CoG/HG business model

General
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I can’t speak for other Hosted Games, but I can say for sure that Lords of Infinity had five-figure overhead.

It costs a lot of money to copyedit 1.6 million words and the cost of that alone would have been enough to put self-publishing out of my reach financially. That, on top of the technical support and free marketing reach I get (both directly and from the spaces Choicescript has cultivated) makes me think that my share of revenue is pretty fair - even before the fact that being on this platform has given me professional opportunities which, quite frankly, has offered a lot more direct benefit to my career than my university degree has.

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For the most part I don’t want to weigh in too heavily on the discussion here, for a variety of reasons: a lot of what I would say has been said already, some of the financial details being asked about here I genuinely don’t know, and some have not been made public information. Of the team, I also do some of the least work specifically related to HG production, which is largely what’s being discussed here. But to answer this question in particular:

COG has six full-time people on staff. Games, even profitable ones, make most of their money on their initial release and trail off noticeably after. Salaries are paid annually, regardless of what recent big releases we’ve had. Even several hundred thousand dollars will not cover full-time livable salaries for six people in perpetuity.

I should also highlight what @Cataphrak mentioned - when we’re talking about paying people, it’s not only employees, it’s contractors we work with for copyediting and various other things, also often on a regular basis and for long projects.

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Thanks, I hope this helps people have some perspective. One game can’t be expected to pay for six full time employees in perpetuity but just those three evidently go a long way in doing it for a while.

I think people assume that because writers can’t write full time, that there’s no money to be made at all. In some cases, that’s not true. It’s possible CoG has made a million or more just from the Wayhaven series but I’m the bad guy for even suggesting royalties could be a tad higher

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I suppose it’s possible, but doing some back-of-the-napkin math, I’d be surprised if it did.

The omnibus lists just over 20,000 ratings for Wayhaven 1, which has the highest number of ratings in the series. The full prices for books 1, 2, and 3 are $7.99, $8.99, and $11.99 respectively.

If we assume 30,000 people paid full price for all three books, (30000*(8+9+12)), we’re at $870,000, not factoring in taxes, store cuts, or discounted pricing, while assuming the true number of Wayhaven purchasers is off by 10,000.

On the flip side, it would cost $2,160,000 to pay 6 people $60,000 a year for the 6 years (in March) Wayhaven has been out. So I doubt

Meanwhile, I’d guess the floor for Wayhaven’s revenue is around $220,000.

Omnibus ratings imply Book One sold at least 20,367 copies, Book Two 19,799 copies, and Book Three 7,693 copies. Using the lowest possible price points (which, AFAIK are through Steam @ $2.99, $4.89, and $7.91 src: ITAD ), it comes out to (20367*2.99) + (19799*4.89) + (7693*7.91) = 218566.07 or around $219,000.

Not saying royalties should or shouldn’t be higher, to be clear; I think others are a better judge of that. It’s just, I see some numbers, I add them up.

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That is some…fascinating math you’ve got going there. Let’s just say your assumptions are too far off for me to get into. For starters, Game 1 probably would have double the ratings it has but it came out in 2018 and the omnibus came out in 2019.

Saying 30k people bought the books is beyond laughable. Try multiplying that by ten times or higher

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This will be my last post on this thread, as I’ve made my thoughts known, and this is too distracting from actually working on my games.

But, let’s think of some numbers then.

Assumptions, based on my current knowledge:

-CoG had at least one full time staff working on HG. A second staff member oversees this person, dedicating 25% of his time (probably conservative estimate). This one time staff member is quite busy btw, dealing with me alone, with my updates to my games and answering my annoying emails already takes some hours every month, and I’m not the only HG author!

-The time spent by the developer (Dan) is distributed amongst the 3 titles.

-They all live in big USA cities (I know this to be true for at least one, possibly two of them)

-The company publishes 1 HG title per month (there was a time they were doing 2, but not these days, so let’s stick with that)

-Lets assume they all earn the same (unreasonable assumption, but I don’t want to complicate my equation)

So, you have, per month:

Overheads of HG= Salary of 1.58 people + remote office costs

I don’t live in the USA, looking online people say that 72,000 USD per year doesn’t get you very far in NY. But, if we assume that we get that the overheads of running HG is at least 10,000 USD per month. Probably more something approaching 15,000? I would reckon that my numbers are probably conservative, and I’m sure somebody will tell me that I’ve forgotten to include insurance etc etc

You can see this number in a different way, saying that it’s only the cost to publish the game, and then there are no costs (i.e. no annoying people like me taking company time every month). But, fine, then the cost of publishing a new game is likely at least 10,000 USD, more likely 15,000 or 20,000? Considerably higher than years ago, but hey they now have a real company with real full time workers, and there has been much inflation in the meantime.

