Glad to see this, because they have worked long and hard on this game. For the optimistic, divide ~$4m (post-tax) by team of 2 for ~20 years (they started work in 2002). They've made some money in the meantime obviously, but seeing the final profit doesn't accurately capture the overall investment. Just in case you were thinking of quitting your day job to become an overnight millionaire making indie games.
They were also making 14-15K per month before that (it's mentioned in the post), so they were already extraordinarily successful as far as 2-person indie gamedev teams go.
As far as indie devs, yes, but in the greater scheme of things that is still fairly pittance money. $180k pre-tax split two ways, and then eaten into heartily by health insurance (Tarn and his brother have mentioned that medical issues are what pushed them to do the Steam release) doesn't leave a whole lot.
But that also means that as long as they don't significantly increase the cost of their lifestyle, that $7m pre-tax will go a very long way.
It sucks that their tax burden is going to be higher on account of making all this money in a single year, putting almost all of it in the highest brackets. Unless they did some clever accounting tricks throughout the 20 years to prepare for this situation, which I highly doubt they did.
I don't know where he lives, but in California it could easily add up to close to 50% since he's "rich".
As far as I know, they live in Washington state. Which should help with the tax on income at least a little bit, given the state has no income tax.
Still, yeah, having the entire amount being dropped on them in a single year will probably have pretty major federal income tax consequences. Hopefully, they will figure it out, and the sales of Dwarf Fortress on steam won't dwindle. I find that it is a pretty good timing for the release, given that Rimworld (the spiritual competitor) has gone extremely mainstream, so people are definitely more open these days to that type of games.
i'd thought the standard way would be to borrow heavily and invest in other financial assets. Then the interest payment would be paid out pre-tax, thus reducing your tax liabilities down to a manageable level.
The financial assets will return money in the future, but much more slowly, and get preferential tax treatment compared to direct income (such as long term capital gains tax discounts).
When you have $7mil in cash (and expectation of more in the future), there would be options not available to lower net worth people i suppose?
Looking at the numbers and releases I must say: If they had streamlined their release process to put out releases more often then the revenue might have been more even and better.
Yes and no. Possibly. Personally, I think their dedication to work on it in an artistic 'passion project' style is what made the game what it is. I suspect if they had followed a more regular schedule they would have gotten a more ordinary, and forgettable, indie game.
Maybe. Factorio does a great job of putting out releases and sharing details about what they are working on and you would have thought they were evil incarnate after they recently said they had to raise their price by $5 to keep up with inflation.
People are fickle and hindsight isnt always so clear.
I don’t know for sure but 3.5M lifetime sales times 30 is $105M*70% is $73.5M, they have around 30 employees, maybe they pay $200K a year, so that’s $36M over 6 years, netting them $37.5M. I could be way off though.
The game wasn't always at $30. I saw it for $20 a few years ago (regular price) and I believe it was even lower before, like $15, but I'm not sure.
There is also a Nintendo Switch release, so they will have to pay for the Dev-Kit's and licenses which are not cheap. Not as expensive as in the 80's, 90's, early 2000's where a single Dev-Kit could be six figures, but still a significant expense for a indie studio.
So we are already a little bit off from the numbers you posted. I assume, the 30% you cut off is for taxes. Good idea, but Steam and all other platforms where the game is sold also want a piece of the cake. I don't know the numbers for other platforms, but Steam takes 30% of the listed price.
So even with a $30 price tag on Steam, they get $21 after commission. An that is pre-tax... They need to buy hardware for their developers, rent an office, pay developers and so on. So even the founders are not getting rich. A "boring" job in business software can make you more.
Hard to say, working faster/harder doesn't usually mean the quality will remain unchanged, and their user base probably care more about the quality of releases rather than how fast they put out releases.
I'm not talking about working harder or faster, barely anyone could keep up with their attention and dedication to detail, I mean the release process that appears (from the outside in the eye of a webdev who merely does a git push and clicks a button some time later) to be rather crude shipping of the game. They didn't even use version control software 9 years back https://news.ycombinator.com/item?id=19381634
In my days we were sending them money via Paypal and if it was above a certain amout, then they'd kindly ask for your postal address, draw you a sketch (I have three, one of them with two dwarves in minecart jumping over a ravine, one of them has a beer in his hand) along with a button.
Yeah they used to have a PO Box you could mail checks/etc to. I still have it in my billpay. The only gaming value that has come even close for me has been Factorio.
> divide ~$4m (post-tax) by team of 2 for ~20 years
So about $100k per year, per person (after taxes)
I know that this is nothing out in Silicon Valley, but for reference, the median income in the US is $19k (net) per year, and about $15k (net) per year in Europe (if you include eastern Europe).
I can't tell from your comment whether you feel 100k is high (hence the "optimistic") or low (hence the warning at the end).
The first paragraph of that Wikipedia page: "Personal income is an individual's total earnings from wages, investment interest, and other sources. The Bureau of Labor Statistics reported a median weekly personal income of $1,037 for full-time workers in Q1 2022. For the year 2020, the U.S. Census Bureau estimates that the median annual earnings for all workers (aged 15 and over) was $41,535; and more specifically estimates that median annual earnings for those who worked full-time, year round, was $56,287."
That graph seems to be just incorrect. All three of the links it's supposedly sourced from don't have it on their pages. There is a remark of "own work," so I think a Wikipedian assembled it themself. Given that it frankly contradicts the article it's in, I would assume that it's in error.
The graph would be consistent with the part you quoted if the median earners were paying 33.5% tax: 41535 - (41535 * 0.335) is roughly the 27598 figure it shows for 2020. The figure only shows state and federal income tax, which adds up to 13% tax; I don't know enough about the US to now if there are other taxes which would add up to 33.5%.
I ignored the payroll tax, because I assumed that's not counted as part of the employee's gross income?
And I agree that neither income tax nor income + payroll tax adds up to the 33.5%. I don't know if there are more taxes which need to be considered. 13% total tax seems low.
> I ignored the payroll tax, because I assumed that's not counted as part of the employee's gross income
Employee share of payroll tax is, employer share (which is shown reaching down from the bottom) is not.
> 13% total tax seems low.
