Why Publishers Reject Good Indie Games (And What You Can Do About It)

You go to pitch your game that you’ve been working on hard, and it’s slick. It has good feedback from player testers, and even has a decent playtime. You feel confident that a publishers will be stupid to not take your game, so you go to pitch, and then rejection. Why is a publisher not taking your game?!

This article is for indie developers looking for indie publishers, and the goal is to help you understand the perspective of publishers. It’s them and not you—even when your game is great.

GameCo Publishing Company

Let’s make a fake game company called GameCo. GameCo does a cash advance or investment of $250k, and they may provide services like porting, localization, and marketing as well.

Publisher deals can vary depending on the publisher and the anticipation of the game. Some deals do a straight revenue split anywhere as slow as 30% and high as 70%. Others may start revenue sharing only after they have recouped a certain amount of money, and then some publishers even take royalties.

But GameCo is fairly straightforward: they take 30% of all net profits for a period of 3 years after the game launches, and their standard investment is $250k. They don’t withhold payment based on certain services or thresholds being met.

So, GameCo decides to invest in your game with a $250k deal for you to complete your game. So how much does NewCo need to make to break even?

GameCo And Breaking Even

To understand how much NewCo must make back to break even, let’s jump into a simple math problem.

• Investment: $250,000
• Publisher’s Share: 30% of net revenue
• Break-even Condition: The publisher must recoup their $250,000 investment

We want to find X, the net revenue needed so that 30% of X equals $250,000.

0.30 * X = 250,000
X = 250,000 / 0.30
X = 833,333.33

That’s right, the publisher must see $833,333 in net revenue to get back their $250k. That’s quite a lot! But wait, we're not done. If they distribute on Steam, which takes 30%, meaning the publisher's share is 30% of the net revenue after Steam’s cut.

The game must generate approximately $1.19M in gross revenue to allow the GameCo to break even on their $250K investment, assuming a 30% publisher share and Steam’s 30% cut from gross revenue.

Keep in mind, this calculation is not factoring into inflation that can occur in the 2-4 years your game in development. But that’s not even the end of costs—there are also operations and salaries for GameCo to factor in.

Operations and Salaries

If we look at GlassDoor, we see salaries at various publishers (from HumbleBundle to TripWire Interactive) range from $40k up to $200k. And publishers, even the indie ones, can employ anywhere from 5 to 100+ employees.

But let’s make this simple for GameCo: let’s say they employ 5 people, each with $100k salaries.

Keep in mind this isn’t an exact calculation. Publishers often invest in multiple games that collectively pay for a portion of their overall operations. This also doesn’t take into account the years required to make a game—these operations costs go up the longer development takes.

For our rough example:

• $500,000 total in annual salaries (5 employees * $100k each)
• $250,000 the publisher wants to recoup (their original investment)

So total publisher costs to cover (investment + these particular operations costs) might be:

$500,000 (salaries) + $250,000 (publisher recoupment) = $750,000

Step 1: Determine Necessary Net Revenue

Since the publisher takes 30% of net revenue, the developer (indie studio) keeps 70%. To cover $750,000 of total costs, the net revenue (X) must satisfy:

0.70 * X = 750,000
X = 750,000 / 0.70
X = 1,071,428.57

So, the game needs to generate at least $1,071,429 in net revenue to cover both the publisher’s operational costs (in this simplified scenario) and the publisher’s original $250k.

Step 2: Gross Revenue Needed

If the game is sold through platforms like Steam, PlayStation, or Xbox, they take 30% of the gross revenue. That means only 70% of the gross revenue becomes net revenue.

Let G be the required gross revenue. We have:

G = 1,071,428.57
G = 1,071,428.57 / 0.70
G = 1,530,612.24

So, the game must generate approximately $1.53 million in gross sales to cover both development costs and the publisher’s investment in this basic example. And we left out other expenses like tax, lease rent, insurance, and other comes expenses that businesses incur.

Now if GameCo only invested in one game for some reason, and the game took 2 years to make, operation costs would be $1 million. And they would need to make back gross $4.17 million and a net of $5.9 million to break even at that point. So the longer you develop your game, the more expensive it becomes.

Marketing, Localization, and Porting

At the beginning of investment, it’s discussed who is responsible for what. Sometimes localization and porting are the developer’s responsibility and are accounted for in the investment. Other times the publisher takes on the costs (or executes those services for a fee). Almost always, publishers are responsible for marketing.