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Where are you getting these numbers???

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Please read my post, I’m giving you the equation.

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Yup. Thing is 100% of a low amount without much of an audience is still going to be worse than having a cut taken from a larger audience. Although I wish the % was larger (don’t we all, I mean if you could earn even minimum wage writing it’s easier to justify putting aside time to work on a game), part of what you’re paying COG for is the intangibles like audience and brand. It’s hard to see the dollar value on it, but it’s still there. If you ever sell a company, things like brand recognition and customer base do factor into the selling point when it is being evaluated.

Although HG’s that don’t make it onto steam probably do have minimal expense as they don’t get copyedited or need the fee to put them on that platform and the author has to supply all the writing and artwork, there are also ones that basically make nothing and would count as a negative against the whole which is probably also factored in. The only real ways around that one I could think of would be to start putting minimum bars on what would be expected in terms of quality, themes, length, popularity on the forums before publishing etc. Or have a thing where the game needs to meet its expenses first before a royalty (at a higher rate) is paid out. (Probably the latter since if you could get the formula right 100% of the time, all COG games would be best sellers. You can guess, but it’s always going to be a bit hit and miss even with knowing what tends to work.)

I must admit I’ve occasionally played with the idea of cheaply independently releasing something or just throwing in the towel all together and making little free games just for funsies given what I write generally does poorly with HG’s audience and don’t make it onto platforms like steam anyway (so there’s no difference in things like copyediting for me), it’s getting harder to find people willing to give feedback via the forums as it is getting busier and more narrow in what a CSG can be (the community can be a huge benefit to authors and a big plus for staying if you are popular), and just to see if there is an audience out there that might be more suited to they style I write. But I suspect given I don’t have a fan base (no popular games and not enough money or time to do some serious adverstising or run a very active tumblr etc) it would probably do even more poorly (in exposure, not even talking monetary value here) than using the HG platform and would not be worth my while except as an experiment just to see what it’s like managing a release by myself (not from a profit point of view). I do have an itch page with free games and it’s really interesting where I’m getting directs from. A large proportion of those directs are from sites where people would probably be unlikely to pay or donate something towards a game. (Although this could also be because all the games I have on itch at the moment are free biasing the sample a bit.)

Some of the bigger names might go out on a self publishing limb (some already have tried it), but a lot of HG authors would most probably stay put if they were to continue writing IF games. In saying that, the bigger ones are the ones worth it for COG to keep around releasng more games instead of going independent, rather than the authors without much of an audience. I can see both sides of this.

And then you have academia where you don’t get paid anything and are lucky if they don’t ask you to pay them to sell your work. Gives you a different perpective on things.

Edit:

More royalties would definitely be a motivating factor for many. I think Patreon and Game sales are two very different things. Some people turn to patreon IF they are able to make money out of it as you’re not making anything at all when writing if you’re a HG author and then the amount you make afterwards might not even make minimum wage. So if you aspire to financially support yourself writing, people look for additional means of doing so. Problem is a large proportion of CS WIP games will get abandoned normally regardless of if they have a patreon or not. Authors don’t set them up to be abandoned, it just happens for a multitude of reasons. Playing devils advocate here, but I wonder if the time and effort requried to maintain that level of popularity with patreon rewards and tumblr posts actually contributes to the abandonment of of many of those games as the “one person show” writer burns out trying to do everything.

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My understanding of the omnibus ratings are they count every (logged-in?) player on every platform who has recently-ish completed the game and gone through the NPS survey (the “how likely would you be to recommend this title?” choice).

While they don’t capture every sale, they do reflect pre/non-omnibus sales, especially as older games are replayed. Given Wayhaven has sequels, I felt the likelihood of replays was quite high.

However, thinking about it some more, I agree the omnibus ratings lowball the true sales figures by far more than I was originally assuming.

Doing some more back of the napkin math, in March 2022 Fallen Hero had sold ~42k units. At that time, it was sitting at around 2,999 ratings in the omnibus; today it’s sitting at around 8,400. I’m going to assume this jump does not reflect FH1 going gangbusters in sales in the last two years, though I’d be happy to be proven wrong. For the sake of calculation, let’s assume it has sold 8,000 units since 2022.

Applying a similar ratio to the Wayhaven numbers (20000 WH1 ratings/(8400 FH1 ratings/50000 FH1 units)), it’s reasonable to assume around 120,000 WH1 units sold, if the same ratio holds (that may well be a bad assumption!).

In which case, $1,000,000 is indeed a plausible revenue figure, I stand corrected.

Feel free to quibble with any of these assumptions, it’s all reckless speculation.

Not sure about 300,000 though. Got any numbers to back that up?

