I love these posts.

I have a little money.  Here, have some of it.  I'd love to play the DLC with spouses.

Cheers,

Sword

I'm a student for a Bachelor's in Industrial Engineering, and I find such insights on the inner workings of a living business to be invaluable.

As I re-read your post, it seems to me as if you confused your two criteria. At first, you talk about the steady state income of LH and state that development of DLC for it is worth 3 employees (first criterion) . Then you examine it from the second criterion perspective and arrive to LH's DLC being worth only 1 employee. You then state that DLC sales are effectively the budget for new development of further DLC, and thus we put only one full-time employee on developing them.

This last statement is actually the first criterion, in more concrete form. Availability of DLC have very little correlation to the income from sales of the core product (as far as I know), and thus has little to do with the budgeting for further DLC. The budget for any development is (as stated) 75% of the expected return, and since you expect 15k monthly return on DLC it's reasonable to have only one employee working on it.

HOWEVER. You say that the current level and amount of DLC nets to 15k monthly. You take this number and extrapolate that having more than a single employee on DLC for LH is not worthwhile. This logic is totally backwards. You have shown no causation between the number of employees and the expected revenue. I know that such a causation exists, and that it is quite difficult to calculate or predict (as the case might be), but evaluating said causation is the right way to approach the problem*.

 *The problem being the search for an optimal assignment for employees to projects. If all data is available an optimal solution can be calculated. The data is never completely available, however, and that is why there's demand for people in my profession (I hope).

You must be fun at parties.

Two words. Opportunity costs. Having 3 people work on GC3 will net greater returns than having those same three work on LH.

Gazing,

It's been awhile since I felt the need to write a reply.  You should have stopped typing after your first line.  The first line was great!

I've been playing his (brads) games for at least 10 years now.  What your seeing is an indi (kinda) developer making games and actually telling you how to budget in simple terms. Your long winded extrapolation of the matters of real life didn't need to happen.  As a student you just listen and be gracious.

Just a piece of my Pi

Just in case there are any aspiring game programmers out there reading this post thinking they can be an average joe developer and make 120k a year, that 10k a month is often refereed to as the "fully loaded" cost.  Which includes all those fun overhead items businesses have to pay like taxes and insurance. 

Don't get me wrong, you can certainly make a great living being a business/game programmer, make 6 figures and all that, but these kids coming straight out college thinking the're going to get paid like a 10 year veteran crack me up.

Spouses DLC, not what I expected.

Could be good, could be boring but I will hold judgement till we hear much more about it. I will likely still buy it though because I do want future LH content and the only way I can get it is by showing support.

Random Map Expansion DLC, the name alone makes it an automatic purchase for me.

Yup. Me too.

I'm going to be the party pooper here, but I disagree.

I want LH to be successful and continue into the future as well, but when SD takes a swing and misses (releases a "meh" DLC), I vote with my dollars and would skip that one.

However, I agree that a random map expansion DLC sounds like a great idea!

Now I have to reply again!

I opened my mouth for the Gazing kid.  You can do all that you want in life Gazing, but don't think a college education will teach you about the real world.  There are so many ins and outs for everything that only living your life can teach you.  Gazing, please don't come out of college thinking you know it all.  Because simply, you will not.  I don't.  Brad don't.  My kids don't.  You don't.

I hope you success in life, but please don't think you own it.  Visiting the forum here is fun for me.  I don't have much time to sit and play the game(s).  I work in business, and Brad has explained many things in the development process that have helped me in the real world.  And my business is nothing close to game development.

BTW great comment Rhadagast

I'm a bit puzzled, Gazing didn't even post again, not sure why he deserved another telling off.

In any case Gazing had half a point in that Brad's analysis, while interesting, is obviously very simplistic and is missing the key feedback relationship between number of employees on the project and the income earned from DLC. I suspect that was deliberate on Brad's part, he was just trying to give some idea of the bottom line numbers rather than a detailed breakdown of how they were reached.

So, while Gazing probably deserved a bit of criticism for trying to teach Brad how to suck eggs, it isn't worth going on about.

All IMO   of course.

I'm going to put myself in the firing line and actually defend Gazing.

What he is really challenging is this assumption

7) Regardless of how many workers I put on making DLC, it will result in 15k/month.

or as Gazing put it: "You have shown no [or zero] causation between the number of employees and the expected revenue."

From the System engineering side that Gazing is talking about, you have a resource that produces widgets at a rate. Which in this case is a developer making DLC pack content per month. Using 2 resources in theory results in 2x the production rate of widgets a month, so 2x as many DLC or a single DLC worth 2x the content. So twice the income a month?

However, as Gazing admits it's not that simple:

"I know that such a causation exists, and that it is quite difficult to calculate or predict"

That's because 2 workers/resources don't always produce twice as much, and twice as many DLC or a DLC of twice the content, might not sell for twice as much. This is 1 of 2 really tough parts of the problem, Brad has to predict how his rate of return per developer scales with more developers to a DLC. He may already have predicted it as not scaling at all, which is a harsh thing to tell us but may be true. (We will always be willing to pay 15k/month for the DLC regardless of how much or little content it contains). As Brad already mentioned the 2nd really tough part is that he has to predict the same rate or return per developer on other projects, and compare the two options, or opportunity cost.

Which brings a question to ask ourselves: Would you buy x value of DLC a month regardless of how much content is in it? Would you buy 2 DLC packs a month comfortable that they took 2x the effort combined or buy one dlc for twice the profit? How accurately do you weight the contents of a DLC before buying? I'd love to say I'd shell out more money for more content, but deep down, I don't think my estimate of value is accurately scaled to the effort of content that went into it. Also, the forum going crowd is going to be the more interested customers, so if we all say we'd subscribe to 15$ a month, Brad still couldn't easily extrapolate that out to his general customer base.

This one is just for fun.  (and by the way, I was trying to help Gazing, not defame him)

Say you have 2 expert widget makers at your company (This is the real world mind you) toiling away continuously making widgets (not all are perfect).

One widget maker has a brain hemorrhage and... suddenly production slows to 50% instantly.  What do you do?...

The point I was trying to make is that the widget maker is paid by the Widget Co.  Widget Co, then employs a top level Widget Co employee to hire/fire/replace or destroy the new incoming widget maker(s).  The overhead (wages/taxes/rent/ insurance, etc.) IS HUGE!

None of that will make sense to people not in business.  I encourage you to understand it though, and that's why Im thankful that Brad puts out any info at all.  He doesn't have to.

Try to do it Gazing!  Like I said; I wish you the best, but it aint easy.  Words don't make money but in a book, or in the press.

Edit! Alert!  I get paid in celery, so I did make some money typing that.  The carrot,... I'm still chasing.

Oh nice. How did I miss this thread?

Looking forward to new DLCs.

How will spouses be handled for custom sovereigns? 

First, thank you a lot to Frogboy for posting this. I am very interested into the mechanics of game development.

I have just a comment on the following statement:

"For LH, that means I could justify 3 resources on it before taking opportunity costs into account.  Once I consider opportunity costs, the number declines to 1 because those other 2 resources are better off on Galactic Civilizations III or Star Control or “Elemental 3” or what have you."

This points to the fact that the hiring process in game development is a tough part, i.e. that you should make your plans assuming that you cannot hire in the short term. In fact, if you could hire, you would be better off hiring two more people and staffing them on LH to cover for the two that you are better off staffing on Gal Civ III...  human resources are the key ...