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A realistic indie-studio budget is a month-by-month cash plan, not a single development-cost number. List every contributor, when they work, what they are owed, when cash actually leaves the bank, which funding is dependable, and the month your reserve could run out. Keep the economic value of unpaid or deferred founder work visible without pretending it is cash. Then maintain a base plan and a stress plan that show what happens if a milestone slips or funding arrives late.
What a realistic studio budget must answer
Before pitching or hiring, your plan should answer five operational questions:
- What work happens in each month, and which roles perform it?
- How much cash is paid each month, including founder and team compensation?
- Which costs are committed, which are estimates, and which can be stopped?
- When will each funding source actually arrive, and what conditions are attached?
- In which month does cash fall below your chosen reserve or become negative?
A project total can hide a dangerous timing problem. A studio may have enough money for the whole planned game on paper but still fail if payroll is due before a grant installment or publishing advance arrives. Build the calendar first; sum the calendar second.
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No universal development price is valid without a country, team size, game scope, schedule, platform and employment model. Treat any number in an online “average indie budget” list as a prompt to check assumptions, not as a quote for your game.
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Define the plan before entering numbers
Choose the planning horizon
Cover the complete period from the first paid work through the point at which the game is released, handed off, or deliberately stopped. Include a post-launch window if you expect patches, certification fixes, customer support or marketing spend after release. A monthly model is normally detailed enough for a small studio; use weekly columns temporarily when cash is tight or a large payment is approaching.
Turn milestones into staffing events
Write the dates for prototype, vertical slice, production start, content lock, beta, certification and release assumptions. For each milestone, state the deliverables and the people required. A two-month art sprint, for example, should create two months of art labor in the cash plan rather than a vague “art” line spread across the project.
State allocation and status for every contributor
Record whether each person is a founder, employee, contractor or part-time worker. These categories affect payment timing, tax handling, benefits, intellectual-property paperwork and termination rights; do not substitute one for another merely because the hourly rate looks similar. Add expected hours or percentage allocation for each month.
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Keep an assumptions sheet beside the cash sheet. Record currency, working days, payment dates, exchange-rate approach, milestone dates, scope boundaries, platform targets and what “release” means. Every amount should have an owner and a date for review.
Put compensation in the model, including founder pay
Compensation is usually the largest controllable cost and the easiest one to hide. Create one row per person or role rather than one blended “development payroll” line.
| Field | What to record | Why it matters |
|---|---|---|
| Role and seniority | For example, technical director, gameplay programmer, environment artist or producer; specify level. | Prevents a junior, senior and lead rate from being averaged into a misleading figure. |
| Location | Country or region where the work is performed. | Pay, tax, benefits and legal obligations vary by location. |
| Worker status | Founder, employee, contractor or part-time worker. | Determines how cash and employer obligations are handled. |
| Start and end dates | Actual planned working dates, not just the project dates. | Short engagements and staggered starts change monthly burn. |
| Allocation | Hours, days or percentage of a full-time schedule per month. | Converts a rate into a defensible monthly amount. |
| Cash compensation | Amount and payment date. | Drives the cash-flow forecast. |
| Economic compensation | Full value of work, including deferred or unpaid founder labor. | Shows the real cost of making the game and supports later hiring decisions. |
| Deferral rule | Amount deferred, trigger for repayment and priority relative to other claims. | Turns an informal sacrifice into an explicit liability and decision. |
Separate cash paid from work performed
Use two compensation lines for a founder who temporarily takes less than the agreed value: cash paid this month and deferred founder compensation accrued. The first reduces bank balance; the second records an obligation or an explicitly agreed waiver. Never let zero cash imply zero labor.
Define the deferral trigger in writing. Examples include receipt of a signed publishing advance, a grant installment, a financing close or a specified revenue threshold. State whether repayment is a fixed amount, a percentage of later receipts, or permanently waived. Check the arrangement with a qualified local accountant or lawyer because tax and employment treatment is jurisdiction-specific.
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What the IGDA findings do—and do not—tell you
The International Game Developers Association’s Developer Satisfaction Survey 2023 Summary Report, conducted as a recurring survey with Western University, found that 41% of surveyed self-employed developers did not draw a consistent salary or wage because they often had to forgo payment to cover company needs. The same survey reported that 26% had no funding, 59% reported self-funding and 30% reported sales as a funding source. Respondents could report multiple funding sources, so those percentages are not mutually exclusive. An earlier 2021 survey reported that 38% of surveyed self-employed developers always forewent salary or wages to cover company needs.
These are descriptions of surveyed developers’ experiences, not a salary table, forecast or recommendation for your studio. Use them to justify making founder pay visible, not to choose a specific amount.
Estimate non-payroll costs by month
Add only categories that fit your project, then split each into a one-time amount, a recurring amount or a usage-based amount. Typical lines include:
- Software subscriptions, source control, build servers, hosting and analytics.
- Computers, development kits, test devices and replacement equipment.
- External art, audio, writing, mocap, porting or engineering contractors.
- Localization, accessibility work, quality assurance and user research.
