30% off the top for most stores (Valve/Steam, Apple/iPhone, Google/Android, etc), then around 50% taxes between state, local... some fixed expenses and overhead. It's probably well under 20% in the bank after all is said and done. That said, it's still a lot of money.
The highest marginal combined tax rate in the U.S. is 51.8% (37+10.9+3.9, assuming an NYC address).
However, this is business income, not compensation, so it's taxed on a net basis, not a gross basis (even though it may still be included on his personal income tax return). This means his taxable income is the amount left after taking into account the retailer's fees, subcontractor costs, etc.
So, for example, if he made $100 selling games, $30 would go to the store. Assuming no expenses and overhead (since we have no data to come up with those numbers), the remaining $70 would be subject to tax. Assuming he lived in NYC, he would pay up to $36.26 in combined taxes (not taking into account the SALT deduction or the progressive tax rate calculation), for a post-tax net of at least $33.74. Assuming he lived in WA as other commenters note, he would pay up to $25.9 in federal taxes, for a post-tax net of no less than $44.1. (But note: Washington has an excise tax on businesses which is based on gross income...)
Stardew likely qualifies for the reduced store cuts. Steam _lowers_ the percentage for a game when it sells high. Still somewhere between 10 and 25%, though.
Generally, the Steam cut is considered “fair” for Indy devs. The benefits of steam (discoverability, massive audience) generate more sales. My Indy dev friends are not upset about the steam cut at all.
This, however, is one area where eventually Epic Games shines — they take a much lower cut and if they increase in popularity with gamers then steam might be forced to lower their share.
This is basically almost public information: 25% cut on earnings between $10 million and $50 million.
Yet most likely very big share of sales is well below $10 let alone $15 due to sales and regional pricing.
So yeah I doubt numbers anywhere close to those adverised.
> Generally, the Steam cut is considered “fair” for Indy devs. The benefits of steam (discoverability, massive audience) generate more sales. My Indy dev friends are not upset about the steam cut at all.
Steam no longer provide any discoverability on its own unless you either bring your own community ftom outside or spend $10,000-100,000 on marketing to gain wishlists.
If you're small 2-10 people indie gamedev studio and have external funding Valve will earn more from your game than you.
In this case, as a solo dev, it's probably quite justified to be honest. I doubt ConcernedApe would have really been able to continue solo-ing it with this level of success if he also had to maintain distribution channels, sales/returns, marketing, legal stuff on a global scale.
It's probably the big name studios who already have entire departments to do that kind of stuff that feel they're being ripped off.
Actually the more you earn the worse the deal is - he's probably paid about $100 million for what amounts to $100,000s of labor if he paid people to take care of this stuff, and some (low) millions in taxes collected for various jurisdictions. Dude's personally bought Gabe a ship in exchange for some accounting.
When you're talking millions in income it can be that high depending on your state... IIRC, as peer comment mentions, Washington doesn't have state taxes, you still have a nominal rate for Federal at 38% though, and I'm not sure about sales, property or other taxes, which again, likely approach or exceed 50% against total income.
Just checked, seems it's now 37% for the top federal bracket... for what it's worth, I think it's amoral to tax more than half of what someone makes, regardless of how much they make.
