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Blog: Can week-one Steam sales predict first-year sales?

by Jake Birkett on 02/06/18 01:39:00 pm   Expert Blogs   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

Recently I asked a bunch of devs how their week 1 (gross) revenue on Steam compared to their year 1 revenue (including week 1). I wanted to know because we had just launched Shadowhand on Steam and I was interested to see if the first week could in any way be a decent predictor of longer term sales.

I got about 30 data points and you can see the resulting chart above.

A fairly tight range

The results are interesting in several ways. One obvious one is that most of the results fall in the 2x to 10x range and aren’t something like 50x or 100x. However, one dev who runs a large studio did have an outlier title that had a very large ratio, but I excluded it because it’s really not typical of your “average” indie game.

OK, sure the range isn’t that tight because if your game did 2x week one you might go bust and if it did 10x maybe you’d end up buying a Tesla (depending on the scale of your week 1 revenue). But I still think it’s interesting and can be useful. Let’s consider some more things…

Average

So the Mean (average) is 5.1x and the median (middle value) = 4.5x

This is pretty useful data. If your game made $10K in the first week (not an easy feat btw), you could perhaps reasonably assume it would make about $50K in the first year.

Be Conservative

This is not a political statement, but more like a sensible approach to predicting the future based on past performance.

Basically, it might be more sensible to assume something like a more conservative 3x ratio and plan your cash flow based on that.

That’s what I’ve done for 2018 after I saw the first week of sales for Shadowhand. At 3x, my year will be a bit tricky cash flow-wise, and at 5x it’ll be “OK”. Any more and I’ll be very happy. So, for me, based on a 3x-5x range it was clear that I need to get on and earn some more money pronto!

What about the Steam “flood”?

“But what if some of your data points are old and some are new? Surely that makes a difference in today’s crowded market?”

No. I checked, in a cursory way, and the release date of the game didn’t seem to make any difference.

What about big games vs small games

You will have definitely heard of some of the games in my chart, they have made millions of dollars. Others you probably won’t have heard of. Also some of the games were large in scope and others were not.

Again, I could not detect an obvious correlation between game size/fame and ratio. Though I haven’t spend very long on this, so take it with a pinch of salt.

What factors can affect the ratio?

My own game, Regency Solitaire, had a 10x ratio. It has not made millions of dollars, but it does have a good Steam review score (97% positive). So it’s possible that is a factor.

Another of my games, Spooky Bonus, has a 98% positive score and a 6.3x ratio. So I can’t draw a firm conclusion from that, but it seems logical that “good” games have a better tail as people talk about them more, and maybe the Steam algorithms surface them more to potential customers, plus of course a good review score may sway a “floating purchaser”.

If your game had a poor launch with little marketing support but gained traction later in the year (with press/streamers), or you heavily discounted it later in the year, that could obviously affect the ratio too.

Updates/DLC, localisation, community, being in a bundle, more marketing etc. All of those things could affect the ratio and I’m sure you can think of more.

Ideally if you get everything right (and there’s a lot to get right), you’d hope to have a good launch and also go above the average 5x ratio.

Can I use this chart to predict year 1 revenue?

No. Obviously the above chart is useless until you know your week 1 sales, and predicting those is a black art because they can have huge variability in range.

But once you know your week 1 sales, you will have a better idea of if you need to rush out and find some contract work, or if you can chill a bit and make more another game. Some sensible people have a plan B, such as contract work, lined up for post-launch anyway.

However, let’s have a little bit of fun with some extrapolation…

Recently Mike Rose gave a talk about realistic PC sales figures in which he stated that the average “good” game on Steam will make $10K in its first month if priced around $10. Now we don’t know his criteria for “good” but let’s run with his numbers:

- $10K in month 1 from Mike’s data.
- Assume $5K in first week (it’s not 25% of $10K because the launch spike is most of the sales)
- Use a 5x average multiplier based on my chart above.
- This gives $25K in first year.

That’s for an average “good” game. Doesn’t sound like a lot does it? Now go and read You are spending too long making your game for further thoughts on how to make more profitable games.

Caveats

This article is not advice, it’s just some personal musing that may or may not apply to you. So take it or leave it, and please feel free to correct me or expand upon my points in the comments. Thanks.

How did your game do?

Let me know your gross Steam revenue week 1 vs year 1 gross ratio in the comments. Probably best not to share actual $ values as that is no doubt disallowed in your Valve contract.

Also if you feel like it, please share your month 1 vs year 1 ratio because that could end up giving a tighter range.

If you enjoyed this article, please share it. Thanks!


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