Given what I've actually paid with a far above median income, 13% soubds reasonable. Its low as a nominal rate, but there are lots of credits and deductions available, and the before-tax median personal income is well below the cutoff for EITC, which can be a huge one. Heck, a large minority of the population pays zero or negative net income tax.
> In any case, their point still stands with the $29k figure.
Comparing comp for two people who are working really hard, doesn't really work when you're comparing to a median income that includes lots of people who don't work or don't really work.
Similarly, comparing median net income (which includes taxation) with a pre-tax windfall doesn't really make sense, either.
Further, we're not adjusting for time value of money...
And for every one making under 30k per year there is one making over 80k per year.
And, very interestingly and more nuanced, you can take into account how a person changes over time. For example, while I was a grad student, I worked full time and definitely fell under the poverty line. But would you really consider me a poor/destitute person?
About 60% of Americans break into the top 20% of household income at some point in their lives(>$110k/yr). In the same vein, almost 20% of Americans will earn less than the poverty rate at some point in their lives ($24k/yr).
Like I said, I think Americans have many problems, but if there is one thing we are good at it is income (and the consumption that comes with it).
The top federal income tax bracket is 37% and the top California tax bracket is 12.2%. This is for income exceeding 500k. So disregarding local taxes and property taxes, in California most of this income would be taxed at 49.2%.
This is a subthread about the median income that we would compare the $7M payout to, not the $7M payout itself. It certainly falsifies the graph paulluuk linked to, and using high CA taxes on the Bay 12 payout only further undermines paulluuk's comparison.
Apologies for the lack of clarity, I was addressing just this sentence in the parent
> That would require greater than 50% taxation, which isn’t realistic at all in the United States.
My point is that higher than 50% total taxation on a large single-year income (considering local and corporate taxes) is entirely possible in the United States, though it may be less in some states than other. I’m not saying that the estimate is correct as the Tarn Brothers don’t live in California. But if they took the income to a corporation, paid corporate income tax, and then took the whole income or a large part of it as dividends in a high tax state, then >50% is quite possible. On a pass-through entity, close to 50% is the standard and unavoidable in high tax states.
Federal taxes are marginal. You don't pay 37% on the full 500k, you pay 37% on anything below that bracket start point, you pay the lower rates. For instance, if you're single and declare $1M in income your effective tax rate is more like 33.5% and not 37%.
They've also been receiving donations since early on. Last time I checked they were up to 100k per year, but it started much smaller. I donated $20 back in the days when they'd send back an ASCII art scene in email or crayon drawing.
> the median income in the US is $19k (net) per year, and about $15k (net) per year in Europe
That's off by close to half. The median income in the US is around $37,000 [1], the median full-time income is around $53,000 [2] and the median US household income is up over $70,000 [3].
It's also worth noting that those median incomes are paying low tax rates on that income (typically ~15%-20% including federal + state + local + fica, depending on the location).
You're looking at the median HOUSEHOLD income. So on average the wages of two people, median income is a bit below half of that at 31k (pre tax I think).
If you look at Table C-1 in parent's source, it has median post-tax household income at 65K which is a much more reasonable number. We're incredibly wealthy, a per-person median income of 19K doesn't pass the sniff test. Keep in mind taxes are much lower at the lower end of the income spectrum as well. If you're married and making the median income, your overall federal tax rate is only going to be about 15%.
If you’re married and making the median household income, your overall federal tax rate will likely be significantly lower than 15%. You’ll be in the 15% bracket, but roughly half your income would be taxed at 0%.
> I know that this is nothing out in Silicon Valley, but for reference, the median income in the US is $19k (net) per year, and about $15k (net) per year in Europe (if you include eastern Europe).
Your (net) number in the US is way too low.
The real (aka inflation adjusted) median earnings for US workers is around $42K before taxes.
Tax rates at the lower end of the income spectrum in the US are very low. Federal income tax is effectively 0% for the bottom income brackets, though they’ll have to pay some payroll taxes, state taxes, sales taxes, and others along the way. Even considering that, there’s no way to go from the >$40K median earnings to your $19K net income figure.
I quickly grabbed the numbers from https://en.wikipedia.org/wiki/Personal_income_in_the_United_..., where I just copied the number from the "W-2 Median Wages" graph, however I have no idea what W-2 is so that might explain why so many people are saying I'm wrong.
Also I used "real wages" which seems to be corrected for inflation rather than the actual numbers.
As others pointed out, that just can’t possibly be correct given the median pre-tax number and actual US tax rates. If you made the median individual income of $45k and lived in a high tax state like California, your net would be ~$37k.
Yeah it is pretty good, but not as good if someone really wants to take the risk. There are people, e.g. fund managers and corporate CXOs that talk about they get the big bucks because they take the risk, but TBH what risks do they experience? If something fucked up they can simply walk away, usually with fat profits for their own. On the other hand, a couple of indie developers risked getting nothing from a full-time job, that's what real risk-taking sounds like.
You're thinking this in a very capitalist way which seems completely unrelated to these two gentlemen. These guys are now profiting off the game out of necessity, not because they're finally "cashing in" on all their "risk". From the beginning, this was a passion project and an expression of themselves. Not an investment.
In calculating this you should also keep in mind the very real risk that that game you’re spending 20 years on doesn’t pan out and people don’t buy it. That risk makes it reasonable for the reward to be high.
Yes, I'm merely saying that one can't derive the tax from the $7m without considering expenses. Salaries being taxable at the employees' rate doesn't make it invalid.
I don't think there is. I wholeheartedly agree with the prior sentiment. Way too much of peoples lives are spent on shit that does not really matter. As a people we have overcomplicated the shit out of everything to such a degree it's disgusting. And it's all based on greed. Optimize this structure to pay the least tax, optimize your income into this and that so it magically makes more money. Meanwhile those without any real money can't take advantage of any of that kind of stuff. Yeah, really fair!
Not everyone subscribes to the financial bullshit the wealth class has created.
Do you agree with the premise that it would be incredible dumb and dangerous not to structure their business into a legal limited liability company?
Do you agree that the accounting and tax handling is best left to professionals because it can be complicated and because you trade a little bit of money for the peace of mind that you’re following the rules and more free time?
