That said, with a staff of 4, looking at last year's income and ignoring the not-luridly-to-repeat windfalls, we would have made a profit in the lower middle five figures, which would have been a nice chunk to send to savings or investments. The windfalls themselves would have been just that -- windfalls added to reserves -- as opposed to further bridge money. As it stands, having a staff of 4 is stable and should be sustainable unless we take an unprecedented drop in income this year (which could happen, but has not in the last 5 years), and so shifting to that was kind of my only sane choice at this point. Since my back was already to the wall in the short term.
Apologies, I know nothing about running a business, so while my question may sound naive, it's genuine curiosity. Is not having 7 people versus 4 means you also do more stuff in less time? I understand about cutting expenses, but it's not like the three people was sitting around doing nothing, right? They also were contributing to the (potential) income, right? (It's ok if you don't have time to explain that to me, I'll understand. Just curious)
Right. The other thing to remember is that money is not something the company gets in the short term for doing work. Say we spend 6 months making a game with 7 people. We then release it, and it makes some money. That game then goes on and on and on making money, at a lower volume but still there, for years afterward. As bad as Tidalis has done for us, it looks like it grossed something like $21k in sales last year, three years after coming out. That nets out to something like only $15k to us, and part of that was inflated by it being a part of some very sizable all-Arcen bundles. But still.
The way that we make money, and when, is really disconnected from when we do the work. That's one reason it is so easy to overspend on trying to make money, either before or after a game comes out. It's also why a reduction in staff doesn't really hurt the bottom line immediately. We could all just stop working right now, and still make at least half of last year's income just by me negotiating discount promotions over the year.
The trouble is income growth, and sustainable income. Each game, depending on the game, has a falloff in income generated. Shattered Haven's fell off almost immediately. Skyward Collapse's fell off in a way that was surprisingly quick. Bionic we have yet to see. Valley and AI War have been steady earners, but we overspent on making the Valley games, which is the only reason they were not a huge success in our book. Tidalis, interestingly, has been very very slow, but also kind of steady.
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So you then also come to things like Erik's work in particular. His work was trying to increase sales in a variety of ways, including by really pushing social media, etc. We had a lot of success in some areas, but not in others. It was a time of experimentation and learning for us, essentially. So with his reduced role, he'll be able to focus on the high-value stuff and ignore the stuff that didn't pan out. But we had to go through that learning process over the last few years to really hone our process and also know what was high value.
When it comes to other staff, there are things that Arcen has simply become more efficient at in general, which at least somewhat offsets our losses in staffing. We're always getting more efficient with every project, and that's a big help for us.
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The big problem with keeping a staff of 7 was that we'd have to increase our baseline earnings by something like 30%. I just got back the final figures on 2013, and we actually did increase our earnings 43% last year over any year prior. THAT said, that was including several one-off bundles that are not remotely guaranteed to repeat. If you take those out, our earnings gains were more in the 12% range. So that made things super uncertain.
There's also something to be said for not having to rush around. When we have to release on bad dates, or without advance press, or without my having time to do advance videos and such, or without us having time to do as much polish as we'd like (cough Skyward), then we shoot ourselves in the foot. I think that those negatives kind of outweigh the speed of getting somewhere faster, in the end. Sure, with a larger production staff we can get somewhere 50% faster, but if we're not getting there as
well because we're constantly rushing... then we're actually kind of throwing money away.
Which really sucks, because if the money was there where we could keep the staff AND not have to rush, we could really do so much. As you basically are asking, yes we would totally be able to do more. But that's not really the choice that was before me, if that makes any sense. It's really this huge complicated mess of factors, and it took me many many months to come to a decision on what ultimately was going to be something we could sustain and make work well. And even then, I didn't make any final decisions until finances absolutely forced my hand, because I was still holding out hope that we could make it work with the larger staff.
