Paraguayan Indie Game Revenue: Steam, Epic, and Taxation in 2026
You've developed an independent video game—a pixel art roguelike, a narrative puzzle game, a city builder, a Metroidvania, a survival horror. You publish it on Steam, Epic Games Store, GOG, itch.io, and maybe on consoles (Nintendo Switch, PlayStation, Xbox). The game finds its audience. Sales take off. Streamers talk about it. Revenue starts flowing in: €5,000/month, €20,000/month, sometimes €100,000+/month during the first few weeks of launch. This is every indie developer's dream—to turn years of passionate work into commercial and creative success.
In France, this dream is taxed at 45-60%. The state takes half of your success—even before you've recouped your years of unpaid development. In Paraguay, these same revenues are taxed at 0%. Steam (Valve Corporation, Bellevue, Washington), Epic Games (Cary, North Carolina), GOG (CD Projekt, Poland), itch.io (USA)—all these platforms pay out revenues from abroad. Foreign source → Paraguayan territoriality → 0%. This guide covers the taxation and structuring of independent video game revenues for a developer based in Paraguay.
The Independent Video Game Market in 2026
The Indie Ecosystem
The independent video game market is constantly growing—driven by the democratization of development tools (Unity, Unreal, Godot), digital distribution (Steam, Epic), and players' appetite for original experiences:
- PC Market: Steam dominates with ~75% of PC sales. ~15,000 new games are published on Steam each year. The total PC gaming market is estimated at ~40 billion USD/year.
- Console Market: Nintendo Switch is the most welcoming console for indies (portability, receptive audience, simplified publishing process). PlayStation and Xbox also have indie programs, but competition is tougher.
- Mobile Market: covered in our mobile apps guide. Indie mobile gaming is a distinct segment with its own dynamics.
- The "Indie Boom": successes like Hollow Knight (~20 million USD in revenue), Stardew Valley (~100+ million USD), Hades (~60+ million USD), and Vampire Survivors (~50+ million USD) have shown that teams of 1-15 people can compete with AAA studios in terms of revenue—with incomparably higher margins.
Indie Developer Revenue
| Level | Total Sales (lifetime) | Net Revenue (after store commission) | % of Games Published |
|---|---|---|---|
| Commercial Failure | < 5,000 copies | < 25,000 USD | ~70 % |
| Viable | 5,000-50,000 copies | 25,000-250,000 USD | ~20 % |
| Moderate Success | 50,000-500,000 copies | 250,000-2,500,000 USD | ~8 % |
| Hit | 500,000-5,000,000 copies | 2,500,000-25,000,000 USD | ~1.5 % |
| Mega-hit | 5,000,000+ copies | 25,000,000+ USD | ~0.5 % |
Revenue distribution is extremely uneven: 70% of indie games lose money. But the 10% that succeed generate revenues from 250,000 to 25+ million USD—amounts that make tax optimization massively relevant. A solo developer who sells 100,000 copies at €15 (net revenue ~€1,050,000 after Steam commission) saves ~€500,000+ in taxes by being in Paraguay rather than France.
Distribution Platforms: Commissions and Payments
Steam (Valve Corporation)
- Headquarters: Valve Corporation, Bellevue, Washington, USA.
- Commission: 30% on the first 10 million USD in sales, 25% between 10 and 50 million USD, 20% beyond that. For most indies: 30% fixed.
- Payment: Valve pays monthly, 30 days after the end of the month. Minimum: 100 USD. ACH transfer (for US accounts → Mercury Bank) or SWIFT (non-US accounts).
- Steamworks (developer portal): in the financial settings, configure your US LLC as the beneficiary entity. Provide the W-9 (US LLC, EIN). Bank details: Mercury Bank (routing number + account number for ACH).
- VAT: Steam acts as the Merchant of Record in most countries. Steam collects and remits VAT (EU, UK, Australia, Japan, etc.) on behalf of the developer. You receive the sale price excluding VAT, minus the 30% commission. No VAT obligation for you.
- Refunds: Steam offers automatic refunds to players who request them within 14 days of purchase AND have played for less than 2 hours. Refunds are deducted from your revenue. Typical refund rate: 5-15% of sales.
- Steam Sales: Steam organizes massive sales 4 times a year (Winter Sale, Summer Sale, Spring Sale, Autumn Sale). Your game can be discounted by 20-80% during these events. Sales generate massive spikes in sales—often 50-70% of a game's annual sales occur during these sales.