- Legal, accounting, insurance, company registration and contract review.
- Marketing assets, events, public-relations work and community moderation.
- Platform submission, certification, ratings, payment processing and distribution costs where applicable.
Do not add every category by default. If your team creates its own audio and does not plan localization, those lines should be zero with a written assumption rather than an unexplained estimate. Conversely, a project with a console target should identify the relevant hardware, certification and porting work instead of hiding it in a general contingency.
Classify funding by certainty and timing
Record each source separately. A pitch deck can show an upside case, but the base cash plan should include only money that is signed or otherwise dependable enough to schedule.
| Funding source | Questions to answer | Base-case treatment |
|---|---|---|
| Existing cash or founder contribution | How much is already in the studio account, and on what date is it available? | Include the amount that is actually accessible, not a personal intention. |
| Grant | Is the studio eligible? What are the decision date, installment dates, restrictions and reporting duties? | Include only an awarded grant or a separately labeled probability scenario. |
| Publisher advance | Is there a signed agreement? What milestones, recoupment terms, revenue share, ownership and payment tranches apply? | Schedule each contractual installment on its expected receipt date, not on the pitch date. |
| Investment or loan | What closing conditions, repayment, interest, ownership or control terms apply? | Use cash only after the commitment is sufficiently firm; show delays in stress cases. |
| Early access, preorders or sales | When can customers pay, what platform holds the money, and what refunds or fees reduce receipts? | Keep speculative sales out of the base case and model them as an upside or downside variable. |
The IGDA results show that self-funding and sales are common reported sources among surveyed self-employed developers, while some reported no funding. That context does not establish that a grant, publisher or investor will be available to your team. Eligibility, geography and terms must be verified for each opportunity.
Build the monthly cash-flow sheet
A spreadsheet is sufficient when assumptions, dates and formula changes are visible. Use one row per cash category and one column per month. At minimum, calculate:
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- Opening cash: the prior month’s closing balance.
- Committed inflows: cash with a dependable receipt date.
- Conditional inflows: grants, advances or sales shown in a separate scenario.
- Cash outflows: compensation, payroll-related costs, contractors, tools and other expenses.
- Closing cash: opening cash plus inflows minus outflows.
- Cash after reserve: closing cash minus the reserve level chosen for your obligations.
Use formulas such as Closing cash = Opening cash + Committed inflows + Scenario inflows - Cash outflows and Opening cash (next month) = Closing cash (current month). Add a flag when cash after reserve is below zero, and a second flag when a payment is due before the next expected receipt.
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The following currency-unit example is fictional and demonstrates the mechanics; it is not a salary or project-cost benchmark.
| Month | Opening cash | Committed inflows | Cash outflows | Closing cash | What the team sees |
|---|---|---|---|---|---|
| 1 | 180,000 | 0 | 24,000 | 156,000 | Prototype work starts; two founders defer part of their planned compensation. |
| 2 | 156,000 | 0 | 28,000 | 128,000 | Contract art and equipment purchases increase burn. |
| 3 | 128,000 | 60,000 | 31,000 | 157,000 | A signed milestone payment arrives; the receipt date is documented. |
| 4 | 157,000 | 0 | 36,000 | 121,000 | Production staffing expands; localization remains outside the base plan. |
| 5 | 121,000 | 0 | 39,000 | 82,000 | Certification preparation adds a one-time cost. |
| 6 | 82,000 | 0 | 42,000 | 40,000 | The reserve trigger is close; hiring and scope decisions become urgent. |
Extend the same columns through release and the post-launch period. A month with negative closing cash is not fixed by an annual total; it requires a dated action such as moving work, reducing allocation, delaying a purchase or securing funding earlier.
Set a runway and reserve trigger that fit your obligations
Runway is the number of months until projected cash reaches a defined floor. The floor is not an industry-standard percentage. It depends on payroll commitments, notice periods, debt, tax due dates, personal obligations and how quickly the team can reduce spending.
- List obligations that cannot be stopped immediately, such as signed contracts, payroll dates, rent, taxes and loan payments.
- Choose a reserve floor that covers those obligations and any practical wind-down cost.
- Flag the first month in which cash after reserve is negative.
- Assign an action owner and a decision date before that month arrives.
Do not call a plan “funded for 18 months” simply because average monthly burn times 18 is below current cash. A milestone payment, annual software renewal or contractor invoice can make the lowest-cash month arrive much earlier than the average suggests.
Run a base plan and a stress plan
At least two scenarios make assumptions visible to founders and potential publishers.
Base case
Use the committed team, planned milestones, dependable funding receipts and your best-supported sales assumptions. Label every assumption that could change.
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Schedule-slip case
Move one or more milestones by a defined number of months and extend the affected roles, software, contractors and overhead. Do not merely add a percentage to the total; delay changes both outflows and the timing of receipts.
Funding-delay case
Move a grant or advance to the latest plausible payment date, or remove it entirely if the agreement is not signed. Show the exact month in which hiring, scope or founder-pay decisions must change.
