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Exploring an optimal way to split profit amongst our small team

05-01-2013, 02:10 AM
#1
Joined: Apr 2013
Location: Barcelona/London
Posts: 26
Exploring an optimal way to split profit amongst our small team

Hello, fellow Devs!

We announced our game recently. It's time to start building some administrative infrastructure!

We're three friends making the game. We'll split the profits in three thirds as they come.

Our question is, should we set up a company (one of us lives in the UK, where we've heard it's cheap and easy to do) and distribute our earnings from there? Or would it be better for one of us, currently self-employed, to publish the game under his name and then pay the others doing the appropriate bills for services?

We'd like to hear about your experience on the matter.

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Last edited by Pícaro Games; 05-01-2013 at 05:57 AM.
05-01-2013, 02:01 PM
#2
Joined: May 2012
Location: Europe, CET timezone
Posts: 943
Hhmm, best address for you might be the guys who made Spellcraft.
They are also in different countries, and one of them in the UK.
There website is "spellcraft-ccg.com" , and they are also active here:
Steve at Three Goblins, Markturner_goblin, and Mike's handle I cannot remember.

Should you contact them, tell them Sheinfell says hi

If you talk about "cheap and easy" to setup a company in the UK, you most likely will want to look at a Ltd. . You can even start those when you are not UK-based, but I have no idea about the details.

05-01-2013, 05:17 PM
#3
Joined: Feb 2011
Location: Isle of Wight, UK
Posts: 1,502
I would go with posting them some money over paypal until you earn enough for these details to matter.

Setting up a brass plate company is easy, but that's a relative term. It's not a piece of piss to do it for real as there are lots of legal things related to either hiring employees, paying subcontractors or worse, forming a partnership. If the others only get money from you (and maybe a full time job) then the authorities won't allow them to classed as subbies and you'll need to pay them as employees even if they're not.

Do you want to do all that before you find out the game makes 10 dollars a day? (The average is $17 a lifetime, so $10 a day is way above average.) If it works out, you can do all this stuff retroactively up to a year out after your first payout.

Last edited by Rubicon; 05-01-2013 at 05:23 PM.
05-01-2013, 05:34 PM
#4
Whoever holds the iTunes connect account gets the money and splits up with the rest. You gotta pay taxes individually for your earnings.
Quote:
Originally Posted by Rubicon View Post
(The average is $17 a lifetime, so $10 a day is way above average.) If it works out, you can do all this stuff retroactively up to a year out after your first payout.
You gotta be kidding. $17 a lifetime? What do you have to do to "achieve" that? Leave iTunes description empty?
05-01-2013, 06:08 PM
#5
Joined: Jul 2010
Posts: 239
Quote:
Originally Posted by MarkFromBitmenStudios View Post
Whoever holds the iTunes connect account gets the money and splits up with the rest. You gotta pay taxes individually for your earnings.
Would each really pay taxes for their own share, or would the holder of the iTunes connect account pay income tax for the whole thing, and then the other guys also pay income tax on their share? If there's no company, wouldn't the account holder technically be earning the whole thing as income and then "spending" it by giving it to the other partners? I'm curious because I'd just always assumed it would be this way.
05-01-2013, 07:41 PM
#6
Joined: Sep 2010
Location: Alaska
Posts: 41
"...or would the holder of the iTunes connect account pay income tax for the whole thing, and then the other guys also pay income tax on their share?"

(I'm not an accountant - you should really find one to ask these kinds of questions...)

Yes, the holder of the iTunes account would pay tax on the entire amount, but he'd also be declaring the payouts to the other guys as business expenses, so that would affect what he'd be paying taxes on.

Jay

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05-01-2013, 08:26 PM
#7
Joined: Jul 2010
Posts: 239
Quote:
Originally Posted by J. A. Whye View Post
"...or would the holder of the iTunes connect account pay income tax for the whole thing, and then the other guys also pay income tax on their share?"

(I'm not an accountant - you should really find one to ask these kinds of questions...)

Yes, the holder of the iTunes account would pay tax on the entire amount, but he'd also be declaring the payouts to the other guys as business expenses, so that would affect what he'd be paying taxes on.

Jay
Thanks, mine was just idle curiosity. I didn't expect an individual could declare payouts as a business expense (but then again this probably varies a lot by country anyway)
05-01-2013, 09:42 PM
#8
Joined: Dec 2012
Location: Drummondville, Qc, Canada
Posts: 438
Quote:
Originally Posted by MarkFromBitmenStudios View Post
Whoever holds the iTunes connect account gets the money and splits up with the rest. You gotta pay taxes individually for your earnings.

You gotta be kidding. $17 a lifetime? What do you have to do to "achieve" that? Leave iTunes description empty?
There's so much crap out there that I believe that stat although it's probably more a median value than an average.

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05-01-2013, 11:48 PM
#9
Joined: May 2012
Location: Europe, CET timezone
Posts: 943
Quote:
Originally Posted by MarkFromBitmenStudios View Post
You gotta be kidding. $17 a lifetime? What do you have to do to "achieve" that? Leave iTunes description empty?
I read numbers in that range, too, so I'd say that is more or less correct.
05-02-2013, 12:42 AM
#10
I read somewhere that the average is a bit less than 8k and the median a bit less than 300, even though all data on that issue is a bit unreliable. 17$ lifetime income would indeed be sick. Just imagine how many apps you'd need to make up for the yearly 99$ iOS dev membership over - say - 3 years.