Mobile Game Development Break-Even: About $685K Monthly Revenue

Fixed costs $54.8K Monthly fixed base

Contribution margin 80% After variable costs

Break-even revenue $68.5K Revenue target

Break-even timing Month 16 Model breakeven

Break-even calculator

Use this to test monthly revenue, variable expenses, and fixed costs against break-even for a mobile game studio.

Lean Base Full

Monthly revenue Revenue is the pool that has to cover direct costs and fixed overhead. $ Low revenue High revenue Variable expenses These are direct costs that rise with revenue, like store fees, hosting, and acquisition spend. $ Low costs High costs

Money available to cover fixed costs $105,467 $128,618 revenue - $23,151 variable expenses

Margin ratio

82%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base that contribution margin has to cover. $ Lean team Built team

Break-even chart Revenue Total costs

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

Cost classification

Classification matters because Month 16 break-even only works if fixed overhead, sales-linked fees, and step marketing are separated. The $107k startup capex belongs in runway planning, not monthly contribution margin.

Expense	Cost	Break-Even Treatment	Common Mistake
Core studio payroll	Fixed	Carry CEO/Founder, Lead Game Designer, Lead Game Developer, and Senior Artist as fixed overhead at about $39.2k/month in the first year.	Treating salaried staff as variable because game usage grows.
Office rent	Fixed	Include $3.5k/month from Month 1 through Month 60 in monthly fixed overhead.	Scaling rent with revenue instead of keeping it flat.
Annual marketing budget	Semi-fixed	Model the first-year budget as about $8.3k/month, then step it up as the plan expands.	Blending planned budget with revenue-based acquisition fees.
App store platform fees	Variable	Subtract 12% of first-year revenue before contribution margin, then use the lower planned rates in later years.	Putting platform fees below EBITDA as overhead.
Server hosting and CDN	Semi-variable	Use 3% of first-year revenue as the usage-linked proxy, but watch for base hosting commitments as traffic grows.	Assuming hosting is purely fixed during user growth.
User acquisition marketing spend	Variable	Apply 4% of first-year revenue in operating break-even contribution margin.	Counting all marketing as fixed and overstating margin.
External content licensing	Variable	Deduct 1% of revenue across all years as a sales-linked content charge.	Ignoring small royalty-like charges because the rate looks low.

How does break-even shift across lean, base, and full studio scale?

Scenario table

Break-even gets harder as the studio scales because fixed costs rise from about $548K to about $1.21M, even as the contribution margin improves from 80% to 84%. The model still reaches break-even in Month 16 overall, so CAC control matters as much as content quality.

Scenario figures are planning assumptions, not guarantees.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch scale	$685K	$137K	$548K	80%	$0	Tightest cushion; CAC drift can delay break-even.
Base studio scale	$938K	$169K	$769K	82%	$0	Main test case; this is the clearest proof of launch traction.
Full studio scale	$1.44M	$231K	$1.21M	84%	$0	Best cushion, but only if retention and paid acquisition hold.

What breaks first if launch economics tighten?

Stress test

The plan breaks fast if acquisition gets pricier, trial-to-paid conversion slips, or fees eat into margin. At a $685,000 monthly break-even, even a 15% revenue miss or a 10% cost bump leaves a real cash gap.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$685,000	$0 gap	Works only if the base case holds.
Revenue shortfall	Revenue drops 15% to about $582,000 a month.	$685,000	$82,000 gap	If trial-to-paid slips under 15%, cash pressure rises fast.
Fixed-cost pressure	Fixed monthly costs rise 10% to about $603,000.	$753,000	$55,000 gap	Higher overhead pushes the cash need up even with steady sales.
Margin pressure	Contribution margin falls from 80% to 75%.	$731,000	$34,000 gap	If platform, hosting, acquisition, and licensing drag tops 20% of revenue, break-even climbs.
Combined pressure	Revenue drops 15%, fixed costs rise 10%, and margin falls to 75%.	$804,000	$166,000 gap	Weak funnel performance and fee drag can force a raise.

What should the founder verify before locking in the game studio, ads, and live-ops hires?

Founder checklist

Prove the prototype and funnel can hold players before you add staff, lease space, or spend the full growth budget. The model still shows a $388K Year 1 EBITDA loss and needs $424K of cash by Month 15.

1Prototype Proof4 core FTEs

Make sure the prototype can hold users before you add roles beyond the four Year 1 core FTEs, since Year 1 still carries a $388K EBITDA loss.

2Fixed Burn$46.5K/mo

Check that the studio can carry about $46.5K a month in fixed burn, including $3.5K rent, before you lock into a long office lease.

3Launch Funnel5% / 15%

Validate the 5% visitor-to-free-trial and 15% trial-to-paid path before scaling ads, or the $100K Year 1 marketing budget can disappear fast.

4Pricing Test$5 / $10 / $20

Test whether players will buy Basic, Premium, and Ultimate at $5, $10, and $20 monthly before you rely on the mix shift to lift revenue.

5Cash Buffer$424K cash

Keep the $107K of capex separate from operating burn and hold the $424K cash buffer through Month 15, because breakeven does not land until Month 16.

6Hire RampMonth 13 / 25

Add the community manager in Month 13, marketing in Month 13, and support in Month 25 only after retention shows those roles will pay back.