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With this calculator a publisher / developer can find out if he should release his game as an exclusive for only one publishing platform or not.
The economic explanation
The idea behind this calculator is based on basic economics.
- We want to sell our product for $50 each.
- We expect to sell 100,000 units by using service A.
- We use a service A that takes a share of 10%.
- Service A offers us a one-time payment of $100,000 to use the service exclusively.
- Another service B takes a share of 30%.
- We earn $45 with each sale via service A.
- We earn $35 with each sale via service B.
- This means: even if service B takes a higher share, we still earn money with every sale!
The crucial point her is: once service B generated enough sales to top the bonus payment, we lose money. Let's continue our calculation:
- How many sales via service B do we need to top the bonus payment?
- Simple: divide the bonus payment by the profit for each service B sale.
- $100,000 / $35 = 2857.14
- If we round up, we have a total of 2858 sales.
- This means that if service B just generates as little as 3000 sales (which is like peanuts for expected sales of 100,000 units), it would have been better to publish on both services.
- After reaching 2858 sales via service B, we could earn additional $35 with every sale. Pretty dumb to say no, heh?
In some cases it may make sense to publish exclusively via one service. But in all other cases the decision to go exclusive is comparable to this:
How the calculator works
This is a detailed
- The user selects the platform he wants to exclusively publish to, and enters the expected sales, the base price for the game and - if applicable - a bonus payment for the exclusive publishing deal.
- Additionally, the user selects at least one other publishing platform.
Calculations for each platform:
- Total sales = expected sales * price
- Platform share = price / 100 * share of the platform
- Total platform profit = expected sales * platform share
- Publisher profit per sale = price - platform share
- Publisher profit total = expected sales * Publisher profit per sale
If applicable, the bonus payment is added to the total publisher profit.
The result is calculated by subtracting the acummulated profits for all platforms from the exclusive platform profit.
The result is a positive value if the exclusive platform generates a larger profit than all platforms together.
The result is a negative value if the exclusive platform generates a less profit than all platforms together.
Ideas? Feedback? Found a bug?
Feel free to contact me via Twitter or Reddit.
Developers may directly visit the Github repository and file an issue. (Yes, this calculator is open source!)