Indie Game Studio Break-Even Analysis: $53K Monthly Revenue Target

Fixed costs $31.5K/mo Recurring burn base

Contribution margin 83% After variable fees

Break-even revenue $38.0K/mo Monthly target

Break-even timing Month 19 Model break-even

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against break-even.

Lean Base Full

Monthly revenue More revenue leaves more room for fixed costs. $ Low sales High sales Variable expenses These are direct costs like marketing, fees, and royalties. $ Low costs High costs

Money available to cover fixed costs $34,280 $40,000 revenue - $5,720 variable expenses

Margin ratio

86%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the studio must cover. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which game studio expenses are fixed, and which move with sales?

Cost classification

Break-even is reliable only when fixed burn stays separate from revenue-linked deductions. For this studio, Month 19 break-even depends on treating salaries and rent as monthly burn, while royalties and processing fees reduce each sale.

Expense	Cost	Break-Even Treatment	Common Mistake
Office rent, $2,500/month	Fixed	Include in monthly fixed burn from Month 1 through Month 60.	Spreading it per unit sold and understating slow-month losses.
Year 1 salaries, $310,000	Fixed	Convert to about $25,833/month for lead developer, designer, and programmer burn.	Treating core team pay as optional until revenue starts.
Software subscriptions, $800/month	Fixed	Include as recurring monthly overhead in the break-even denominator.	Leaving tools out because each line item looks small.
Payment processing fees, 2% in Year 1	Variable	Deduct 2% of revenue before calculating contribution margin.	Counting gross sales as cash kept by the studio.
Third-party asset royalties, 1% in Year 1	Variable	Deduct 1% of revenue tied to licensed assets.	Modeling royalties as fixed when they rise with sales.
Marketing campaign costs, 10% in Year 1	Variable	Deduct 10% of revenue as sales-linked acquisition spend.	Mixing revenue-based campaign spend with the annual budget.
Game engine royalties, 4% in Year 1	Variable	Deduct 4% of revenue before fixed overhead coverage.	Ignoring engine royalties until after profit is calculated.
Annual marketing budget, $150,000 in Year 1	Semi-fixed	If paced monthly, model about $12,500/month as planned spend.	Assuming the full budget flexes perfectly with each sale.

How does break-even change as this indie game studio moves from lean to base to full scale?

Scenario table

As payroll and marketing step up, the break-even revenue rises fast. The lean setup clears at about $53.1k a month, the base at about $69.4k, and the full team at about $101.4k because fixed costs climb faster than margin.

Planning figures only; revenue shown is the break-even threshold, not a sales forecast.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean studio	$53.1k	$9.0k	$44.0k	83%	$0	Lowest break-even, but launch slippage still hurts.
Base studio	$69.4k	$9.9k	$59.5k	85.7%	$0	The middle case needs steady sales to stay even.
Full studio	$101.4k	$12.8k	$88.6k	87.4%	$0	Highest fixed load, so the sales ramp has to be stronger.

What breaks the break-even plan for this indie game studio?

Stress test

At $53.1k monthly revenue, $44.0k burn, and 83% contribution margin (revenue left after variable costs), this plan has almost no cushion. A 20% sales miss, a 10% burn increase, or a 5-point margin drop quickly turns break-even into a cash gap.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$53,052	$48 cushion	Barely break-even; one small miss flips it red.
Revenue shortfall	Monthly revenue falls 20% to about $42,500.	$53,052	$8,775 gap	A delayed launch or softer demand burns through cash fast.
Fixed-cost increase	Monthly burn rises 10% to about $48,400.	$58,354	$4,363 gap	Hiring too early or contractor overruns push the floor higher.
Margin pressure	Contribution margin drops 5 points to 78%.	$56,454	$2,615 gap	Higher marketing drag or royalties eat the cushion.
Combined pressure	Revenue falls 20%, burn rises 10%, and margin drops to 78%.	$62,098	$15,302 gap	Launch slip plus cost creep creates a serious monthly drain.

Is the studio ready to lease, hire, and spend on launch before it reaches break-even?

Founder checklist

Not yet unless cash covers the $597,000 minimum need and the Month 24 low point. The studio should only lock in rent, hires, and heavy marketing if it can still reach the Month 19 break-even target with room for refunds and delayed sales.

1Runway$597K cash

Verify you can stay solvent through the Month 24 low point and still reach Month 19 break-even; if cash drops below the floor, the commitment is too early.

2Base Burn$5.7K/mo

Hold the $2,500 office only if it speeds production enough to justify the monthly fixed load; a lean setup protects break-even if it does not.

3Margin Stack83% CM

Check that fees, royalties, and campaign spend still leave enough contribution margin to cover fixed costs and keep the break-even target believable.

4Hire Ramp3 FTE

Do not add staff beyond the first 3 FTE until milestones support it; the $85,000 artist in Year 2 and $75,000 marketing manager in Year 3 should follow proof, not hope.

5Capex Gate$84K capex

Approve the equipment spend only if the workstations, licenses, furniture, servers, audio gear, video gear, IP filing, and development kits are needed now.

6Launch Proof$150K Y1

Spend the Year 1 marketing budget only when the store page, trailer, and community signals can support the $10 CAC and early repeat buying at 15% of new customers.