Epic Games Store
- Headquarters: Epic Games, Cary, North Carolina, USA.
- Commission: 12%—significantly less than Steam (30%). This is Epic's main argument for attracting developers. The developer keeps 88% of the sale price (vs 70% on Steam).
- Payment: Epic pays monthly via Hyperwallet (third-party payment service). Methods: bank transfer, PayPal. Configure your US LLC + Mercury Bank in the Epic developer portal.
- Exclusivity: Epic sometimes offers temporary exclusivity deals to indie developers—a guaranteed payment (often equivalent to projected sales over 6-12 months) in exchange for exclusivity on the Epic Games Store for 6-12 months. These deals are lucrative (guaranteed revenue, no commercial risk) but controversial (exclusion from Steam during the exclusivity period → discontent from the PC community).
- Payment for an exclusive deal: the guaranteed payment is made by Epic Games (USA) → US LLC → Mercury Bank. Foreign source → 0% in Paraguay. The exclusivity deal is a commercial contract between Epic and your US LLC—not a sale to a player. The tax qualification is service revenue (exclusive license)—from a US source = 0% PY.
- VAT: Epic acts as MoR and handles VAT like Steam.
GOG (Good Old Games)
- Headquarters: GOG sp. z o.o. (CD Projekt subsidiary), Warsaw, Poland.
- Commission: 30% (standard). Negotiable for major titles.
- Special Feature: GOG specializes in DRM-free (Digital Rights Management) games—players buy the game without copy restrictions. This is a strong philosophical argument for certain gaming communities. Sales volume on GOG is significantly lower than Steam (~5-10% of Steam volume for the same game), but the audience is loyal and engaged.
- Payment: GOG pays via bank transfer. Paying entity: GOG sp. z o.o. (Poland). Foreign source for Paraguay → 0%.
- VAT: GOG handles VAT as MoR.
itch.io
- Headquarters: itch.io, USA.
- Commission: the developer chooses the commission rate (0% to 100%). Default: 10%. You can set 0% (itch.io takes nothing)—but most developers leave 10% as support for the platform.
- Special Feature: itch.io is the preferred platform for experimental games, prototypes, game jams, and free or "pay what you want" games. Less commercial volume than Steam but a very engaged community (artists, independent creators, experimenters).
- Payment: PayPal or Stripe. Configure Stripe in the name of your US LLC → Mercury Bank.
- VAT: itch.io offers to handle VAT via the "Collect tax" option, but it's less robust than Steam/Epic. For significant sales, verify VAT compliance with your accountant or use itch.io as a secondary channel (Steam/Epic as primary channels).
Consoles: Nintendo Switch, PlayStation, Xbox
- Nintendo (Switch): 30% commission. Nintendo Developer Portal program. Monthly payment via transfer. Paying entity: Nintendo of America (USA) or Nintendo of Europe (Germany) depending on the region. US LLC + W-9 for US payments. Foreign source → 0% in PY.
- PlayStation (PS5/PS4): 30% commission. PlayStation Partners program. Monthly payment. Paying entity: Sony Interactive Entertainment (USA/Japan). Publishing process more complex than Steam (certification, QA, development kit ~2,500 USD).
- Xbox (Series X/S, PC): 30% commission (reduced to 12% for sales via the Microsoft Store on PC in some cases). ID@Xbox program. Paying entity: Microsoft (USA). Relatively simple publishing for independents.
- Cross-platform: publishing on all 3 consoles + PC (Steam/Epic) multiplies reach. Most game engines (Unity, Unreal, Godot) support cross-platform compilation. The additional cost is mainly porting, testing, and certification time (no license fees for registered developers, except console development kits if needed).
Platform Summary Table
| Platform | Commission | Paying Entity | Geographical Source | PY Tax |
|---|---|---|---|---|
| Steam | 30 % | Valve Corporation (USA) | Foreign (USA) | 0 % |
| Epic Games Store | 12 % | Epic Games (USA) | Foreign (USA) | 0 % |
| GOG | 30 % | GOG sp. z o.o. (Poland) | Foreign (Poland) | 0 % |
| itch.io | 0-10 % (dev's choice) | itch.io (USA) | Foreign (USA) | 0 % |
| Nintendo Switch | 30 % | Nintendo of America (USA) | Foreign (USA) | 0 % |
| PlayStation | 30 % | Sony Interactive (USA/Japan) | Foreign (USA/Japan) | 0 % |
| Xbox | 30 % (12 % PC store) | Microsoft (USA) | Foreign (USA) | 0 % |
All platforms are foreign entities (USA, Poland, Japan). All payments are from foreign sources. All revenues are 0% in Paraguay. The nature of the platform (PC, console, mobile) does not change the taxation—only the geographical source of payment matters.