Sales-downside case
Reduce launch receipts or delay them while keeping unavoidable launch and support costs. Treat platform fees, refunds and payment delays consistently with the sales assumption.
For each scenario, record the earliest trigger, the cash impact, the decision that can be made before the trigger and the person responsible. This turns the spreadsheet into a management tool rather than a static pitch attachment.
Compare salary expectations without false precision
Salary comparisons are useful only when the axes match. Compare the same role, seniority, geography, employment type, schedule and date. A full-time employee’s gross wage is not equivalent to a contractor’s invoice, and a local salary is not a reliable proxy for a remote hire in another labor market.
| Comparison axis | Questions for your plan |
|---|---|
| Role | Are you comparing engineering, art, design, production, audio or another discipline? |
| Seniority | Is the person junior, mid-level, senior, lead or a manager? |
| Geography | Where does the person work and which currency is used? |
| Employment type | Employee, contractor, founder or part-time worker? |
| Schedule | Full-time, fractional, milestone-based or hourly? |
| Date | When was the compensation figure collected, and does it still apply? |
| Total cost | What additional employer costs, benefits, equipment, fees and paid time off apply? |
The available IGDA evidence is broad self-employed income and pay-pattern context, not a current job-by-job salary table. Obtain current local compensation data for the exact roles you plan to hire and document the date and methodology. If you cannot validate a figure, show it as an assumption range and test whether the project still works at the high end.
Account for geography, payroll and worker classification
The studio’s country and hiring locations determine payroll taxes, mandatory benefits, leave, insurance, invoicing rules, intellectual-property assignment and contractor misclassification risk. Because those facts are not specified here, no universal payroll multiplier is reliable.
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For each person, confirm with local professional advice:
- Whether the proposed relationship legally qualifies as employment or independent contracting.
- Which taxes, social contributions, benefits, leave and insurance the studio must pay or withhold.
- Whether the worker can assign intellectual property and confidentiality rights under the contract.
- What notice, termination, minimum-pay and record-keeping rules apply.
- How cross-border currency conversion, withholding and invoicing are handled.
Put the resulting amounts in separate spreadsheet rows rather than burying them in a guessed percentage. Revisit them when a worker changes location or status.
Prepare a budget package for a publisher pitch
A publisher does not need an unexplained grand total. Give reviewers a model they can audit quickly:
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- One-page summary: plan period, milestones, team, requested funding, committed cash and the month the base case reaches release.
- Monthly cash table: opening cash, each inflow, each outflow category and closing cash.
- Staffing schedule: every role, allocation, start and end date, status and compensation assumption.
- Funding register: source, amount, expected receipt date, certainty, restrictions, repayment or revenue-share terms and eligibility.
- Scenario sheet: base, schedule slip and funding-delay cases with their runway dates.
- Assumptions and risks: scope boundaries, unresolved quotes, classification questions and decisions that would change the plan.
Keep signed commitments distinct from hoped-for money through labels, colors or separate columns. A reviewer should be able to remove every uncertain inflow and see the resulting runway immediately.
Reforecast and control the plan during development
Set a regular review cadence—monthly at minimum, and more often around payroll or a major milestone. At each review:
- Replace estimates with actual cash paid and received.
- Move milestone dates to the latest approved schedule.
- Update allocations when someone joins, leaves or changes hours.
- Record new contracts, renewals and one-time purchases.
- Recalculate the first month below the reserve floor.
- Document which assumption changed and who approved the response.
Common failure modes
- One total for the whole game: hides the month when cash is unavailable. Fix it with dated rows.
- Unpaid founder work omitted: makes the game look cheaper while concealing a liability. Track economic and cash compensation separately.
- Funding counted on the pitch date: creates a false runway. Use the contractual receipt date and a delay scenario.
- Blended labor rates: obscure role and seniority differences. Use one row per person or role.
- Universal payroll percentage: can be wrong across jurisdictions and classifications. Obtain local advice and itemize obligations.
- Contingency as an unexplained padding line: gives no decision guidance. Tie extra cost to a schedule, scope or funding event.
- Sales treated as certain: turns a forecast into a promise. Keep sales in a separate scenario until evidence supports them.
A practical decision sequence for founders
- Freeze the current scope, target platforms and milestone dates for the next planning cycle.
- List every contributor and classify the working relationship before discussing rates.
- Obtain role-, seniority-, geography- and date-matched compensation evidence.
- Decide what founders will be paid in cash, what will be deferred and what trigger governs repayment.
- Price non-payroll work and purchases in the month they are expected to occur.
- Enter only dependable funding in the base case; place conditional sources in separate scenarios.
- Calculate closing cash and the first month below the chosen reserve.
- Run schedule, funding-delay and sales-downside cases.
- Choose the earliest intervention—scope reduction, delayed hire, changed allocation, renegotiated milestone or new funding—and assign an owner.
- Reforecast whenever a staffing, scope, milestone or funding assumption changes.
This process gives a founder a defensible answer to “How much should I pay myself?”, “How can we budget before pitching?” and “How long can we afford to develop?” without pretending that a single industry number can answer all three.
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