CHAPTER 44: CHAPTER 44: MERELY MEDIOCRE, THAT WOULD BE ME

Chen Yiyang quickly went through the documents handed over to him.

This game is a simple independent game. The content is roughly about you being an old father raising a daughter from childhood, and depending on your choices in the game, your daughter will have different lives in the future.

The gameplay seems very ordinary. The only merit is the hand-drawn art style, which looks very appealing.

After all, when raising a daughter, at the very least, she should be beautiful, right?

Of course, Chen Yiyang is not a professional investor.

But the insider information already told him the final sales of this game, so reverse-engineering the expected profit isn’t difficult.

Thus, he asked, "So how much is the current cost of this game and how much do you plan to sell each unit for?"

"We plan to sell each unit for 35 yuan, but to boost sales, new games typically offer a ten to twenty percent discount at launch.

We’re planning to sell this new game at a fifteen percent discount, which would make the price around 29 yuan per unit.

As for the cost, since it’s an independent game, the three people responsible for development are all doing it part-time, which means they all enjoy ownership of the game.

We initially set the total cost at one million yuan; if you invest, the profit sharing will be calculated based on this total cost."

The information suggests that the final sales price of this game is one million units. Generally, games will be discounted as they approach the later stages of their sales cycle.

If the highest sales happen at launch with a discount, then the actual selling price is indeed 29 yuan per unit.

One million multiplied by 29 estimates a final profit of 29 million yuan.

Steam platform will take approximately a thirty percent cut.

That leaves roughly 20.3 million yuan.

Thinking about this, Chen Yiyang continued to inquire, "If the final profit of this game exceeds one million yuan, have you considered how to convert this into legal income, directly establishing a studio for taxation, or transferring money to overseas accounts in a personal capacity?"

"We’ve researched this before, but it’s quite complex and there are parts we’re unclear on."

Liu Mei, the girl, scratched her head and said,

"Actually, our expectation for the game is to sell fifty thousand units, so the amount we can take home isn’t much.

Because the platform automatically assists us in paying taxes in the United States before giving us the money, we can declare this money as VAT-exempt income domestically."

"I suggest you still establish a studio," Chen Yiyang thought for a moment.

If it’s in the tens or hundreds of thousands, this method may work. But if the game’s final income exceeds twenty million yuan, paying taxes as individuals is too high.

"If the final profit goes beyond one million yuan, after paying taxes in the United States, you will need to pay domestically as well, which is very costly.

If you sell the game under a studio, you can first establish a studio and then certify it as a small microenterprise. This way, the tax rate is around twenty percent.

While the Steam platform will pay a fifteen percent tax in the United States on your behalf, you only need to pay an additional five percent domestically.

After establishing the studio, you can set a salary for yourselves. When the money arrives, transfer a part under the studio’s name to individuals, which won’t require additional tax."

"So are you planning to invest in us?" Liu Mei lifted her head excitedly.

"Of course, I’ll personally invest three hundred thousand yuan, and take thirty percent of the total profit. How does that sound?"

"No problem." Liu Mei agreed happily.

Frankly speaking, they could come up with three hundred thousand personally, but having an investor means they don’t have to pay this out-of-pocket.

The game is already made and awaiting launch.

With this three hundred thousand, they can have some gaming media write a few articles letting players know that this game is coming soon.

Then they will invite some small streamers to live-stream the game for one or two hours after it’s launched.

If the game doesn’t sell a few copies after launch, then the money is basically thrown away.

"Thirty percent profit from three hundred thousand, no problem. We can sign a contract." Liu Mei said happily.

Although she mentioned the game’s cost was one million, this one million is essentially an estimate.

Since the game is made by her and her roommates part-time, labor costs are virtually zero. The so-called one million refers to the time and effort they put in.

And Chen Yiyang is genuinely investing three hundred thousand yuan for thirty percent of the total profit, which is undoubtedly justified.

"Actually, I expect the sales of this game to exceed one hundred thousand units."

Chen Yiyang took a sip of coffee and said to Liu Mei,

"So why don’t we do it this way? No need for any investment contract. We directly set up a studio with the four of us, I’ll invest three hundred thousand yuan for thirty percent of the studio’s shares.

If the game makes money later, after income tax is paid, all the money will be kept on the studio’s accounts and distributed monthly under the guise of salary."

"That way, we can avoid a lot of tax, plus a game generally doesn’t sell a lot in a short period.

There’s usually quite a long sales cycle, and during this cycle, we can gradually take profits as salary."

"But, if we do this wouldn’t we need to hire an accountant?" Liu Mei was a bit worried.

She hadn’t expected Chen Yiyang to have so much confidence in the game.

