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In January of this year, mabbees and I founded Studio Terranova as a tech and games cooperative.
Our goal is humble—to do design and make games sustainably both financially and mentally. We want to continue to make things for a long time.
In 2023, we showcased Terranova at BitSummit and learned two things:
- Players who love Terranova really love Terranova, and
- Pitching gay stuff, especially narrative gay stuff is very difficult with large-scale publishers
When we decided to publish Terranova, we did it as a self-published experiment using part of our income. We started development in 2019, and released in 2022. The alpha version was released in 2021.
In 2021, we made $182 in presales and in 2022 about $3,785 USD in sales, which was enough to cover the money we spent on commissioning artists and licensing musicians and pay ourselves an annual salary of ~$300 per person.
Here's the breakdown of our financials for 2019-2022:
- $3,785 (Steam) + $182 (itch.io) = $3,967 in revenue
- $2,165 spent total on commissioning artists and licensing
- = $1,802 profit, divided between CJ and mabbees (2), divided by the number of years in development (3) = ((1,802/2)/3) = $300.3
In my opinion, looking at these numbers made me see Terranova as a small success. Why? It's not wildly popular. Hell, we haven't even topped 50 Steam Reviews.
(If you've played the game and give us a positive review, we'd really appreciate it!)
It was successfully self-funded. To put it in perspective, 50% of indie games never generate enough revenue to cover costs.
We had a lot working against us:
- Terranova doesn't appeal to major audiences
- Developing the game night and weekends while working 40-hour a week jobs
- No prior experience publishing a game or being involved in the game industry (@mabbees had been involved in games for a hot minute, but almost all of our knowledge is self-taught)
So the fact that we made enough to cover our development costs despite these challenges gave me hope.
We're not yet in a position where we can pay ourselves a living salary, but we're happy to continue working to continue to self-fund. So, we had an idea—instead of nights and weekends, how about we now work four days a week and dedicate a full day to game development? Any revenue from the games we sell goes into our common pool of resources to fund future games.
To make a common pool of resources that could be drawn on by mabbees and myself, making a business entity made sense. We could write off business expenses and save money on taxes.
On the other hand, paying company insurance and navigating systems meant to be navigated by companies and not by individuals makes our work more complicated.We're in the stage of "trying it out"—if we find we're saving more money than spending it as a legal entity, we'll continue slowly growing. In the long term, we want to have more than just us as employees who cooperatively own the company.
That's the dream, anyway. For now, it's navigating a lot of legal, tax, and financial documents and laws, and with the help of our tax lawyer and accountant, we've been doing all right. It's been humbling to realize that no matter how much we think we know about one subject, we're complete novices in another.
I'm also volunteering to help out Fujocoded with their legal documentation to the best of my ability. I'm not a lawyer, but I've been going over legal contracts, especially ones that are written for cooperatives. That's been helping me learn and grow my own legal and business sense.
Since we're not experts, I'm reluctant to write any "how tos" on the subject—but I can talk about my own experience navigating these waters. I'm happy to share what I know, especially if that means more game or tech cooperatives can build themselves up from our learnings.
Stay tuned for more articles on running the business end of a cooperative; and in particular, one started in Japan.