. I would expect any business in this country that was regularly only taking in a million yen in gross profits would probably only employ a handful of people. Although, of course, any profit is better than no profit. ;-)

For an individual, it's pretty good - depending, of course, on how long they took creating the doujin in the first place, and how many of them worked on it. I work as a C# programmer, for example, and a million yen at the current exchange rate is about four months' take-home pay for me.

(Bear in mind that international exchange rates aren't literally there to convert the cost of a loaf of bread; they're governed by money markets, which aren't driven by quite the same forces as store-shelf economics. So you may find that it converts to an astronomical sum in real terms in your local currency, but you'd probably also find that people wouldn't buy a doujin in your country for 300 yen, and the printing costs might be different, and the accomodation would cost a different amount, and so on.)

Of course, conspicuously absent in the balance there is tax - if that money is all going directly into the creator's pocket, then it's income which is taxable just like a wage from any other source, so depending on what other income the creator has, they could be paying maybe half of the million yen to the government... so if two guys worked on the doujin for a man-month each, and they both have full-time jobs elsewhere, then they might be getting a reasonable-but-not-fantastic wage out of it.
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Re: Production Costs

#21 Post by Counter Arts » Mon Dec 01, 2008 11:22 pm

The tax (in Canada at least) becomes an issue when you start raking in more money that makes your income go into the higher tax brackets. At that point though, you can set up a corporation and can pay the start up costs for that.
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Re: Production Costs

#22 Post by Jake » Tue Dec 02, 2008 9:26 am

<Blah blah, not an international tax accountant/lawyer, etc.>
Counter Arts wrote:The tax (in Canada at least) becomes an issue when you start raking in more money that makes your income go into the higher tax brackets. At that point though, you can set up a corporation and can pay the start up costs for that.
The way that it typically works is that you pay the bracket's percentage for whatever proportion of your earnings fall within that bracket. So if you're in a country where you pay 0% on the first 5,000 of earnings, 10% between 5k and 15k and 50% above 15k (for the sake of an easy example) and someone is earning 20,000, then:
* On the first 5k they pay nothing, leaving them with 15k of taxable wage
* On the next 10k they pay 10% (100) leaving them with 5k of taxable wage
* On the remainder (5k) they pay 50% (2500)

So in this example, they'd pay 2,600 in tax on a wage of 20,000... but if they earned any other income from any other source, because they're already in the 50% bracket, 50% of that income would be due in income tax. So someone earning an extra 1,000 from doujin sales would just be treated as having a gross taxable wage of 21,000, meaning that they'd end up paying 3100 - including 500 of their doujin revenue - in income tax. The only way your doujin income would be untaxable is if your gross income for the year before the sales was 4k or less.

Setting up a business entity of some kind works so far as that they don't pay income tax, so you can just accrue that money as an asset of the business... but if you want to give it to the individual - in more or less any form, even as complimentary health insurance or free noodles or whatever - then it's technically still part of that individual's taxable income. And corporations pay other taxes instead, so you might find yourself worse-off after all. And... setting up a business also means you're far more likely to be investigated for VAT/sales-tax fraud if you don't cough up a percentage of your sticker price (typically somewhere between 5 and 20%) to the government before anything else. You get your supplies cheaper as a side-effect of being VAT-registered, if you're in a country with a VAT, but it doesn't totally offset the sticker loss unless you're literally selling at cost.

Generally, setting up a business is usually done to - for example - reduce your personal liability if you can't afford to pay creditors, rather than to avoid income taxes.



(Of course, the easiest way to avoid paying tax on doujin sales is to just not tell anyone about the money, it's perfectly plausible to get it under the radar because it's likely entirely cash transactions. But that's definitely just plain illegal.)
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Re: Production Costs

#23 Post by DaFool » Wed Dec 03, 2008 11:10 am

Hmmm... is it just me or do indie gamemakers work on a 'personal taxable income' basis rather than a 'corporate tax' basis? Mainly because, uh, they're the only ones working on the game for the most part? (And subcontract the rest).

While it's nice to imagine you can grab a bunch of friends over some beer and paper napkins and sketch out your plan to create the next software company to rival Blizzard or Typemoon, that's just... unrealistic.

I wonder if there's a way to set up a temporary commercial entity that will last just 2-4 years enough to get a product out then fall back to obscurity (and no obligations).

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Re: Production Costs

#24 Post by PyTom » Wed Dec 03, 2008 12:55 pm

Disclaimer: I am not a lawyer or tax professional. Also, this only applies to the USA, and not other countries.

At least on the US, it's generally better to work on either a personal income basis or use pass-through taxation (a LLC or S-corp). That's because the corporate tax is much higher than the usual personal income tax.

One nice thing is that if you make money off of games, you can deduct from that income the cost of expenses you incurred making the game. For example, if you made $2000 from a game, you'd have to report that as $2000 income. But if you bought a $1000 computer to make the game on, you can report that as a $1000 expense. And so you don't have to pay taxes on $1000 of that $2000.

(You do need to be careful how you report the $1000 expense. There's a program that lets you expense up to $100000 or so of capital in a single year... so you want to report things under that.)
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Re: Production Costs

#25 Post by Veshurik » Tue Dec 12, 2017 12:05 pm

Something changed with production after several years?

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Re: Production Costs

#26 Post by stapee » Tue Jun 26, 2018 6:41 am

Thanks for the link!

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