If the game does indeed sell over one hundred thousand units, it would warrant setting up a gaming studio.

Otherwise, personal income tax would eat up roughly half of the earnings. But establishing a studio means hiring an accountant to handle financial affairs.

"I’ll handle the accounting. I’ll pay the accountant’s salary initially, and before the studio makes money, it won’t be included in the studio’s operating costs. Once the studio generates profit, we’ll sign a formal contract with the accountant and the studio will pay the salary."

Chen Yiyang had already thought it through, intending to get Shen Yifan into the mix.

After establishing the studio, even though he owned thirty percent of the shares, the other side had seventy percent, which meant absolute control over the company.

He felt he had to hold onto financial rights to feel secure.

Considering a game sales figure of 1 million units after taxes, the studio could earn around 16.24 million.

Thirty percent of that is about 4.87 million.

If this 4.87 million isn’t slowly paid to him as salary from the studio, the tax deduction would take away more than half.

"No problem," Liu Mei agreed.

Actually, Chen Yiyang had thought a lot on his side, but Liu Mei wasn’t concerned at all, or rather didn’t care.

They were just three good friends who had the time and idea, so they made a game together.

As long as they can make money, they’re happy. Who could have imagined the game would sell a million copies?

What does it mean for a standalone buyout game to sell a million copies?

Let’s look at the sales situation of domestic buyout games in ’22.

The entire industry sold a total of 2.07 billion, with the top seller only having sold 1.42 million copies.

Therefore, in this context, Chen Yiyang dared only to hope this game would sell a hundred thousand copies.

If he directly told the other party, "Your game can sell a million copies," it’s like randomly picking a newbie author from a group of authors and telling him, "Your book can surpass the top author and straight reach platinum status."

After finalizing some details with Liu Mei, Chen Yiyang called Shen Yifan to tell her he had found her a part-time job.

"Is there extra pay?" Shen Yifan quickly arrived.

"Not at the moment. Anyway, the shop doesn’t need you. Just treat it as working here. But once the studio starts making profits, you can receive an extra salary from there."

"That’s good." Shen Yifan smiled quite happily. After all, hanging around the shop without doing anything, having something to do is always better.

She planned to pay off her debts early and move out of the house Chen Yiyang had arranged for her soon.

She could tell, the boss and Sister Yuning didn’t seem like they were in a typical romantic relationship.

Perhaps the boss was supported by some rich woman above.

If one day this fact was exposed, as someone who knew the details, she’d be in trouble.

Better to leave early for safety.

After hanging around with a group of construction bosses for several years, Shen Yifan had become excellent at digging into gossip.

Meanwhile, Chen Yiyang was also troubled lately.

This investment in an indie game, though the profits would be great, couldn’t be obtained immediately.

Plus, having offered another three hundred thousand, the cash he had was approaching the one million safety line.

Moreover, he still owed the pawnshop over a million.

He wasn’t in a hurry to sell those bank shares. The only thing he could sell was that foreclosure property that could be transferred in a few days.

So Chen Yiyang went to the pawnshop to have tea with the manager.

"That foreclosure property, we noticed it too." The pawnshop manager would certainly pay attention to all the auctions held in Jin City.

"But that property is quite troublesome. The debtor has already fled abroad, leaving just that property to his eighty-year-old father to live in."

That old man’s health is quite good, and last time when court officials went to clear the property, he chased them away with a broom.

Given his age and good health, even people with some shady background in Jin City are reluctant to buy that property.

The usual approach would be to find someone to move into the property and refuse to leave.

But for this old man, if you don’t leave, he really might attack you with a knife. Unless he puts you in the hospital, the police won’t intervene.

Hence, we merely checked into it and decided not to buy it. Why bother causing trouble for ourselves over a single property?"

The manager laughed as he said this,

"But when I checked a few days ago, some fool had bought the property out of nowhere."

Probably some ordinary person who didn’t understand the situation and thought they were getting a bargain, but they’re really in trouble now."

"The fool you mentioned," Chen Yiyang pointed to himself and said, "That’s me."

The manager abruptly shut his mouth.

He hadn’t expected Chen Yiyang to be the one who bought the property.

Why, though?

The manager looked at Chen Yiyang as if he was meeting him for the first time.

"Stop staring," Chen Yiyang didn’t know what the manager was thinking at that moment, so he directly said, "If I can clear out the property, do you have any clients interested in buying?"

"Let’s be clear upfront," the manager said worriedly, "If any methods causing social controversy are used to clear the property, you better not say you prepared to sell it here. The scrutiny upstairs is tight lately, and public opinion is being fully monitored. I don’t want any trouble."