Optimal Structuring for an Indie Developer in Paraguay
The Complete Scheme
- Paraguayan residency (from €1,400). Cédula + RUC. Tax base.
- US LLC (Wyoming). Entity that holds developer accounts for Steam, Epic, Nintendo, etc. Billing entity for exclusivity deals, publishing contracts, and ancillary revenues.
- Mercury Bank: US LLC bank account. Destination for all payments (Steam ACH, Epic Hyperwallet, Nintendo wire transfer, itch.io Stripe).
- Developer accounts: Steam (Steamworks), Epic (Epic Developer Portal), Nintendo (Nintendo Developer Portal), PlayStation (PlayStation Partners), Xbox (ID@Xbox)—all in the name of the US LLC, with W-9 and Mercury Bank details.
- DNIT accounting (€30/month). Annual IRP declarations. Tax residency certificate.
- Interactive Brokers: investment of profits (ETFs, bonds). Wealth grows at 0% in Paraguay.
Withholding Tax and W-9
Same logic as for mobile apps (see our mobile apps guide):
| Situation | Form Provided | US Withholding Tax |
|---|---|---|
| With US LLC | W-9 (domestic US entity) | 0% (domestic US payment → US) |
| Without US LLC (individual PY resident) | W-8BEN (non-US person) | 30% on US-sourced income (sales to US players). 0% on non-US sales. |
The US LLC eliminates the 30% withholding tax on the American portion of your sales. If 40% of your Steam sales come from the USA and your total revenue is 500,000 USD/year → avoided withholding: 30% × 200,000 USD = 60,000 USD/year. Over the lifetime of a successful game (5+ years): hundreds of thousands of dollars saved thanks to the US LLC.
Tax Comparison: Moderate Indie Success
Scenario: Game sells 100,000 copies at €15 on Steam
| Item | France (BNC réel / EURL) | Paraguay (US LLC) |
|---|---|---|
| Gross sales (100,000 × €15) | €1,500,000 | €1,500,000 |
| VAT collected by Steam (MoR) — not received by dev | Deducted upstream | Deducted upstream |
| Steam Commission (30%) | -€450,000 | -€450,000 |
| Net developer revenue | €1,050,000 | €1,050,000 |
| Deductible expenses (2 years of dev: software, hardware, subcontracting, music, assets) | -€50,000 | -€50,000 (US LLC expenses) |
| Taxable profit | €1,000,000 | €1,000,000 (0% PY) |
| IR + PS + CEHR | ~€430,000 (45% bracket + 17.2% PS + 4% CEHR) | €0 |
| TNS contributions | ~€120,000 (partial cap) | €0 |
| Accounting | ~€5,000 | ~€3,000 (US CPA + PY accountant) |
| Total withheld | ~€555,000 | ~€3,000 |
| Net retained | ~€445,000 | ~€997,000 |
| Savings in Paraguay | ~€552,000 | |
The indie developer in Paraguay retains ~€997,000 vs ~€445,000 in France. The difference of ~€552,000—more than half a million euros—on a single game. This is enough to fund 3-5 years of development for the next game (without revenue), buy a premium apartment in Asunción, and build an investment portfolio of 500,000+ € that generates passive income for life.
For a mega-hit of 1 million copies (€10,500,000 in net Steam revenue): the savings exceed 5 million euros. This is the difference between the indie developer who remains independent for life and the one who has to accept an unfavorable publishing contract to pay their taxes.
Ancillary Revenue for the Indie Developer
DLC (Downloadable Content)
DLCs are paid extensions to your game (new areas, characters, stories, cosmetics). They are sold through the same platforms as the main game:
- Typical Price: €5-€20 per DLC. Popular games can release 2-5 DLCs over their lifetime.
- Conversion Rate: 10-30% of game owners buy the DLC. A game with 100,000 owners can sell 10,000-30,000 copies of each DLC.
