alt Hacker NewsWhat do you think the profit margin of canned goods is? They make cents on every can. Something like 2-3%.
The video games industry is filled to the brim with gatekeepers who take their cuts. Valve takes 30%, just for their store. Publishers start at 10%. Your engine might take a cut.
Estimating that Stardew Valley, the big success video game with the lowest overhead bar none, has made 10% profit might be too low. 20%? Might be high.
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He used this open source engine, it is free. He is almost certainly getting between 60-70% of revenue after distribution fees. His only other expenses are taxes and the other devs he employs and he was solo until the game made like $100 million. Most of the copies sold for $15 so it seems fair to me to say his companies lifetime revenue is close to $10*number of units sold which is close to half a billion dollars. And since the companies expenses are effectively zero profit is the same. If he’s smart with taxes he’s paid 15% corporate tax rate then 15% capital gains rate which comes out to just under 28% so his own lifetime earnings is probably around $360 million.
> What do you think the profit margin of canned goods is?
For whom? The manufacture? It's closer to 10-30% for the manufacture (lower for white label goods, higher for "premium" brands). And it's higher for products that enjoy monopoly status.
For retailers, it's 2-3%, but retailers also get products on loan and negotiate various agreements that help cover the costs of displays, shipping, marketing, and wastage. So even that small percentage margin is skewed a bit.
There's a reason that retailers and food manufactures ("canned goods") were some of the largest American companies prior to technology taking off. It's a highly profitable industry.