If you agree with those two points, then the act of paying out the profits as a dividend instead of a salary rolls out pretty much for free. Because it’s not some hard to set up tax avoidance construction, it’s the norm.
The fact of the matter is I'm not saying "don't use a professional". I'm against the very concept of how convoluted everything is in this world- and nearly everything is created in ways that benefit people who make up let's say the top 15% of earners.
I'm not oblivious to any of these things, I have an econ, accounting & M.S. finance degree. I have a CPA (never practiced).
And you know what? I see this shit all the time in my line of work. I've been lucky enough to do more of the technology/programming side of the industry I'm in so I don't kill myself on the meaningless garbage that the people I'm creating stuff for actually do.. but I see this shit all the time.
Structures or laws being set up constantly to avoid tax that your normal person has absolutely no way to use. Self employed people setting up S-Corps so they don't have to pay into social security because they will be rich enough they don't need it themselves so why pay into the system to help others. People in other countries setting up US structures so they can pay a lower tax rate here than their home country while they get to reap all the benefits. LLCs being set up in delaware so you don't have to pay state taxes when one could easily argue you operate there if anyone checked. People throwing money into dividend paying stocks just because of a low tax. Reducing long term capital gains to stupidly low tax levels.
I mean I can go on and on. Your average person GETS ALMOST NONE OF THESE BENEFITS.
I'm not saying all of the stuff is bad or not needed. But the vast majority is set up so people who already make way more than the average person don't have to pay their fair share.
So look- I'm more being general here. I'm not specifically talking about this case as much as I'm just bitching about how the world works. It just disgusts me at this point. What one calls "optimization", at this point in my life I call it taking advantage.
The tax code is structured the way it is for a reason. It’s not there to be exploited. It’s there to be followed. DF is a business and labor of love for the two owners. One which generates revenue and is clearly above board. There is nothing wrong with taking dividends as the business becomes more valuable rather than increasing salary. And it’s not some mega tax loophole for the wealthy. By any measure these two aren’t wealthy. It takes 30 min with an accountant it doesn't consume your life and waste time and sap energy to be on top of your books…
They don't have a lump 7MM sitting around and are most certainly not set for life. Someone else did the math and it comes out to 100k per person per year after taxes and fees. Do you want to reassess?
Dividends are not automatically treated as capital gains, but in this situation, its possible they would be considered "qualified". The company being formed in the US, the dividends being paid out to US share holders, and the shareholders holding the stock for at least 60 days (120 days in some circumstances).
This really only applies to C-Corps as well, and then you run into the Double Taxation of C-Corp income and pay a 21% tax rate at the corporation, then additional capital gains on the dividend income.
BUT dividends would be tax free up to around $80k of income (any income (salaries, 1099, etc., also assuming married), then they would be taxed at 15% - 25% above that, but do not forget, the corporation has already paid 21%.
So optimizing for qualified-dividend-only income requires a LOT of forethought, and either accepting a lower income (since the benefit maxes out at $80k total income), or paying 15-25% + 21% for a 36-46% tax rate on your dividends.
They'd also likely pay the corporate tax rate in that case, which is 21%. Tack on 20% for the highest cap gains bracket, and you're at 41% federal unless you can work your way out of it with some loophole (e.g. carried losses on the cap gains side, idk what on the corporate side). FICA caps at something like $150k, so they'd actually be paying more than the highest income bracket of 37%.
The really smart move (or evil move, depending how you see it) would have been to start the business within a Roth IRA. Then you'd just pay the 21% corporate tax rate.
Out of curiosity, are there tax options (specifically, retroactive ones) for this situation?
As near as I know: (1) they formed a company at some point in the past (S-corp?), (2) they did constant work per year, (3) they had some donations per year, (4) they suddenly had a large amount of revenue in 2022
I'm guessing they didn't fully account for their time/expenses in prior years.
If they didn't, are there options to go back and amend previous returns in amounts that would be meaningful? (Assuming they have proof, etc.)
S-Corp is not an efficient entity type for a windfall like this. It is a pass through entity, and cannot retain earnings year over year, for that you need a C-Corp.
That said, had they already had a C-Corp set up, then this income would be taxed at 21%, so after Steam fees and taxes, they would be sitting on around $3.3M (not counting publisher fees and any expenses that might arise). If they hold that money for 120 days, they can then do regular monthly dividend distributions of around $7k, and it would be considered tax free to their person (assuming married, and no other source of income), but keep in mind they already paid 21% taxes on it. Any amount above that would be taxed at 15% (then 20% at top tax bracket), so if they wanted $200k/yr, that would be a monthly dividend of around $17k, 7k of that is "tax free" then the other 10k would be taxed at 15%. But again, they pre-paid 21% taxes at the c-corp level, so 15% would actually be 36%, which is nearly top tax bracket already, and it was hit MUCH sooner than if you took a higher paid salary.
What you suggest is not a hack of the tax code. Close corporations are generally required to pay reasonable salaries to their owners (and more importantly, payroll taxes on those salaries) if the corporation's revenue is derived from the labor of its owners. Not doing this is the #1 reason that close corporations, and their owners get penalized by the IRS. From personal experience being brought in to put out these fires, the IRS might be willing to negotiate the size of the penalty, but penalties will be owed, as will back taxes on the tax deemed due, as well as interest on those back taxes. Generally, these close corporation owners will spend more on penalties and interest for a single tax year than they would save in 5 years from this scheme, and that doesn't include legal fees they paid for the audit.
There is no bright-line rule for what a "reasonable" salary is. For low six-figure amounts, the SS contribution threshold is usually considered a safe amount with the rest paid as a dividend, but for seven-figure amounts, different considerations apply. Indeed, at larger amounts, the IRS is actually opposed to close corporations using inflated salaries to reduce corporate income taxes (because salaries are deductible to the corporation but dividends are not).
So: owners would have paid their progressive rate on the XXXk of income received as salary (which is deductible to the corporation), at a likely 22-37% marginal rate, plus up to 12% state income tax rate, for a total of up to 49% including state taxes. The remaining income received as a dividend would be subject to a corporate tax rate of 21%, plus a personal tax rate of 20% (15% on the portion of the dividend income, if any, below the QD 20% rate threshold, which depends on how much of their income they chose to allocate as salary), plus 3.8% NIIT, or a 44.8% rate of federal tax before state taxes on the corporation and the owner are taken into account. Or in other words, usually worse than just taking all of the profits as a salary.