- Taxation: Same as the main game. 30% Steam commission, Valve payment → US LLC → Mercury Bank → 0% in Paraguay.
- DLC strategy: DLCs extend the commercial lifespan of the game and generate additional revenue from content already amortized. It's an excellent effort-to-revenue ratio: DLCs are smaller and faster to develop than a full game, and they benefit from an existing audience.
Soundtracks and Art Books
- Soundtrack: Sold on Steam as a separate DLC (€5-€10). Also available on Bandcamp (~15% commission), Spotify (streaming revenue), and Apple Music. Popular indie game soundtracks sell 5,000-50,000 copies. Taxation: same treatment (foreign source → 0% PY).
- Digital Art Book: Sold on Steam (€5-€15) or on your website (Gumroad). Contains concept art, sprites, and game illustrations. Modest but valuable additional revenue for fans.
Merchandising
Successful games generate merchandising revenue (T-shirts, posters, figurines, plush toys):
- Print on demand: Teespring/Spring, Redbubble, Merch by Amazon. No inventory — products are printed and shipped upon order. Commission: 30-50% (the platform manages production + shipping). Modest revenue ($500-$5,000 USD/month for a popular game).
- Premium merchandising: Collaboration with specialized manufacturers (Fangamer, iam8bit) for quality physical products (vinyl soundtracks, collector figurines, printed art books). Higher revenue but requires a game with a dedicated fanbase.
- Taxation: Print on demand revenue (Teespring US, Redbubble Australia) is from foreign sources → 0% PY. Premium merchandising revenue (if invoiced via your US LLC) → same treatment.
Publisher Deals
Some indie developers sign with a publisher who funds development and/or marketing in exchange for a share of the revenue:
- Typical terms: The publisher advances €50,000-€500,000+ for development + marketing. In exchange, the publisher takes 30-50% of net revenue (after store commission) until the advance is recouped, then 20-30% after recoupment. Some deals also include franchise rights (the publisher owns the rights to the game or its sequels).
- Popular indie publishers: Devolver Digital (USA), Team17 (UK), Annapurna Interactive (USA), Raw Fury (Sweden), Coffee Stain Publishing (Sweden). All foreign entities.
- Deal taxation: The publisher's advance is a payment from a foreign source (US/UK/Swedish publisher) to your US LLC. Shared sales revenue goes through the platform (Steam → publisher → developer, or Steam → developer directly depending on the contract). In both cases: foreign source → 0% in Paraguay.
- Withholding tax on the advance: If the publisher is American and pays the advance to your US LLC (US domestic entity, W-9): no withholding. If the publisher is European (UK, Sweden) and pays to your US LLC: no withholding (the US-UK/US-Sweden tax treaty eliminates withholding on inter-company commercial payments, and your LLC is a US entity benefiting from these treaties).
Crowdfunding (Kickstarter / Fig / Indiegogo)
Crowdfunding is a popular funding channel for indie games:
- Kickstarter: Headquartered in Brooklyn, New York. Commission: 5% + payment processing fees (~3-5%). Funds are paid to the creator if the goal is met ("all or nothing" model). Payment via Stripe → Mercury Bank (US LLC).
- Qualification of Kickstarter funds: Kickstarter funds are NOT donations — they are pre-sales (backers receive the game upon release) or rewards (beta access, name in credits, collector's edition). This is taxable commercial income in France (BIC/BNC). In Paraguay: foreign source (Kickstarter US) → 0%.
- Timing: If you launch a Kickstarter BEFORE you move to Paraguay (still a French resident), the funds are taxable in France. Launch the Kickstarter AFTER your move to Paraguay to benefit from 0% territoriality.
Streaming and Video Content Revenue
Many indie developers create content around their game development (YouTube devlogs, Twitch streams, podcasts):
- YouTube AdSense: Advertising revenue from devlogs. Source: Google US/Ireland → 0% PY. US LLC eliminates US withholding (W-9 vs W-8BEN).
- Twitch: Subscriptions + Bits + ads. Source: Twitch/Amazon US → 0% PY.
- Patreon: Recurring fan support during development. Source: Patreon US → 0% PY. See our Patreon guide.
This content revenue is often the indie developer's "salary" during the 2-3 years of development (before the game's release). In Paraguay: 0% on these revenues as well. The indie developer funds their development via Patreon/YouTube/Twitch at 0%, then sells the finished game on Steam at 0%. The entire cycle — funding, development, sales, DLC, merchandising — is at 0%.