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That would assume that each of the three Wayhaven games has more than doubled the sales-to-date of Choice of Rebels. Sera’s definitely outsold me, but I’m not sure she’s done so quite that stonkingly. :slight_smile:

I think Rebels 1 and Wayhaven 1 have sold at a similar price point, so the ratio of full-price versus sale-price games might well be similar. Because a lot of games do move during sales, I’ve ended up making about $1.15 per copy sold. Over the 6 year period Nov 2017 to Nov 2023, CoG has made about $150,000 off my game, the 5th best-selling Choice of Games title.

Double that revenue for all of the Wayhaven games and we’re getting into your ballpark, Sam. But I’m not sure that’s realistic.

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@jasonstevanhill says here

when I paid out December’s royalties (at the end of January), we crossed the $2 million mark

If we know whether this figure is monthly or yearly, then we know what CoG’s revenue is because royalties are 25% of revenue.

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That figure is life-of-company. 10 years of CoGs paid out $2m in royalties, so averaged out that implies about $600k revenue staying with CoG per year, not counting the games they wrote themselves.

Also not counting Hosted Games, and we have no real basis to guess whether the HGs have outgrossed CoGs overall. But they’d have had to outgross the CoGs by a pretty high margin for CoG to be swimming in excess dough.

Remember for your back of envelope math that the actual costs to an employer of each employee are around 1.4x salary, on top of the annual costs of running any business (the lawyers and accountants and software licences etc.).

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So I think you and I took different things away from what abbytrevor was saying there. What I took away is that arguments made that a game or game series made sufficient money to cover enough expenses that authors should get more money is inaccurate.

Ignoring the self debricating snark, at this point you are making assumptions. We cannot see behind the curtain and in the end no matter how much any collection of games has made I still feel that Dan’s statement about keeping HG and CoG at the same royalty rate makes too much sense. Any change that skews that balance risks collapsing the ecosystem of these platforms. If I was running a company with a business model like that between CoG and HG, I would find myself making that same choice.

While I know they could pay HG authors higher rates do to lower overhead. I know I would like them to pay higher royalties knowing they could afford it for the HG platform. I cannot say they should if they do it though just to make sure that CoG doesn’t suddenly look like the worse option. CoG in the end is the long term sustainability that lets HG exist.

The main question I ask myself to come to this conclusion is this: If authors slow down writing for CoG (because HG looks more lucrative or the company seems suspicious for offering higher royalties to first time writers), what happens to HG?

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100% of the people who buy the games don’t rate on the omnibus. Several times more people than have rated on the omnibus have bought the game. You have to contort numbers and make extremely innacurate assumptions to fit your narrative. Like The Nascent Necromancer has 1,200+ omnibus ratings and 6k+ total sales. I’m telling you, the Wayhaven series has probably sold nearly a million copies, NOT 30k, if it has 50k ratings on the omnibus, plus missing probably 20k from Wayhaven 1 coming out in 2018 before the omnibus

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Maybe so, and I’d cheer if it had. But at that point we’re talking each WH game selling almost 8x what XoR has sold over six years on the market. I don’t think it’s obvious that the gap between bestsellers is quite that big.

Edit: I see you’re basing your estimates on omnibus rating numbers, sorry for missing that before. But XoR has sold 21x more copies than it has omnibus ratings. I don’t think there’s a consistent ratio of ratings to sales.

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Nah, this is like what you were saying about losing thousands of sales from those couple of reviews when your story got a Steam release. This math ain’t mathin’. TPS has 4,200 omnibus reviews and has sold just over 20k copies altogether. And it did better as a Google standalone than even other games more popular than it was, based on the download numbers. Wayhaven 1 has sold quite a bit but nothing implies a million. I do appreciate your ardor in pursuing better compensation for authors, but it has to be approached from a realistic perspective. Not made-up numbers.

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It’s not vibes, that would be suggesting the best selling HG series of all time sold 30k copies. it’s clear from my own data, as well as all the data from authors on the forums who have shared about the numbers of titles they have sold, that games sell several times more copies than they get on the omnibuses.

Go and look around at the numbers authors have given here and then chck what their ratings are. It matches up almost every single time post 2019. Thousands of ratings means huge sales, hundreds of ratings means not so many sales. Wayhaven has 50k ratings despite coming out a year before the omnibus. Abbey confirmed Wayhaven makes hundreds of thousands of dollars.

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Want to clarify this right out of the gate: I was talking about financial figures more generally, nothing I’ve said is intended as a specific confirmation about the Wayhaven sales. I do not know what they are without looking various things up.

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Exactly, so your game has several times more sales than ratings just like mine and every single other author who has divulged sales info. You’re telling me nearly half million in sales, and even more in money for Wayhaven, projected off of 70k ratings, is not close to a million? You’re literally saying I’m making up numbers because you disagree with me. The crazy part is the author or HG can confirm that I’m correct if they want