Video Game Digital Distribution Break-Even: Month 6 Target

Fixed costs $38.5K/mo Base monthly load

Contribution margin 80.5% After variable costs

Break-even revenue $47.8K/mo Monthly target

Break-even timing Month 6 Model hit point

Break-even calculator

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

Lean Base Full

Monthly revenue Revenue drives the margin that can cover fixed costs. $ Slow month Strong month Variable expenses These rise with sales, like CDN, gateway, support, and promo costs. $ Light costs Heavy costs

Money available to cover fixed costs $248,000 $308,000 revenue - $60,000 variable expenses

Margin ratio

81%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base your contribution margin must cover. $ Lean base Heavy base

Break-even chart Revenue Total costs

Which expenses are fixed at break-even, and which move with game sales?

Cost classification

Break-even is Month 6, so the model only holds if fixed overhead stays separate from volume-linked fees. Treating bandwidth, payment processing, support, and launch marketing as flat will overstate profit as buyer volume rises.

Expense	Cost	Break-Even Treatment	Common Mistake
Cloud Infrastructure Base	Fixed	Cover the $15,000 monthly base before profit; this is part of the platform’s minimum operating load.	Blending the base platform bill with usage spikes and hiding the true fixed hurdle.
HQ Office Rent	Fixed	Include the $12,000 monthly rent in the break-even floor, even when game sales are light.	Reducing rent in the model just because launch-month revenue is lower.
Software & Security Licenses	Fixed	Include the $5,000 monthly license spend as recurring overhead that must be covered before EBITDA turns positive.	Treating required security tools as optional spend after launch.
CDN & Bandwidth Costs	Variable	Reduce contribution margin by 8.0% of revenue in the first year, improving to 6.0% by the fifth year.	Modeling downloads as flat when larger files and higher buyer volume raise usage.
Payment Gateway Processing	Variable	Deduct 3.5% of revenue in the first year, falling to 3.0% by the fifth year, from each sales dollar.	Counting gross order value without payment fees and overstating contribution.
Influencer Commissions	Variable	Deduct 5.0% of revenue in the first two years, then model the lower rates as the channel matures.	Treating launch marketing as flat while buyer acquisition scales.
Engineering Headcount	Semi-fixed	Model salary jumps when hiring changes; Senior Backend Engineer staffing rises from 2.0 FTE in the first year to 6.0 FTE by the fifth year.	Spreading payroll evenly by order instead of stepping it up when capacity needs change.

How does break-even change from a lean launch to base and full scale for a digital game platform?

Scenario table

Break-even gets easier as revenue rises faster than fixed overhead and acquisition spend. Lean gets to Month 6, the base case builds a real cushion, and full scale mostly tests support load and publisher mix.

Planning case only: these figures are model assumptions, not guarantees, and actual break-even will move with mix, spend efficiency, and conversion.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$308.0k	$69.8k	$213.5k	77.4%	$24.8k	Break-even lands by Month 6, so launch risk is mostly timing.
Base scale	$1,850.8k	$334.5k	$497.3k	81.9%	$1,019.1k	The model is past break-even, so repeat demand starts to build cushion.
Full scale	$4,531.0k	$678.3k	$781.0k	85.0%	$3,071.7k	Strong cushion, but support and publisher mix need to hold margins.

What breaks the break-even plan if sales slip or costs rise?

Stress test

The plan clears break-even in Year 1, but the cushion is thin. A 20% revenue drop or a $10k monthly fixed-cost bump pushes the model close to the line, and higher support, bandwidth, or payment costs can erase the buffer.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$265,217	$42,783 cushion	Year 1 average revenue stays above break-even.
Revenue shortfall	Monthly revenue falls 20% to about $246k.	$265,217	$18,783 gap	A sales dip of this size puts the plan below break-even.
Fixed-cost pressure	Fixed spend rises by $10k per month.	$277,640	$30,360 cushion	Every extra fixed dollar needs more sales to cover it.
Margin pressure	Variable expenses rise from 19.5% to 24.5% of revenue.	$282,781	$25,219 cushion	Higher CDN, payment, or support load cuts the margin cushion.
Combined pressure	Revenue falls 20%, fixed spend rises $10k per month, and variable expenses rise to 24.5%.	$295,695	$49,295 gap	Sales and cost pressure together can wipe out the Year 1 EBITDA cushion.

Can you commit to the digital distribution build and launch spend yet?

Founder checklist

Here’s the quick math: not yet, unless you can fund the Month 6 cash low point and prove both buyer pull and seller onboarding. The model reaches break-even in Month 6, but payback still runs 14 months, so spend should wait for proof.

1Cash floor$279K M6

Do not commit the big spend until you can fund the $279K cash low point in Month 6, because that reserve keeps the platform alive while demand proves out.

2Publisher terms12% + $1

Confirm publisher terms before you count the $1 fixed fee plus 12.0% order-value commission, because false take-rate assumptions make break-even look stronger than it is.

3Buyer pull100k buyers

Test whether the $1.2M Year 1 buyer budget really buys about 100,000 customers at a $12 CAC before you scale the ad engine.

4Seller pipeline300 sellers

Hold seller growth to the 300-seller pipeline implied by a $150K Year 1 budget and $500 CAC, or the catalog will stay too thin.

5Cost stack$38.5K/mo

Budget the $38.5K monthly fixed stack and keep Year 1 contribution margin near 80.5% after 8.0% CDN, 3.5% gateway, 5.0% influencer, and 3.0% outsourced support, or break-even slips.

6Launch team6 FTE

Keep the launch team at 6 FTE until traffic and onboarding prove out, and do not move to the Year 2 headcount ramp before demand is real.