Game Engines: Licenses and Royalties
Unity
- 2026 License Model: Unity reversed its controversial "Runtime Fee" of 2023. The current model is a monthly subscription: Unity Personal (free up to $200,000 USD revenue/year), Unity Plus (~$200 USD/year), Unity Pro (~$2,000 USD/year for studios > $200,000 USD revenue).
- Taxation: The Unity license is a cost (not revenue). It is paid by your US LLC to Unity Technologies (USA). It is a deductible expense for your US LLC. No impact on your PY tax (which is already 0% on foreign income).
Unreal Engine
- License Model: Unreal Engine is free up to $1 million USD in revenue per product. Beyond that: a 5% royalty on gross revenue. Exception: sales via the Epic Games Store are royalty-exempt (Epic does not charge royalties on Unreal-powered games sold on its own store).
- Taxation of Unreal royalty: The royalty is a cost paid by your US LLC to Epic Games (USA). It is a deductible expense. No impact on your PY tax. If your game exceeds $1 million USD in revenue on Steam: 5% Unreal royalties are added to the 30% Steam commission → you keep 65% (instead of 70%). On Epic Games Store: 12% commission + 0% Unreal royalties = you keep 88%.
Godot
- License Model: Godot is 100% free and open-source (MIT license). No royalties, no fees, no commission. You keep 100% of your revenue (after store commission).
- The rising alternative: Godot is gaining popularity among indie developers (especially after the 2023 Unity controversy). It's the most economical engine — €0 license + 0% royalties + 0% PY tax = the perfect combo.
Game Development from Paraguay
Equipment and Environment
- Computer: A powerful development PC (or Mac for Unity/Unreal developers on macOS). Budget: $1,500-$3,000 USD. Available in Asunción (Nissei, Salemma, Cell Shop, CDE importers). PC components (GPU, RAM, SSD) are available locally — sometimes more expensive than in the USA (+10-30%) but without international shipping costs.
- Test consoles: If you're developing for Nintendo Switch, PlayStation, or Xbox, you need development kits (dev kits). Dev kits are loaned or sold by manufacturers to registered developers: Nintendo Switch dev kit (~$450 USD), PlayStation dev kit (free or ~$2,500 USD depending on the program), Xbox dev kit (a normal Xbox can serve as a dev kit via the Xbox App).
- Internet: Fiber optic 100-500 Mbps in Asunción. Sufficient for uploading builds to Steam (a 2 GB game uploads in 30-60 seconds on fiber), team coordination calls (Discord, Slack), and streaming devlogs.
- Noise and environment: Game development is a quiet activity (no microphone needed for coding). If you record devlogs or streams, the same precautions as for content creators apply (acoustic treatment, quiet hours). See our newsletter guide internet section.
Recruiting Collaborators from Paraguay
Indie games are often developed by small teams (1-10 people). From Paraguay, you can recruit:
- Freelance artists: Concept art, pixel art, 3D modeling, animation. Via Fiverr, ArtStation, DeviantArt. Paid by your US LLC (Mercury Bank). Rates: $500-$5,000 USD for an asset pack. Foreign source of the provider (if living outside PY) → deductible US LLC expense.
- Musicians/Sound designers: Original soundtrack, sound effects. Via Fiverr, SoundBetter, or direct contact. Rates: $1,000-$10,000 USD for a complete indie game soundtrack.
- Complementary developers: Network programming (multiplayer), optimization, console porting. Via Upwork, Toptal, or the indie network (indie developer Discord). Rates: $30-$150 USD/hr depending on expertise.
- QA testers: Local testers in Paraguay ($500-$1,000 USD/month) or via participatory testing platforms (PlaytestCloud, UserTesting). Local testers are employed via your Paraguayan SRL if formally hired.
- Localizers/Translators: Your game should be translated into 5-15 languages to maximize global sales (English mandatory, then Simplified Chinese, German, French, Spanish, Japanese, Korean, Brazilian Portuguese, Russian, Turkish). Via Gengo, OneSky, or freelance translators. Rates: $0.05-$0.15 USD/word. Localization budget for an average indie game: $3,000-$15,000 USD.
The Indie Game Community in Paraguay
Paraguay is not (yet) a recognized hub for independent video games — but the local scene is developing:
- Paraguay Game Devs: A local community of game developers (Discord, meetups in Asunción). Small but active.
