Investing in game development

Discussion in 'Indie Business' started by Andreb, May 16, 2017.

  1. Andreb

    Andreb New Member

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    Hi folks.

    Full disclosure: I posted this same question over at Reddit, but got zero replies unfortunately. :-\

    Anyway, I've been reading about the story of the Nine Dots Studio and it got me thinking. Basically they're a game development studio that started making games with a different philosophy, summarized as: 1) Respect for developers' time (they do not force crunch time on employees, people rarely work more than their 8 hours/day); 2) Little to none in monthly salary to anyone but everyone shares the profits when the game comes out. They have launched some games, and though none seems especially stellar, they're an operational company. What really caught my atention is that the head of the company is neither an artist nor a developer, he's more of a marketing type of guy.

    So anyway. I have no idea how crowded the game development market is or how much it costs to make a game. I'm sure it depends, but even for indie games it's hard for me to estimate. But games really are my passion even though I work a very boring kind of job (basically with financial valuation of assets, including intangibles). So I'm here to ask: how plausibe would it be to invest in a small studio for developers to work at, sharing all profits of the finished products?

    For those experienced in the business, how much of an investment would be needed for a starting studio? 100,000? 200,000? Assuming one would be willing to take the financial risk for such a development, do you think developers and artists would be interested in such a model? Basically what I'm considering here is, since I'd only be contributing with taking the financial risk of investing and being enthusiastic about it, how much of this plan is just a silly dream and how much magic can money actually buy in this industry?

    Thanks in advance!

    PS: I have no idea if this helps at all, but I'm really passionate about creating systems and rulesets. I've been a Dungeon Master for years when I was a kid, and from there I just kept twisting the rules until for each game I had a whole new set of mechanics (and had distanced myself so much from AD&D that I could indeed call the system mine). I also love storytelling and have spent a lot of time creating characters, worldbuilding and making stories. I also like to make monsters and races from scratch, trying to avoid clich├ęs like orcs and goblins (I think it is a real triumph that games like Mario or Zelda have their own unique fauna and flora and I think that's what really makes those worlds so pleasng to the imagination). I am a fan of Arthur Machen's style and love incorporating weird fiction in what I do, trying to avoid the obvious. I have no idea how this would help the studio, or if I'd just get in the way of the creative team, to be honest. Anyway, just trying to find how I could ever be of help besides being the investor. I think I have developed a pretty good intuitive "feel" for systems that work and feel fluid (in contrast with others that feel confusing and unfair). That's it.
     
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  2. Archduke

    Archduke New Member

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    Software has very little overhead. The tools are generally cheap or free, and there's plenty of open source resources out there. The thing that you would be spending money on is the people.

    Figuring out the cost of hiring people is straightforward (based on cost of living in your area). However, the model that you mentioned seems confused. It tries to alleviate developer stress by not having crunch time, but adds tons of developer stress by making them dependent on sales (Which you can never bet on. Games are a terrible investment because of how inconsistent they are.) I would either form a team of people that already have steady jobs and can work in their free time, or pay them a livable wage.

    If I was in your position, I would do this: Figure out how large of a game you want to make, figure out how much time and how many people you'll need, then do the salary math to figure out the cost of making the game. If you still want to go through with it, then go ahead. Otherwise, look into learning some game development skills yourself and get a more indie project going. The low salary/large share model just seems ripe for burning your team if the game flops (Or even if it's a critical success that doesn't sell a ton.)
     
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  3. Andreb

    Andreb New Member

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    That was a great answer, Archduke. Thanks. What you say makes a lot of sense. I guess if I'm able to invest, the surest way would be to use the money to pay the wages of the team. I thought of another idea, kind of a hybrid: wages + shares once I have my payback, since I believe in rewarding performance. That way, I guess people wouldn't feel stressed by the uncertainty, but would still feel motivated (I hope) to work hard for a successful game. Maybe that would be better? Thank you so much for your input!
     
  4. ctalystnetwork

    ctalystnetwork New Member

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    Hey!

    Game development studios are hard work! An initial startup investment of 100 000 - 200 000 would be ideal and allow you to hire a small team and get the ball rolling. However, this will barely get you enough funding for a year.

    Your monetization strategy will have to be huge. Building an awesome game is one thing, but building a sustainable game that brings in money is an entirely different beast.

    Also the market is filled with game developers all trying to capitalize on the huge video game market, but many fail to realize how difficult it is to market and get downloads. You need to really focus on the business side of things and have a solid game plan in play before you go down this route. Many studios have created great games but run out of steam to market and get the downloads needed to sustain them.


    We're hosting a webinar to help out studios and game developers alike. It's on July 26, 11AM PSD. It helps to address monetization and download techniques. Check it out on ctalyst.com/webinar if you're interested!
     
  5. kevintrepanier

    Original Member Indie Author

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    As others have pointed, salaries is the biggest thing. A lot of indies (like myself) work from home so it cuts down on office space expanses.

    I'd say you can buy a lot of "magic" in this industry if you got the money! Money and time is what devs lack most of the time. Required budget for developing games is all over the place. I made simple casual games for clients for $500 to $2000 and developed another title that sold for $15000 and for me it was considered a financial success. Of course if you want to make World of Warcraft you're going to need millions of dollars for a team of hundreds of people.

    What kind of games would you like to invest in? My greatest joy in life would be to have financial backing to develop games and not worry about it.
     
  6. jellymeyer

    jellymeyer New Member

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    no matter what your doing you have to crawl before you can run, this Is true of business and of game development. Trying to make the next AAA title for your first thing really is a pipe dream but a single developer can easily make a little game that's fun to play for their first title, sell it to a few people who are interested and use the revenue to make a slightly more in depth game and maybe hire a first developer. Not a sexy answer but its sustainable and can be done while working a boring job
     
  7. carlmartin

    carlmartin New Member

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    If you put in lots of time in your program and reach a roadblock, don't give up, come up with a way to conquer the barrier. When Android Wear was declared I began making watch faces. I ran into a whole lot of challenges and random bugs which took days to conquer, but I gave up and now I am glad I did not, I heard a lot and it's an excellent feeling to finish a project successfully.
     
  8. Syntaxx

    Syntaxx New Member

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    My answer to this would be possibly seen as slightly off the topic, or avoiding the main point of addressing the pitfalls of a development startup but nonetheless, anyone who manages such a thing would be open to the huge problems of any other development company, that of selling the goods in a chaotic and ill thought out environment of 'app stores'. Good luck to anyone looking at starting up in development, but for me the person(s) involved in finally evolving the app store into a focussed and succesfully maintained store should be made a saint. Too many stores full of 90% garbage and an audience who, by and large expect everything delivered to them for free has ruined the gaming market in my opinion.
    It's a barren desert dotted with the very rare oasis here and there.
    Sorry for the mini-rant and to stray off a little, but I do see these points as important for anyone looking to get involved in any element of games dev. Personally, my dream is of a well curated store with an emphasis on quality, a minimum standard all submitted apps should reach, and run by people who love gaming. Like yourself!
    How hard can it be ?

    Very hard,looking at all of the stores and their willingness to join in the race to the bottom :(
     

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