To learn more or opt-out, read our Cookie Policy. It can be observed in companies of all sizes, from THQ going under to 38 Studios defaulting on millions of debts to the recent Yogsventure project fiasco. I've seen the people behind these projects judged very harshly in comments from readers I know, I know, I shouldn't read the comments and usually, it seems to me that people grossly underestimate what it costs to run a game studio.
For about as long as I can remember, I've been planning on starting my own game studio. It's an ambition I nurtured throughout my youth. Game developers were my heroes and Squaresoft, Bioware and Blizzard were the embodiment of everything I wanted to create. Being naturally drawn toward game design, I oriented my education toward that field and at 20 years old I had scores my first gig in the video game industry as a tester for Activision. Meanwhile, I'd keep reading about the state of the game industry, a subject matter that has been as intriguing to me as the game themselves.
I'd read and frequently discuss about the working conditions issues, about the realities of the market, about the success and failures of different companies, etc. I was getting pretty comfortable, had a very nice team, my bosses were happy with my work and I was climbing up the ladder rapidly, although I was still in the field of QA rather than design.
I was working on a side project with a few colleagues, until Activision said we had to stop due to our non-concurrence agreement. So for my 24th birthday, I went to my boss office and resigned in order to start my own business and do things my way. That was over three years ago.
I hope that by using my own company as an example, more people will come to understand the realities of this industry and help them better appreciate the complexity of managing a budget. Many factors change from one company to another depending on its geographic location, business model, level of ambitions, and so on. But this is a good place to start. That's a very basic overview of the costs to start and run a studio. Obviously, there are ways to reduce these costs.
Maybe you already have some computers and some software available to you, or you use open-source solutions. Many studios start with everyone working from their home, which saves a lot of cash on rent, insurances, hardware, etc. To be honest I would recommend for most studios to have the whole team work in the same physical space as much as possible, even if it means using someone's home as headquarters. When we started, we were five guys working in an 86 square-foot office at my apartment.
It was cramped, but in the end we benefitted from improved communication, productivity and motivation. It helped to build a stronger studio culture. I already had access to three PCs and two other members of the team came with their own hardware when they joined in.
So it didn't cost me as much to set up our workspace as it could have. It was a risky move that paid off, mostly due to being at the right place at the right time. I still don't know if I'll be out of a job before the end of year For the first three years everyone on my team who worked full time did so with equipment purchased on their own expense. Meanwhile, the company itself ran on three things: my savings, the crowdfunding money and a bank loan.
The totality of revenue we made from the sales of the first game, Brand , was redistributed among the members of the team who worked on it. It wasn't much. After the first year, we expanded the team and needed a new office, so we moved the business out of my apartment and used that opportunity to gear up in a more appropriate manner.
I got a 3-year loan to pay for the new equipment we needed, which allowed me to make sure I still had some cash on hand. After two unsuccessful Kickstarter campaigns, I was on the verge of bankruptcy before signing a deal with Bandai Namco. After three years of work with no income, we finally could pay ourselves a salary. Just to clarify: our deal with a publisher didn't make us millionaires.
In fact, only the sales of our upcoming game, GoD Factory: Wingmen , will determine if we'll even be sustainable at this pace. Today my team makes a salary. As you see, starting and running an own mobile app development company can be very time consuming and expensive. Some gaming experts agreed in the discussion that the perfect scenario for running a software development company would be to keep a small core team in-house to deal with creative part, app specs and briefs, manage feedback and oversee the process, while outsourcing development and promotion assets.
Setting up a remote Agile team in a lower-cost location can be a very effective measure to address strategic long-term requirements of your games studio. When you choose a Salary Plus Management Fee pricing, you get a fully transparent IT staffing venture and a fully predictable app development budget. The money you save can go to your game promotion budgets or you can easily add more specialists to your in-house or dedicated development teams to boost the effort.
Global game dev giants such as Playtech and Bigfish already have fully operational game development setups in Ukraine counting more than people each. It looks like proper use of offshore IT staffing plays a pivotal role in their overall success, doesn't it? Custom Software Leverage our software development expertise to build custom applications, modernize legacy systems, and build powerful API integrations.
Learn More. IT Strategy. Check out a related article:. During drawing the game company business plan, ensure you have a clear and solid description of the game company to give people an insight of what your game company is about, what makes you stand tall, and differentiates amidst your competitors and the various markets you intended to gain a firm foothold in.
All these are very crucial and you need to take cognizance of them if you are to start a game company. Another guide for you before you start a game company is, you need to know who are your present and likely future competitors and target your market. You can only know all these through market surveys. Ask around and get feedback. Find a prototype of games that are similar to what your company will be dealing with, and learn where and how much those games sell.
Before you register your game company with the state, it is very paramount you decide on the business structure you will be building. Is it LLC, corporation, or partnership? But if you are going to take a loan for the game company in the early stages, consider registering your game company as an LLC to prevent personal liability for debts.
Registration of the game company under the government is a must, do handle it diligently.
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