- Universities: IT departments at Paraguayan universities (UNA, UC, UCA) produce competent developers — some interested in video games. The local talent pool exists (even if small compared to Brazil or Argentina).
- Events: No GDC or devcom in Paraguay (for now). Major indie events are in the USA (GDC San Francisco), Europe (devcom Cologne, Nordic Game Malmö), and Latin America (BIG Festival São Paulo). Plan 2-3 trips/year for international indie networking.
Intellectual Property: Protecting Your Game
Copyright on Video Games
A video game is a complex multimedia work protected by copyright. Protected elements include:
- Source code: Protected as a literary work (even if no one "reads" it — code is a creative expression).
- Graphic assets: Sprites, 3D models, textures, UI, illustrations → protected as visual art works.
- Music and sound effects: Protected as musical works.
- Scenario and dialogues: Protected as literary works.
- Game design: Game mechanics (gameplay) are generally NOT protectable by copyright (they are "ideas" or "methods," not "expressions"). But the specific implementation of a mechanic (the code, visuals, unique combination) is protectable.
- Game title: Protectable as a trademark — to be registered if the game is a commercial success.
Intellectual Property Registration
- Automatic copyright: Copyright is automatic upon creation (Berne Convention, signed by Paraguay). No registration needed. But registration (US Copyright Office, ~$55 USD) strengthens protection in case of dispute (statutory damages, presumption of ownership).
- Trademark: If your game is a success, register the name as a trademark in the USA (USPTO, ~$250-$350 USD per class) and/or in the EU (EUIPO, ~850 EUR). Trademark registration protects the name against copycats and imitators.
- US LLC ownership: If IP rights are assigned to your US LLC (via an "IP Assignment Agreement"), the LLC owns the game. This is important for publishing deals (the publisher deals with the LLC, not with you personally) and for a potential sale of the game (you sell the LLC or its assets, not the game personally).
Clones and Piracy
- Clones: Unscrupulous developers copy the mechanics and look of successful indie games (especially on mobile). Protection is limited (mechanics are not copyrightable). Your best defense: a strong brand (recognized name), a loyal community (fans distinguish the real from the fake), and quality that cannot be easily cloned.
- PC Piracy: PC games without DRM are easily pirated (torrents). Steam games with DRM (Steamworks DRM) are cracked in a few days/weeks. The impact on sales is debated — many indie developers believe piracy has a marginal impact (pirates wouldn't have bought it anyway) and that free publicity compensates (pirates who like the game tell potential buyers).
- Nintendo Switch: The Switch is harder to pirate than PC → Switch sales are often "cleaner" (less piracy). This is an argument for publishing on Switch in addition to PC.
The Financial Lifecycle of an Indie Game
Financial Phases
| Phase | Duration | Revenue Stream | Expense Stream |
|---|---|---|---|
| Pre-production | 3-6 months | €0 (or Kickstarter/Patreon if you have an audience) | Low (your time + some tools) |
| Production | 1-3 years | €0 (or YouTube devlog/Patreon for a "salary" during development) | Moderate (freelancers, assets, licenses, music). Typical indie solo budget: €10,000-€50,000. Small team: €50,000-€300,000. |
| Launch | 1-4 weeks | Massive peak (50-80% of first-month sales can represent 20-40% of lifetime sales). | Marketing (trailers, press kits, influencers). Budget: €2,000-€20,000. |
| Post-launch | 3-12 months | Declining but regular revenue. Peaks during Steam sales (4× per year). DLC and updates boost sales. | Patches, DLC, community support. |
| Long tail | 2-10+ years | Low but continuous passive income. Good games continue to sell for years (Steam sales, bundles, organic discovery). Typical revenue: $500-$5,000 USD/month. | Minimal (maintenance, compatibility with new OS/hardware versions). |
Cash Flow Management for an Indie Dev in Paraguay
The revenue profile of an indie developer is radically irregular: 2-3 years of low income (development), then a massive peak (launch), then a gradual decline (long tail). Cash flow management is crucial:
- During development (low income): Live on your savings or supplementary income (Patreon devlog, YouTube, freelance consulting via US LLC — all at 0% in PY). The low cost of living in Paraguay ($1,500-$2,500 USD/month) is a massive advantage during this phase — an indie developer in Paris spends €3,000-€5,000/month just to survive.