I think this would be difficult to do without tax fraud. You cant retroactively increase your salary to show you were owed more money for unpaid salary.
If they had money in a C-corp to start with, you could run it at a loss (actually paying the salary), and then carry forward those losses to offset the windfall.
With an S-corp, Each year the company ran a loss, they would receive a negative dividend which would adjust their annual earnings down.
This doesn't really make sense. They were a donations-run "charity" shop making a free game. They only decided to put it on Steam so they could fund a retirement as well as a future for the game.
For any indie devs out there: don't give your game away for free for 18 years if you want to make money. That's really the lesson here.
Had DF monetized in 2006 instead of going free, and played the industry game as others do, I would not be surprised to see DF at $100M in 2023.
> Had DF monetized in 2006 instead of going free, and played the industry game as others do, I would not be surprised to see DF at $100M in 2023.
I don't DF would have existed then, it would be hard to see it gather the same community and the creators probably wouldn't have felt as free to explore their own ideas if they felt it needed to be commercially viable.
The thing that made DF's current commercial success is it's previously un-commercial approach. It's a true labor of love and that shows in every aspect of the game.
Ok, so how close is minecraft as a "toolkit" for converting ascii games to graphical? I don't know how minecraft servers/mods/etc work, I just have been watching my kid's JJ/Mikey with him. I squarely missed the minecraft crazy, I was post-college.
But DF could be (squints) converted to some minecraft "world" couldn't it? How hard is it to do minecraft worlds that would mirror/translate/active generate from some complex sim process like DF?
The only dwarf fortress players I know IRL are also skilled with and interested in computers. Normies aren’t sinking 6 weeks (what it took me) to ramp up on DF, and certainly wouldn’t have in 2013
Don't underestimate what tiles do for a game in terms of (perceived) accessibility. Anecdotally my kids (under 11), who will almost certainly abandon the game after playing it, are demanding that we get it because they like what they are seeing, they like drama (dwarfs into zombies), they like building and crafting (infinite possibilities vs. MC). Now it's true that I've been talking about it, so they are feeding on my hype, but they are also genuinely intrigued by it. I think the viral potential of DF went way up with the recent release, it might not be completely unheard of as common amongst the broader gaming populace in the future.
We may be in a post-Minecraft world but Dwarf Fortress does not come from one. It predates, and was in fact a major source of inspiration for, Minecraft.
If we're talking about whether the highly obtuse ASCII version of DF should have monetized earlier we cannot point to its highly accessible direct descendant from seven years later.
With better games than Minecraft? Not many. Not many at all.
Any game that isn't a building game is immediately disqualified from consideration, since most games focus on you consuming level content made by others instead of expressing your own creativity, and no such game can be considered better than Minecraft. And Minecraft is simply the best building game out there, I'm open to suggestions but I've seen and played a lot of building / digital lego games and none of the rest can hold a candle to Minecraft balance of streamlined simplicity and creative versatility.
If you're looking for a game that is specifically about building and sailing battleships, or cars, or rockets, or cities, then there are better games than Minecraft. But minecraft is more generalist, you can build anything from cute cottages to digital computers in minecraft, it has the broadest general appeal of any building game I've ever heard of.
It was pretty obvious to me from the start, from the beta days in 2010 anyway, that Minecraft would be a massive success. Even in that early state all the elements were there to make it massively successful. And compared to other digital lego games at that time, it was hands down the best there was. I've seen Infiniminer, don't try to tell me that it was pure luck that Minecraft succeeded where Infiniminer languished in obscurity.
OTOH, if they would have asked money for it from the beginning, it may never have gotten as far as it did. The market for a commercial game with text graphics was pretty small even back in 2006...
Minecraft released in 2009 with a price of $13 a copy. How'd that work out for them?
I am a bit older as a gamer so to hear that "2006 the market was small" is crazy to me! I grew up playing MUDs and believe me, the market for text games in 2006 was a lot bigger than it is today! From my perspective, monetizing the kids from the 80s/90s who loved text games with the best text game of all time as they turn 20s and 30s in the 2006... that's the best time in history to sell a text game.
I think that as part of DF being monetized, the graphics would be replaced, as it was for Steam, and potentially had it been done in 2D back in the 2000s, they could have envisioned and scaled into a 3D implementation by now. Who knows!
1/ they obviously didn't do it for the money
2/ Minecraft is an extreme outlier
3/ how many 2006 games with ASCII interface and costing have been successful ?
I get your argument about Bay12 potentially making more money had they commercialized earlier, but I think the comparison with Minecraft isn't so clean. DF is orders of magnitude less approachable than Minecraft, so there is not even a remote possibility of generating any kind of mass appeal to gamers.
The major lesson is "don't make indie games if you want to make money". There are 34 games released per day on steam. Most will have revenue under $1000 (and probably most will have revenue below $100).
Unless you have a talented team, marketing plan, and lots of capital you can burn for a gamble; or are willing to just do it for fun for years and don't care if it succeeds -- don't quit your job to make indie games. Otherwise you're playing Russian roulette. For every hollow knight, Dwarf Fortress, Celeste, there are 1000s of other titles you've never heard of.
To be fair, you'd have to somehow account for what percentage of those released each day are just shovelware crap. The actual "indie games" to look at would be the ones where talented people put time and effort into something. A vast majority of those will still fail, but then you have at least a true basis.
> Had DF monetized in 2006 instead of going free, and played the industry game as others do, I would not be surprised to see DF at $100M in 2023.
I didn't play DF in 2006 but I did play it first in about 2011, and can categorically at that point it was so user-hostile and batshit crazy there's no way the trajectory you're talking about would have been possible. Even just the normally-simple step of getting a copy of the game you could run was a bizarro-world nightmare involving multiple trips to the bay12 forum and searching for threads to find the download link etc.
2006 was pre-Minecraft territory. Monetizing DF at that point in time would have been highly unlikely.
