Video Game Store Break-Even Analysis: About $95K Monthly Sales

Fixed costs $13.7K/mo Base monthly cost

Contribution margin 86.5% After variable costs

Break-even revenue $15.9K/mo Revenue needed

Break-even timing Month 14 Forecast break-even

Break-even calculator

See how monthly revenue, variable expenses, and fixed costs affect break-even for a video game store.

Lean Base Full

Monthly revenue Revenue is the top line that funds overhead and profit. $ Low sales High sales Variable expenses These are direct costs that rise with sales, like marketing, card fees, shipping, and shrink. $ Low cost High cost

Money available to cover fixed costs $19,140 $22,000 revenue - $2,860 variable expenses

Margin ratio

87%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead your contribution margin must cover. $ Low overhead High overhead

Break-even chart Revenue Total costs

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

Cost classification

Break-even at Month 14 only holds if rent, payroll, inventory, card fees, and shrinkage are classified correctly. Put sales-linked costs against margin, not overhead, so the model shows the real sales volume needed.

Expense	Cost	Break-Even Treatment	Common Mistake
Commercial lease, $3,500 per month	Fixed	Include in fixed monthly overhead from Month 1 through Month 60.	Tying rent to sales instead of store capacity.
Store manager salary and sales associates	Semi-fixed	Model payroll in staffing steps as full-time equivalent headcount rises.	Treating all labor as a per-sale expense.
Inventory purchases and product cost of goods sold	Variable	Subtract from each sale before calculating contribution margin.	Booking inventory buys as fixed overhead.
Payment processing fees	Variable	Apply to revenue at 2.5% in the first year and 2.4% in the second year.	Ignoring card mix and overstating margin.
Marketing and promotions	Variable	Tie to the sales plan at 8.0% in the first year and 7.5% in the second year.	Treating launch demand as free growth.
Utilities, $500 per month	Fixed	Include as fixed overhead in this model.	Missing higher usage if events expand.
Part-time event coordinator starting Month 13	Semi-fixed	Add only when event volume supports the added role.	Hiring before event demand exists.
Inventory shrinkage	Variable	Treat as margin leakage at 1.0% in the first year and 0.9% in the second year.	Leaving theft, loss, and damage out of unit economics.

How does break-even shift across lean, base, and full video game store setups?

Scenario table

Lean keeps the shop small, but it also stays below break-even. Base and full formats lift contribution faster than fixed costs, so they move into profit.

Planning assumptions only; actual results will move with traffic, mix, and costs.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean neighborhood shop	$629k	$541k	$137k	14%	-$49k	Break-even sits near $98k revenue, so this is still a test phase.
Base storefront	$1.34m	$1.10m	$170k	18%	$72k	Break-even sits near $95k revenue, so this format has a cushion.
Fuller setup	$2.64m	$2.11m	$192k	20%	$335k	Break-even sits near $96k revenue, so scale creates a wide cushion.

What pushes this video game store past break-even?

Stress test

Base case clears break-even, but the cushion can shrink fast. The main pressure points are buyer conversion below 10%, repeat orders below 0.7 a month, and a weaker mix in used games, accessories, fees, and promotions.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$95k	$39k cushion	The plan clears break-even, but not by a wide margin.
Revenue shortfall	Monthly sales fall 10% from plan.	$95k	$26k cushion	Lower traffic still works, but the room for error gets smaller.
Fixed-cost pressure	Fixed costs rise by $2k a month.	$106k	$28k cushion	Small rent or payroll jumps eat into the cushion fast.
Margin pressure	Contribution margin falls to 15%.	$114k	$20k cushion	Used-game mix, shrinkage, fees, and promos push break-even up.
Combined pressure	Sales fall 15%, margin falls to 15%, and fixed costs reach $19k.	$127k	$13k gap	This is the break point where the monthly plan turns negative.

What should a founder verify before signing the lease for a video game store?

Founder checklist

Before you sign the lease, prove the store can pull enough traffic, convert at the model rate, and carry the fixed-cost load. No traffic, no break-even.

1Traffic test50-220/day

Verify the site can reach Year 1 and Year 2 visitor levels and still support 8.0% to 10.0% visitor-to-buyer conversion, or the sales plan falls short.

2Lease load$4.6K/mo

Add the lease, utilities, software, insurance, security, cleaning, and web costs first, because the space still needs a clear path to about $95K in monthly sales by Month 14.

3Margin load13.5%

Check that Year 1 non-merch variable costs stay near 13.5% of sales, since 2.0% inbound shipping, 1.0% shrink, 8.0% marketing, and 2.5% payment fees hit cash before growth helps.

4Payroll ramp$9.2K/mo to $12.5K/mo

Plan staffing before you hire, because Year 1 wages total about $110K and Year 2 climbs to about $149.5K when the part-time event coordinator starts in Month 13.

5Cash runway$816K

Hold the minimum cash cushion through Month 17, since the model’s low point comes after opening costs and before the higher Year 2 sales show up.

6Launch stack$79K

Fund the full launch build-out, shelving, point-of-sale (POS) hardware, security, gaming stations, signage, furniture, and display materials, and get POS and inventory software live before stock lands.