- At launch (revenue peak): Don't spend everything. Put 50-70% of launch revenue into savings/investments (Interactive Brokers). Launch revenue must fund: 2-3 years of development for the next game + your living expenses + taxes (0% in PY, but budget for US LLC accounting and compliance).
- Long tail (passive income): Long tail income ($500-$5,000/month) covers a portion of your living expenses in Paraguay. The rest comes from your investments (ETF dividends, PY real estate rentals).
The 10-year wealth trajectory (2 games)
| Year | Activity | Net Revenue (after commissions) | Invested Savings | Cumulative Wealth (7%/year) |
|---|---|---|---|---|
| 1-2 | Game 1 development + YouTube/Patreon devlog | ~$30,000/year (devlog) | $10,000/year | ~$22,000 |
| 3 | Game 1 launch (moderate success: 50,000 copies) | ~$500,000 (peak) | $350,000 | ~$400,000 |
| 4-5 | Game 1 long tail + DLC + Game 2 development | ~$50,000/year (long tail + DLC) | $25,000/year | ~$530,000 |
| 6 | Game 2 launch (hit: 200,000 copies) | ~$1,500,000 (peak) | $1,000,000 | ~$1,650,000 |
| 7-10 | Games 1+2 long tail + DLC + possibly Game 3 | ~$80,000/year (combined long tail) | $40,000/year | ~$2,300,000 |
In 10 years, with 2 successful games, an indie developer in Paraguay builds up an asset base of ~$2.3 million. Passive income at 4%: ~$92,000/year — enough to live comfortably in Paraguay for life, WITHOUT ever developing another game. The same developer in France would have an asset base of ~$800,000 (after 55-60% taxes). Paraguay generates ~$1.5 million in additional wealth.
Selling a game or a studio
Selling your franchise
If your game is a success, the franchise (the IP, name, characters, potential sequels) is a saleable asset:
- Potential buyers: larger studios (who want to acquire the franchise to develop sequels), publishers (who want the publishing rights), or investors (who see future monetization potential).
- Valuation: 2-5x net annual revenue for an active franchise. A game generating €200,000/year in long tail can sell for €400,000-€1,000,000. A recent hit with sequel potential: 3-10x revenue.
- Sale structure: If the IP is owned by your US LLC, you sell the LLC (or transfer the LLC's assets — IP, developer accounts, source code). Capital gains are from a foreign source (sale of assets of a US LLC) = 0% in Paraguay. In France: 30% flat tax or progressive scale on capital gains. For a franchise sold for €1 million: ~$300,000 in savings by making the sale from Paraguay.
Selling your studio
If you have built a studio (team, game catalog, development pipeline), the studio itself is saleable:
- Buyers: groups like Embracer Group, Tencent, Sony, Microsoft, or investment funds specializing in gaming (Makers Fund, BITKRAFT, Galaxy Interactive).
- Valuation: acquisitions of indie studios are done at multiples of 3-10x annual revenue (more if the studio has strong franchises or a promising pipeline). Recent acquisitions in the industry have reached multiples of 5-15x for the most sought-after studios.
- Taxation: the sale of the studio (sale of the US LLC or its assets) from Paraguay = 0% capital gains (foreign source). This is potentially millions of euros in savings — one of the most impactful transactions of your life, made optimal by Paraguayan residency.
The French video game tax credit (CIJV): what you lose by leaving
CIJV in brief
France offers a Video Game Tax Credit (CIJV) to French video game studios:
- Rate: 30% of eligible expenses (salaries, subcontracting, depreciation).
- Ceiling: €6 million per game.
- Conditions: the game must be eligible (cultural criteria, no excessive violent content, no advertising). The studio must be a French company (SAS, SARL). The game must be approved by the CNC.
- The advantage: for a French studio with €500,000 in eligible expenses, the CIJV reduces tax by €150,000. This is significant — and it's the main argument for studios that remain in France.
CIJV vs. Paraguayan territoriality: the calculation
| Scenario | France (with CIJV) | Paraguay (territoriality) |
|---|---|---|
| Development expenses | €200,000 | €200,000 |
| CIJV (30% of expenses) | -€60,000 (tax credit) | €0 (no CIJV in PY) |
| Game revenue | €1,000,000 | €1,000,000 |
| Profit | €800,000 | €800,000 |
| Tax (25% corporate tax after CIJV in France, 0% in PY) | ~€185,000 (corporate tax on profit - CIJV) + social contributions if director remuneration | €0 |
| Net tax cost | ~€125,000+ (after CIJV) | €0 |
Even with the CIJV (the most generous scheme in France for video games), the tax cost in France remains ~€125,000+ for a game with €1 million in revenue — vs. €0 in Paraguay. The CIJV reduces the bill but does not eliminate it. Paraguayan territoriality eliminates it. The choice is arithmetic.