Also the game wasn’t built yet. Maybe they could have monetized earlier than this, but what does it matter? Maybe trying to monetized earlier would have killed the project or resulted in a game very different from today. Either way it doesn’t matter: there are different paths to success and not every one of them is an option for every game. DF found one though, and that’s what matters.
Highly agree, if DF just came out of nowhere and launched their old versions before having enough cachet/community to get studios to help them get it polished, it would at best become a cult classic years later, but most likely just be completely ignored. Without all the slowly increasing cultural awareness and community building leading it to becoming de facto “the most complicated game that is also a simulation and art” it just looks like a really complicated, technologically anachronistic game for neckbeards. Which it still is, but it’s had time to build awareness that it’s also exceptionally interesting, and that that niche isn’t necessarily a bad thing.
Also they wouldn’t have been able to keep it a single-person programming project focused almost entirely on expanding the core games features and simulation aspects if they released earlier. Way more time would have been spent on productionization and getting it good-enough rather than done, and more hands would be involved, making it less of a passion/art project of an inventor, and just a regular old commercial endeavor.
DF became popular because of the stories it created - and being free helped that expand because people could try-before-buy.
As it was, the risk would have been way too high for most people to pay tenbux or whatever BEFORE playing it (many have "donated" way more than that after playing).
Also being free let the developers work on whatever they wanted to rather than the "I paid for this and this bug happened therefore I'm going to yell about it on the internet".
I work in enterprise software, the pressures from paying customers are immense. Sales loves to short circuit processes to get new features in front of the line. Large customers love to short circuit the process. Eventually your processes become customer driven rather than creation driven. And that's fine if you want to make money, but it ain't great if you want to create.
The free part was super important because, if the buyer doesn't know much about the game, those text graphics are a huge deal breaker when combined with payment.
There are many games that monetised in 2006 and are not worth $100M.
The indie gaming scene in 2006 was almost entirely freeware with a few exceptions. Indie games as a steam category - let alone industry - was unthinkable. Monetisation was essentially building a flash game to sell to an ad network, there's really no amount of industry game playing that could have been done.
> The fairytale ending is reality, but you didn’t kiss the toad.
Some philological pedantery: In the canonical Brothers Grimm version of The Frog Prince, the frog does not turn into a prince when kissed but when smashed against a wall.
I'm not sure if you can call Brothers Grimm version "canonical" as from my understanding all they did was document in writing single versions of already well known folk tales that were carried through generations by oral memory. Many of which had many different versions depending on who told the story. So I'm not sure you can use the word "canonical" in this case.
The word has meaning imo. It's used to seperate the fan fiction and maintain consistency during world building. It's quite important for the popular stories of our time, Star wars and the Marvel cinematic universe.
I know some people hate those franchises but like it or not, they are some of the biggest mythologies that came out in our time.
History? In the days before books were common stories were not told from written pages but memory. This allowed stories to change and adapt on the storytellers whims (or forgetfulness). Eventually they were ossified in books, of which many people think they are the 'canon'.
The latest commit where the master branch finds itself in isn't any more "true" or genuine than the first commit in history, nor the commits on a fork, nor the commit on branch-1, nor the commit on branch-2
If it's all fiction anyway there is no truth out there for the map to be compared against. All permutations are real, all maps are the territory
I do find it amusing, however, that depending on context people consider the first commit in history to be canon, while on other cases they prefer the newest commit approved by the Authority™
That's relevant to the Bible, or Shakespeare, or the MCU, because those works' authors have authority in a way the Brothers Grimm do not have authority over folklore.
There are multiple competing authorities, but they are absolutely authorities, and their versions of individual texts are extremely close to each other.
Most notably, for the actual list of books there's the Catholic Church for the Catholic canon; the Masoretes for Judaism; Synods for the Greek Orthodox canon; and a broad consensus in the Protestant community.
For the texts themselves, the Septuagint and the Masoretic text are the only game in town for the Hebrew Bible, while the Greek texts of the New Testament were very firmly set in stone by the Imperial Roman Church (as central of an authority as it gets).
Note that some of these authorities (the Masoretes, the Imperial Roman Church) do not exist anymore. THat just means that canon is unchangeable, it still exists.
That is not the authority that I meant when I used the concept to explain how the Bible's canon is based on the existence of authoritative texts endorsed by authoritative sources.
You can make an edited version of the original Hebrew and Greek scriptures with whatever changes you want. But no one will agree to call it The Bible, because it does not match the text endorsed by the original authorities.
Same as how there still exists a Sherlock Holmes canon based on Doyle's work, even though you can legally write whatever you want even in contradiction to that canon.
But as he fell, he was changed from a frog into a handsome prince, who then had to make death saving throws for a few rounds but luckily the princess had Lay On Hands, and so they lived happily ever after.
Followed by: But, as he fell, he was changed from a frog into a handsome Prince with beautiful eyes, and after a little while he became, with her father’s consent, her dear companion and playmate. [1]
Grimmsc version is a bit weird then, because there is a plausibly-sounding "freundian" interpretation of the most common folklore version, in which a frog turning into a prince after being kissed is a thinly veiled metaphor for fellatio.
That said, in the most common Russian folk version it's *Princess* Frog (Царевна Лягушка), and the metaphor is not working that well once again.
So very glad to see this as a long time DF player. The new version on Steam is an incredible leap, and it's clear the only way this would have happened is with a real partner that could help them bring the game to a bigger market. Excited for the next 20 years of building fortresses with my depressed dwarves.
Sounds like Fun was had! I’m guessing you were going for a proper waterfall? In the future you could try a Dwarven Mist Generator. I like to put them above high traffic areas so everyone has to pass through it constantly.
That's incredible! Congratulations to the generous indeed. I played the old game many years back and was once also a monthly supporter, but these days I have less time to play, so I bought the Steam version primarily to support Bay 12.
It's so nice to see such great support. I wonder what the monthly level of income from Steam will be in the future.
I'm super happy for these guys. They really have struggled with donations for many years. It's nice to see them get the bag.
For those commenting on the sales drop off, it is a problem for AAA titles that a half-finished product gets sold to the public and then abandoned because it's easier to just move onto the next thing.