For simplicity’s sake, let’s say GameCo, our new indie publisher, takes on the cost, spending an extra $215k to bring your game to light:

• $50k for porting
• $40k for localization
• $125k on marketing

Updated Costs to Cover

• Initial Publisher Investment = $250,000
• Additional Publisher Investment (Localization, Marketing, Porting) = $215,000
• Total Publisher Operating Costs (Salaries for 5 employees) = $500,000

Thus, the total amount that needs to be recouped is:

Total Costs = 250,000 + 215,000 + 500,000 = 965,000

Since the publisher keeps 30% of the revenue:

• Break-Even Revenue = 965,000 / 0.30
• Break-Even Revenue = $3,216,667

Thus, for the publisher to break even, the game must generate at least $3.22 million in total revenue. But once again, let's assume the distribution store like Steam takes 30%. GameCo only retains 30% of the revenue they receive after distribution platforms like Steam take their 30% cut. This means the publisher actually gets:

Since the publisher ultimately receives 21% of total revenue:

Break-Even Revenue = 965,000 / 0.21

Break-Even Revenue = $4,595,238

Thus, for the publisher to break even, the game must generate at least $4.6 million in total revenue.

Publishers Want to Be Profitable

From the nearly $1 million the publisher is putting into your game (the original $250k plus the extra $215k for porting, localization, and marketing, and the $500k from supporting operations), they now must see $4.6 million in gross revenue just to break even. That’s 18.4 times the original amount of $250k money they put into the game just to break even.

Now, breaking even is nice, but publishers want to be profitable so they can invest in more games. Often they’ll hope for at least a 3x to 5x return. If we took that $4.6 million break-even and multiplied by 5, for instance, we’d get about $23 million in gross revenue as the “dream scenario.”

So if you are going to get a $250k investment, you need to ask yourself: “Can my game idea realistically bring in the kind of sales that will make the publisher happy?”

De-Risk Your Game To Increase Publisher Interest

The key takeaway here is that the business of publishing is risky, and publishers require significant returns to justify that risk. So, what can you do to de-risk your game from a numerical perspective to make it more appealing?

1. Market Research on Large Audiences

Look for successful games in markets with large audiences interested in your genre. Focus on genres with at least 100 million potential players and analyze why players might choose your game over an existing one. Understanding what makes your game stand out in a crowded space is crucial. Smaller nice genres might not have the audience to make a publisher their money back.

2. Demonstrate Your Game Can Sell at Higher Price Points

One major challenge indie games face is pricing their games too low—often under $10. Let’s break down the numbers needed to reach $23 million in revenue at different price points:

• At $10 per game → You need 2,300,000 copies sold
• At $20 per game → You need 1,150,000 copies sold
• At $30 per game → You need 766,666 copies sold

The cheaper your game is, the harder it will be to reach revenue goals. If you can justify a higher price point, it makes your game less risky for a publisher.

3. Cover More Development Areas

If your game already supports scalability, such as porting and localization, you reduce the publisher's burden and make your game a more attractive investment. The less they need to invest in additional development, the lower their risk.

4. Build an Audience First

Building an audience before launching your game increases its appeal to publishers. This can be done through:

• Newsletters
• Social Media Followers
• Discord Subscribers
• Steam Wishlist Growth

The larger your audience, the more attractive your game will be to publishers. However, here’s the catch-22: the bigger your audience, the less you may need a publisher at all.

At Glitch, we’ve seen clients who are fully self-funded and, in some cases, self-distribute their games without a publisher’s involvement. Growing your audience puts you in a stronger negotiating position, whether you choose to work with a publisher or go fully independent.

Next Time You Pitch A Publisher

Our fake publisher, GameCo, was created as an example to show how a publisher thinks about your game. When it comes to securing a publisher, commercial viability is what matters most—not the art.

Next time you pitch a publisher, you’re not just pitching your game; you’re pitching how your game will generate a large enough return to make it worth the publisher’s investment.

Why might a publisher say no? From their perspective, if your game doesn’t plausibly generate millions in sales—even if it’s great—they simply can’t justify the risk. That’s the main takeaway: It’s about their business model, not a reflection of your game’s quality.