The CIJV makes sense for studios that want to stay in France (proximity to Ubisoft/Activision, Parisian game dev ecosystem, personal attachment). For a solo indie developer or a small team without geographical ties, Paraguay is objectively superior — even with the loss of the CIJV.
Specific mistakes made by indie developers
Mistake 1: Launching the game before expatriating
If you launch your game while still a French tax resident, the launch revenues (often the most significant peak) are taxable in France at 45-60%. Even if you expatriate to Paraguay 3 months after launch, the launch revenues are acquired during your French residency = taxed in France.
Solution: move to Paraguay BEFORE the game launch. Ideally 3-6 months before (time to obtain the cédula, RUC, DNIT certificate, and document your residency). Launch the game as a Paraguayan resident → launch revenues are from a foreign source → 0%.
Mistake 2: Using a personal developer account (not US LLC)
If your Steam/Epic account is in your personal name (not your US LLC), payments are made to YOU (PY resident individual) from Valve/Epic (USA). Two problems: 30% withholding tax on US income (W-8BEN instead of W-9) and the inability to separate your personal finances from your business finances.
Solution: create your US LLC BEFORE opening developer accounts. Open Steam/Epic/Nintendo accounts in the name of the US LLC. All payments go through the LLC → Mercury Bank → 0% withholding + 0% PY tax.
Mistake 3: Not protecting IP
Many indie developers do not protect their intellectual property (no trademark registration, no IP assignment agreement to the US LLC, no clear contracts with freelancers for the transfer of rights to assets).
Solution: assign the game's IP to your US LLC (IP Assignment Agreement). Register the game name as a trademark (USPTO ~$250). Ensure that contracts with your freelancers include a transfer of rights (work-for-hire or explicit assignment of rights). IP is your most valuable asset — protect it.
Mistake 4: Ignoring the long tail
Many indie developers focus on launch and neglect the long tail. However, a well-maintained game (regular patches, DLC, participation in Steam sales) can generate revenue for 5-10+ years. The long tail is quasi-passive income — and in Paraguay, it's quasi-passive income at 0%.
Solution: after launch, maintain your game (patches, DLC, updates). Participate in all Steam sales. Respond to the community. Every dollar from the long tail is a dollar at 0% — don't waste it.
Conclusion
Independent video game development is one of the most fiscally impactful activities for an expatriate in Paraguay. Revenues are potentially massive ($100,000 to $10+ million for a success), distribution is 100% digital and international (Steam, Epic, Nintendo — all foreign entities), and Paraguayan territoriality applies 100% (foreign source = 0%). An indie developer who sells 100,000 copies of their game for €15 saves ~€552,000 in taxes in Paraguay compared to France — more than half a million euros on a single game.
The structuring is identical to other digital activities: US LLC (Steam/Epic/Nintendo developer accounts in the name of the LLC, W-9, Mercury Bank) + Paraguayan residency (cédula, RUC, DNIT certificate) + DNIT accounting (€30/month). VAT is handled by the stores (not by you). US withholding tax is eliminated by the US LLC. IP is protected by international copyright law.
Paraguay also offers a structural advantage for indie developers: a low cost of living ($1,500-$2,500/month) that allows them to survive during the 2-3 years of development without significant income. In France, an indie developer must earn €3,000-€5,000/month just to cover living expenses — which forces many independents to develop in parallel with a salaried job (reducing the time dedicated to the game and prolonging development). In Paraguay, an indie developer can live full-time on $1,500-$2,000/month from savings or Patreon income — and dedicate 100% of their time to development.
The result: faster developed games, better prepared launches, higher revenues — and 0% tax on everything. This is the winning combo for the indie developer in Paraguay.
Are you developing an indie game and want to keep your revenue? Contact our team: Paraguayan residency (from €1,400), US LLC with Steam/Epic/Nintendo developer accounts, bank account, DNIT accounting (€30/month). Code from Asunción. Publish worldwide. Keep 70% after store commissions and 100% after taxes. Game on.