But I want to counter that with the story of No Man's Sky. I highly recommend the Internet Historian video on it [1]. The short version is for various reasons the game over-promised and under-delieved on launch but Sean and HelloGames have now spent years continuing to develop the game with free and significant updates. I can only imagine this still drives sales growth or it wouldn't be sustainable. But it's really repaired HG's and NMS's reputation. NMS has a real cult following now.
And then of course there's Minecraft whose long tail of sales is truly mind-blowing.
I haven’t played it, and I have no doubt it is an amazing game I would enjoy. But how do people have time for all these games? There are so many compelling games out there, each demanding hundreds or thousands of hours of time to fully enjoy.
Every now and then you find some hours to play. I play games maybe less than an hour per day, some free days I play more, with my most played game being Factorio with 175 hours, and I'm proficient in it + feel like I've spent a lot of time playing it, but I also owned it since 2015 or something like that, so 2922 hours available, 175 spent on Factorio so around 0.06 hours per day, calculated that way.
I tend to prefer "complicated" games that require some sort of time investment to figure out (once figured out, they don't remain as fun for me), but there is no game I've spent more time on than Factorio, and it's "just" 175 hours over the years, which is very low if I compare it to others.
Summary is, you don't have to spend 100s/1000s of hours in any game in order to fully enjoy it.
I hate that I feel guilty for playing games which require a time investment. Factorio is exactly the type of game I would like to play.
However I'm "stuck" playing games with short matches and no long single player games. It's easy to put 5 minutes into Rocket League because it feels like just a burst of gaming but then you can do 20 games in a row and still put in an hour.
Don't feel guilty! At this time of year I can only find 30 minutes free here and there, and I'm currently playing Captain of Industry (similar to Factorio), the most important thing is to keep a text document with what you are doing, so you can iteratively get there across days, rather than just in one day. Basically a backlog for your own quests in the game :)
I don't even have kids and I have plenty of time so I need to get my mindset under control lol.
TMI here but due to a feeling of wasted potential because of inattentive ADHD (treated but still), I have guilt when I procrastinate and am not productive and long games don't allow me to lie to myself about it, if that makes sense.
Gaming isn't procrastinating on other stuff necessarily, it's just the way I feel often.
I definitely (and many others, particularly here on HN) feel you, I sometimes end up in feedback loops where I start gaming, feel unproductive so I start working on some side-project but feel like I should be relaxing after some minutes so I start doing something else, and the cycle begins again.
You should try “staying up late”! You wait for everyone else to go to sleep and then you get a solid 2-4 hours to fully immerse yourself in glorious escapism. The next day, in the midst of suffering from sleep deprivation, you wonder why in the hell you did that and that tonight you will be going to bed early! (And then you don’t)
No children, or children who are old enough, probably helps. As does not working more than 40h a week (or even less). In my case, it’s also home office (= no commute) that helps.
As a general rule, people carving out hundreds to thousands of hours for a game are not enjoying 'all these' games, they are enjoying specifically that one and maybe one or two more if they want a change of pace.
Also, I personally find that games like DF lend themselves well to having a podcast, audiobook, or twitch stream open on the side. It isn't like a big setpiece voice acted narrative game that demands your full attention.
I was about to throw some money down their way, but apparently the steam version does not work on Mac M1/M2. I'm too young/uninitiated/whatever/visually_oriented to play the older version.
I bought the Steam version and run it in Wine on both an Intel and M1 Mac. I ended up refunding the Steam version and bought it on itch.io so I could just directly download the game files and updates instead of having to mess with Steam inside Wine (the Mac Steam does not allow you to download Windows files). Also you get a Steam key with itch.io, so when they release a proper Mac version I can add it to my library still.
But you need the actual files downloaded obviously. So you either have to have a PC where you can download the game files from Steam (Windows VM works too) and then copy over to your Mac. Or you can buy the game from itch.io (it's the same but you also get self-extracting archive + you get a Steam key as well) https://kitfoxgames.itch.io/dwarf-fortress
I assume that's also post all the expenses incurred (and profit share) by their publishers, who I believe also did quite a bit of work on the Steam version. So total Steam revenue should be a bit higher than $10mil.
You can say that, but really what they moved to is creating a platform that saved PC gaming. I can't imagine where we would be at without Steam.
There would be 20 different platforms we would have to install full of bloatware garbage and everything would be horrific as all fuck. Indie games would be having a much harder time, because sure there would be other things out there but again it would be so split that it would be hard to even hear of games to get traction. PC game prices are a damn steal, which helps everyone because at $15-20 I will buy way more than $50-$60 a pop. Every platform would have it's own bullshit DRM that would make things a nightmare.
Steam allows offline play, family sharing.. it just freakin works without being fancy bullshit.
So yeah, they certainly make money. But I can't thank them enough for what they have done.
The Steam app itself is also pretty great. I didn't fully appreciate that until the Epic Games Store, which runs about as well as a sloppy Javascript app from ten years ago. It's been in the same dire state for years.
Meanwhile Steam is pretty quick, the interface is well organized, and there are tons of useful features from controller configuration to the mod workshops.
I definitely agree that there's an alternate Steam-less timeline where major game publishers migrate entirely to consoles, as they were threatening to do in the mid-2000s. We'd never have all these PC ports from Japanese developers (from Dark Souls to Persona 5) without Steam.
without Steam there might have been 20 different platforms, but another possibility would have been Microsoft just fully taking over the space and treating the PC like a very expensive Xbox. Even with Steam’s success this has always been a possibility. I think Steam’s massive investment in game compatibility for Linux (ie: Steam Deck) has been an amazing counterbalance to stave off the potential of MS monopoly on the PC gaming space and I am so thankful for their continued support of PC gaming culture and tech.
Given the state of the "Microsoft Store" on windows... dear lord we are lucky that is not the case.
I do love Microsoft to a large degree for a lot of things.. but holy shit they suck ASS at things like store fronts in their own ecosystem. I have barely ever been forced to use it, but it literally did not work or gave me random cryptic errors when I did.
I'm a bit addicted to Rimworld when it comes to this genre, but I bought DF just to support the OG's - plus I wasted 4 months on a terrible contract job and the only thing that kept me sane was playing Liberal crime squad in the background.
Yes. There are ways they could have minimized that payment but it doesn’t seem that the team is primarily money motivated in the first place, so may as well just make the process simple and pay up.
