Blender, UE, and photoshop?  Any mainstream CPU and GPU will do.

Focus on the best pair of monitors and the best keyboard you can afford.  The rest of the hardware is going to spend 99.9999% of its time waiting as you stare at the screen, so make sure your screens are top quality.  A good keyboard with a feel you like is next in importance, because that's your primary tactile interaction with the computer and you're going to associate that sensation with doing development.

Seriously, today's average compute power is more than enough (and if you're smart you'll offload most processing to a cloud anyway).  Focus on the HMI side because your challenge in game development is not going to be waiting for a build, it's going to be finding motivation to finish the game.  Everything you can do to help the latter, even at the expense of the former, is a win.

In my experience UE4 is definitely the biggest performance hog. You definitely want it on an SSD (and the projects as well). I'm running a quad core 3.8GHz with 8GB of RAM and a GTX 750 Ti (which is now considered "old" by most). UE4 runs acceptably on that as long as the project is on the SSD, everything else (PS, Blender, Unity, VS) cooks along pretty nicely.

You should be able to put together a better machine than mine for under $500 US, assuming you already have monitor/keyboard/desk/etc.

1 hour ago, newtechnology said:

How do you do that? I know what cloud is and everyone keeps talking about it, but I still haven't really got a perfect idea of what cloud can be used for.

Unless you're working on a "BIG" project, compiling code in the cloud isn't required assuming you're not running a toaster for a machine. This can and will save you time for sure, but the requirement has to be there to make it worth investing the money for the servers. You can pretty much set up as many servers as you need, and sleep them until you need to compile code, ect... If you're working with many different moving parts, different departments can send their code to the cloud to compile and render your build files for you without touching your local computer resources, less your internet bandwidth. Your only issue in dealing with Cloud Computing is connection speeds for your Upload and Download.

My personal "opinion" is that we're in a fad phase with the "cloud". Indie developers don't need to worry about this. I would sooner put the money into an PC upgrade than server costs.

To answer the OP question about a rig, to be honest you should fully load up on the best CPU you can afford, and Ram. Your graphics card will depend on if you're making 2D or 3D games, and what tools you're using. I'm working off a rig with 32gb of Ram, and 4+Ghz i7 CPU, with a so so GeForce but I haven't hit a bottleneck yet and use a lot of video, and photo editing, and modeling software. I believe I spend around $2200 for the custom rig (I was able to port some stuff over thankfully), but coming from experience you really cannot skimp out on specs. Your other option is to build as you go, but you need to be careful about what motherboard you pick so you can upgrade the ram in future, and cpu. You'll want a very new motherboard that supports the latest cpu chipsets for intel or amd, and ram.

You'll benefit by waiting it out and saving some more money before building the custom rig. Keep in mind, technology is already dated before it hits the shelves, so figure out what requirements you would need for a few years in future, and build based on that.

22 hours ago, newtechnology said:

How do you do that? I know what cloud is and everyone keeps talking about it, but I still haven't really got a perfect idea of what cloud can be used for.

Well, here's a common setup.

(1) You have an off-site DVCS host (for example GitHub) to which you push you code from time to time.  This gives you an off-site code backup, make the code available to team members if you're cooperating with others, and gives you a public portfolio if you're looking for paid work.  This is also known as 'keeping a copy in the cloud'.

(2) A commit hook on your source server causes a build to get kicked off on a build server somewhere (for example, Travis-CI).  The build server checks out a pristine copy of your source and builds it in a clean environment.  This ensures that your code builds from source in a clean environment, which is important if you lose your personal dev environment (which you will, at some point) and is also important if you;re working with a team or shipping software  The end result should be an installable package with your software that you or your testers can install and verify.. This is also known as 'building in the cloud'.

This is a process known as "continuous integration" and is a good habit to help maintain proper development hygiene.  You get off-site backups, you get proof your code compiles, you get simplified distribution of you software, and you can actually get it all for free if you don't mind your work being open.  You also offload a lot of processing because you can just do incremental builds locally for development testing.  Of course, you need to follow good habits for it to work, and if you want to keep everything obscured for an illusion of security you'll need to either pay for the cloud services or set it up yourself either on your own local servers or on rented metal somewhere.