I worked through the revenue models in excel and can give some generalisations, my figures are geared towards PC development - console sales are often much higher but you get less revenue per unit sold. These figures are also geared towards the american/european market space - Japan works differently.

A smash hit can sell ranges between 200,000 and 1,000,000 copies, but these are rare and unless you are Blizzard or ID then forget it. A succesful title will sell around 100,000 copies. The vast majority of games sell less - say 40,000

As a developer, you get a slice of revenue - the size of which just depends. If you are an established hit maker you get more. An unkown startup gets less. The other thing that counts is any advances. If you finance the whole project yourself you can get better percentages. The revenue slice varies from 15% - 50%

You can (and should) negotiate variable royalties - ie the percentage goes up as volume hits certain milestones, say 150,000, 300,000, 450,000 - you can get a couple of extra percentage points each time.

Royalties come from the wholesale price of the game minus physical costs, so a $50 retail game will sell wholesale for $30-$35. Physcial production costs should be a couple of dollars.

For example, you have a title that shifts 100,000 units, have 20% royalties and the revenue is 30$ per unit. You''ll get $6 per unit or $600,000. The publisher recoups any advances paid from royalties, so if they advanced you $750,000 you will get zip.

You also need to figure console conversions in, which will typically outsell PC titles, but have lower royalties (no hard figures here).

There are other opportunities here, companies like id & monolith supplement or focus on engine development which they license to other developers. Engines can cost anywhere between $0 and $500,000 to license.

A member of staff costs twice as much as their salary, when you think about taxes, benefits etc. This varies from country to country.

You''ll probably spend $15-$20k on software and hardware for each staff member, and also need to think about employing admin & support staff unless you want your developers configuring firewalls and managing email servers.

Publishers typically manage the advertising spend, no hard figures but think $100k+ to advertise.

You may want to check at the Gathering of Developers for some good information.

Everything here is the product of guess work, the q&a section on godgames is well worth diving into.