What ways are you thinking of? They could have incorporated and posted losses for 2? straight years before the IRS started auditing; those losses could have been deducted against this revenue. What other angles are there?
Set up an offshore that owns the IP and pay a licensing fee to the offshore? Licensing costs would then reduce net profits and likely also taxes, right?
Yes, but as income at a more reasonable tax bracket. By default this kind of windfall is taxed the same as someone who makes that much money every year for years; all those shenanigans let you get taxed as someone making a smaller income for a longer time.
Plus, over that longer time you can list a lot of dual-use purchases as untaxed business expenses.
Fairly certain they already are incorporated. If you pay yourself with dividends you're paying corp tax + long-term capital gains, so 8.7% (for a delaware s-corp) + max 20% (less if they pay themselves minimal salary I believe) for a total of 28.7% (vs 50%).
In the US, only if your corporation is a "C" corporation. For an "S" corporation, the income, distributed or undistributed, is treated as income on the individual tax returns of the owners. So if you and a partner own an S corporation, and you make $800k in net income and pay yourselves $100,000 in salary each, you would pay yourselves salaries (SS & Medicare tax on that portion) and then income tax on the net income + salary, so you would owe about $156,000 in income tax, plus whatever your state charges, and you would owe about $8,000 in SS+Medicare (because the company has already paid the other half). Rough numbers, of course. This would asymptotically approach 37% of income as your income increases (plus state tax).
If we assume their previous income was covering their expenses (a reasonable assumption for a 18 year old company), the $7M from Steam would be pure profit.
Now I'm not sure about Washington (?) tax rates, but just for comparison: in Germany you would have paid about 35% taxes on company profits, and another 20% income/capital gains taxes if you just pay it all out to the owners. Not that this is the smartest choice, at that point you play games like keeping money in the company to spend on a company car. But if you don't care about optimizing your taxes 50% doesn't seem unreasonable.
Didn't Kitfox games did a lot of work on the Steam version (I assumed art, UI etc. were not done by Bay 12 games)? They must have incurred some expenses.
With this kind of money, you can absolutely get someone to do all the work you need to make your tax mostly disappear. Heck, they probably find your number and call you directly, you would only have to say "Yes, I want to save a couple million dollars".
I'm not saying it's good, but at the moment it's just so easy, risk-free and completely legal.
> With this kind of money, you can absolutely get someone to do all the work you need to make your tax mostly disappear.
Taxes can be deferred or distributed across a number of years with various structures if you’re willing to put that money into a business structure and pay it out to yourself over time (which they absolutely should)
But there is no magic wand someone can wave to get the money into your bank account and make the tax bill disappear without other consequences and/or breaking the law.
Note that in these situations, people absolutely will come out of the woodwork and try to talk you into various schemes to dodge taxes, but that doesn’t mean they’re legal. Plenty of stories about people using dubious structures to avoid taxes and then getting crushed by the IRS when they get around to auditing the situation.
The thing is that this is the first time they got this kind of money. And it was unexpected, since Dwarf Fortress sold their 8 month objective by the second week. So they weren't in a position of knowing who and how to call that someone.
If you add up all of the jurisdictional taxes, 50% is typical for high earners. For instance I pay 38% fed and 10% state here in Oregon.
Sketchy dudes will talk about various schemes to lower taxes but call it what it is: unethical tax avoidance. The real issue we should be talking about in the US is how poorly we use that tax income. Our built environment is absolutely dreadful because of our car dependency and we have little to no social benefits despite having massive tax income because our health care system is parasitic.
Sketchy dudes talk about it but can't actually provide solid examples and numbers that don't involve things like "invest all your profits in a failed startup so that it's all a business expense".
Look at the actual income tax paid by professional athletes; if anyone knew how to do it it would be them.
As an estimate, it will do the job. It’ll be wrong, but not horribly wrong, and if you had a windfall like that then planning based on a conservative estimate is a good idea. If you estimate your taxes high, then you get a pleasant surprise when your accountant actually crunches the numbers.
If they use the money to fund retirement they potentially pay taxes twice: once on company profits, and once for the natural person who gets the money.
Are these sales numbers or how much they make after everyone else gets their cut? Is that what they mean by "taxes"? Steam takes 30%. The publisher can easily take 50%, but they may have negotiated better terms due to the funds they put in on their own and that it's an existing game.
Really interested to see what their revenue numbers will look like when sales normalize. It will probably take a few months but will they be at 100K a month mid year? Really interesting what the staying power of DF will be now that it is more accessible.
They are absolutely continuing to work with the UI team (who, as far as I understand, are just modders doing a bunch of discounted/free design while Tarn still does the coding). Getting the Steam version working with adventure mode is what they're working on now.
(Their new developer seems to be more of an old-school low-level hacker working on performance and systems.)
That's really great news! I am so happy for them and everything they have accomplished and will continue to accomplish. It's truly an inspiration to me.
They have a roadmap on their site. At the historical rate of development, the game will continue to be developed by Toady until his death, upon which (barring suspicious circumstances) the game's source code will be released.
Keep in mind that Steam takes about 30% of all sales. But good for them! 20 years of work, and their game appearing in the Museum of Modern Art, should definitely result in some financial security!
It's funny how, if those tax dollars were spent properly (helathcare instead of missiles), the brothers wouldn't have needed to make the Steam version of the game.
You repeatedly posted flamewar comments to this thread. You've been doing that repeatedly in other contexts too. Moreover, we've had to warn you more than once before.
Swarnie probably works in the defense industry. Buying missiles pays his company who pay his salary. Of course, the government takes some of that salary back as income tax, at which point it starts to become complicated.
And that's for regular releases. I'd be surprised if the initial drop wasn't much stronger for something that has already been a living legend for many years. That initial wave of "oh, I've heard so much of them, probably won't play even with a graphical mode, but I still want it in my library" is one of a kind. The long tail will probably be much flatter, but only compare to regular releases once you separate out everybody who bought in roughly the same way those nice hardback Shakespeare collections are bought.
What issues were you having? I run it on a steam deck just fine all the time. I guess you mean you don't want to run on a compatibility layer? I haven't noticed performance issues if that's your concern.
Most games are developed, a bit of effort/money directed on promotion/marketing, dropped, and then onto the next project. So I think these numbers are more of a reflection of developer than consumer trends. Games that are developed in a different way often show [very] different trends. One of the most extreme examples I can think of is Kenshi. Its SteamDB [1] numbers are something else! It was made by one guy who worked as a security guard to make ends meet while making it.
Of course making games has to be a labor of love though. I mean the guy had double digit player counts for years, and sales likely reflective of that (if not worse), while he continued to keep developing a game that he was clearly building for himself at least as much as for "the market."
And as for Dwarf Fortress, it's kind of in a mixed zone, because it got the sort of big marketing/promotion push that's usually reserved for "fire it and forget it" type titles, and the consequent drop in players it entails as you ended up doing things like attracting players who thought they were buying 'The Sims - Ultra Detailed Dwarven Edition With Retro Graphics' and quit after 30 minutes. But I really don't think that's the developer's plan. So I suppose we'll see!
As indie game dev myself I totally agree with you, but while DF is special it still had usual marketing compaign and that big release date. My guess it will likely perform even worse than projection since a lot of people who played DF for years bought it more like a donation. E.g more of people who bought it wont actually play it much and game will game less of natural social marketing out of these sales.
Again I not saying that Toady gonna abandon the game, but sales will go down in coming months and it's very unlikely that in coming years they'll get another $7M of sales in one month.
Peak is always during launch day, then there's a long tail, and very successful games might slowly rise after a couple years and surpass the launch peak.
While Dwarf Fortress has had a fantastic launch, it will never be a wildly popular game to increase its player base by much more than its release, especially in the oversaturated gaming market of today.
Yeah there's always a fairly substantial drop-off. Dwarf Fortress[0] dropping by half from 14k on average down to 7k one month later is roughly the same as Elden Ring[1] (522k to 211k) but on a slightly different scale
If you would like to hear an analysis of these two trends, Jason Rohrer goes over launch day sales for a game he released in 2014 and 2018 in this gdc talk [0].
I was confused initially as well but you are reading it backwards. They were getting ~15k a month before launch and that jumped to 7 mill after launch. I am very interested to see what it normalizes to. 100K a month? several hundred? 15K a month again?
I disagree vehemently and violently with this suggestion. Dwarf Fortress's charm results from human-crafted procedures interacting in unexpected and fascinating ways.
If ChatGPT (or other AI bullshit generators) were used instead, it would change the experience entirely.
You gotta admit DFs name / description generation is just gobbledygook most of the time. Tastefully applied, AI bullshit generators will do wonders to readability.
What do you mean "instead"? A custom GPT would have to be crafted for this game by humans anyway, and used to augment the human-written content. Much of this game's gameplay is emergent and hard to predict using deterministic algorithms.
Actually I think this might be a very useful addition to Legends mode. Right now it is pretty tedious and difficult to extract meaningful narrative from what is essentially a log dump, but if there were a LLM trained to weave those dry tomes into wild stories that would be pretty neat.
What does NFT has to do with anything? What's with people on this site thinking one of the biggest tech revolution of our lifetime is the same as a scam that has no utility whatsoever?
It could also have completely flopped though, since the classic version is free and for die hard DF fans who know all hotkeys inside out there's little actual reason to switch to the Steam version.
But they did a really good job making the game approachable to newcomers.
> for die hard DF fans who know all hotkeys inside out there's little actual reason to switch to the Steam version
They made the game so much more playable it's hard to understate. We're not even talking mouse vs keyboard here. They made one of the core mechanics (labor assignment) go from something that essentially required a third party tool to manage to something that is trivial to manage in its vanilla state. Sure it took some adjustment for long-time players and some prefer the algorithms used by those custom tools, but those tools are being made available.
> It could also have completely flopped though, since the classic version is free and for die hard DF fans who know all hotkeys inside out there's little actual reason to switch to the Steam version.
For diehard DF fans "supporting the creator" is a large enough reason, even if they never intend to play the steam version.
Many of the other big classic style roguelikes on Steam, like ADoM and ToME, also have free versions available. And those games also do excellently (though nowhere near as well as DF is doing).
Games are still such a refreshing change from the MBA driven coercion in much of other business, and especially tech. Make a good product, and people will buy it. And appealing to a micro-niche is still enough to make one a multi millionaire.
I've been thinking about this a great deal lately, but in other areas of content creation like YouTube.
I'm so tired of the YouTube thumbnail and clickbait headlines and predicable content on YouTube. Every once in a while I'll stumble on a niche that rejects this with very clear explanatory titles, super long play times, and informative or relaxing content. "walking through a city without narration" is one genre that features this, or the whole sleepy-time sounds genre. Unarrated full game playthroughs as well.
I'm dipping my toes into video content creation and I'm curious about taking a different approach than the one designed to play on the algorithm and get huge view numbers. I remember Tim Ferris writing that niche products is what people should target. Back in 2013 he was writing that indie entrepreneurs should never sell something for less than 100$ because you can't compete on economics of scale and thin margin. I wonder if that's what a lot of YouTube is doing, and whether a niche angle could be possible.
Basically, is it possible to make content that's very niche but wouldn't do well in the YouTube algo because it lacks clickbait headline and someone making the :O face in the thumbnail, and rather than try to monetize through huge view numbers and ads, instead using YouTube as a sort of side channel towards whatever other services or products you provide? I'm not interested in monetization but for me I make motorcycle videos, perhaps a shop I run or a tourist service I provide: what could possibly be more niche than "hire me if you're interested in a full service motorcycle tour in Taiwan" lol.
Coming back to games I have similar ideas about that, a lot of us are sick of AAA and refuse to touch phone games. I'm not interested in gambling or psychological head games. I used to be an avid battlefield fan and haven't touched the last two. I probably am done with Bethesda. Now I only play indie games. So is there a market for people like us that indie developers can target? I'd happily have paid a hundred dollars or even more for a game like dwarf fortress. Given the hours of enjoyment I get, compared to the cost of a vacation or something, by some algorithms DF to me could be worth thousands!
And Minecraft blows all of them out of the water. That's not the point here. The point is that Dwarf Fortress has been a labor of love for two decades and it's nice to see these guys get some solid financial security for all that hard work.
