How to Open a Video Game Development Business

How to open a video game development business

Humanity has always needed entertainment. With the advent of the digital age, computer games have become especially popular because they can become a real immersion in a new world. Sociologists are sounding the alarm that computer addiction deprives a person of his personal life, but the development and publication of computer games are growing at a fast pace. However, there is an alternative opinion that considers such games to be a new direction in art, which had no analogs before.

If we ignore the problems of the modern world, but we can see that large developers of computer games have multimillion-dollar annual revenues, which sometimes exceed the income from creating high-budget films. This business was generated by the development of technology only at the end of the twentieth century, and therefore today has many prospects. But a novice developer will have to really make his way to the stars through thorns for a really long time.

The development of a video game involves two companies – a developer and a publisher. Developer – the company that directly creates the game, tests it, brings it to mind, in general, is fully focused on the technical component.

The publisher, however, is engaged in the promotion of the game, its sale, demonstration, and it is he who determines what should be in the game and what should not. The creators of the games are directly comparable to people in creative professions, their impulse is aimed at creating something ambitious, grandiose, and surpassing everything hitherto seen. A publisher is a calculating realist who pays for the development and wants not only to return his money but also to earn money on sales, so it is not profitable for him to sell a raw product that will not be bought. This is the main confrontation between the publisher and the developer because the former is simply forced to limit the ambitions of the latter and direct his activities in the direction that will bring money while reminding the developer of the timing. Therefore, many developers become their own publishers, trying on their own to convey their brainchild to the players. History knows a lot of successful people who independently achieved their goal without the help of third-party companies, but there are hundreds of teams for such a genius, which, in the end, no one will know.

The entire video game industry is conventionally divided into 2 components: large companies and indie developers. Large companies publish “AAA-class” games that are aimed at a wide audience and meet the needs of a very large number of people (a kind of pop-production, although geniuses are also among such projects); individualists develop an inexpensive game and sell it themselves. As a rule, this is a few people, or even the only one programmer who registers as an entrepreneur immediately before the sale of the game. There are a lot of high-tech games, but they require significant funds, so indie developers survive by implementing a brilliant idea. The game can be technically very simple, but at the same time be a masterpiece thanks to an unusual and interesting idea. But still the best option for everyone,

Many talented programmers begin the difficult path of a game developer. But this is also a business, and without commercial consciousness it is hardly possible to win a place among competitors. Of course, you can become the next individualist, devoting yourself to developing a brilliant project, in order to ultimately release it and earn money on it or, which is also good, earn the recognition of a large video game studio and join it as an employee.

However, if we consider the development of games as a business, then we need to pay attention to the publishing component. In general, the division into companies of a developer and a publisher is due to the total difference in business processes, despite the fact that both are engaged in a common task. A developer does not have to be a commercial organization at all (as, for example, a writer is not required to register as an entrepreneur), but a publisher is a taxpayer who takes over all the organizational work. However, it is quite possible to remain one company that is engaged in the development of the game, just everyone is doing his own thing, and managers sell, not sit at computers.

So, to start your similar activity, you need to register as a business entity, indicating the code (OKPD 2) 58.21 Services for the publication of computer games. If the entrepreneur himself is eager to create games, he can join the workflow not only as a leader but also as a leading programmer. If computer technology is not his professional activity, then you can either find a ready-made team of developers and offer them cooperation or look for specialists one by one. As noted above, the state may consist of one person and may include more than a hundred people in different positions. The following people are directly involved in the development:

Programmer.

A person who writes code creates an engine and does another programming. The staff of programmers can include many posts for writing individual game parameters.

Game designer.

His work is not designed in the usual sense of the word, but rather directing, he finds the perfect balance of all the components of the game.

Artist.

Creates the appearance of all characters and the game as a whole. Separately, a specialist in textures and 3D models is distinguished.

The animator.

He is engaged in the development of the movement of characters and should be able to create animations for non-existent creatures. He also works in a motion capture studio, if any.

Musician.

Designed to create not only original compositions for filling, but also to pick up all kinds of environmental sounds and, in general, the entire “sounding” part of the game.

Screenwriter.

He writes not just a script, but one that can be interactive and multivariate. He works closely with the designer, constantly discussing with him the processing and changing the script as necessary.

Tester.

In the early stages of the project, they become employees themselves. At later ones, a beta test of the game is thrown, which may be free for the company, because fans start testing the game, if, of course, there are people who showed interest in the project at the stage of its development. But in the state itself, there must be special people who constantly check the quality of all elements.

The publishing department includes people who are already engaged in business familiar to the business: producer, sales manager, marketer, legal consultant, company representative. The number of employees is highly dependent on the initial idea. To do this, you need to study the market in order to find unoccupied niches that can become unused genres, game mechanics, or even something new, which has no analogues. The fact is that in this type of activity you have to compete with players from all over the world, and you probably will not be able to compete with large companies – they have experience, recognition and money.

As for the Russian market itself, there is no serious competition here; most of the developers of this country have long been re-qualified as localizers (companies that adapt foreign games to Russia, this often involves only translation) or manufacturers of frankly unsuccessful, cheap to manufacture and designed for stupid game consumer. Today, success in game development can be ensured only by an idea ingenious in idea and execution, or just a very high-quality project. Therefore, the less creative potential there is in employees, the more staff there must be in order to get at least an honed and interesting game at the output. Of course, it’s possible to create a clone of an already known game under a different name, it’s quite possible that it will be possible to earn money, but this will not cause public interest, and there may not be enough money for subsequent development. Therefore, the concept of the game should be initially thought out based on the needs of the market, so as not to change everything on the go – this will only delay the already long, and therefore costly, process of creating a game.

The simplest games are created in 2-3 months, complex projects take a couple of years, although the gaming industry also knew the so-called long-term construction, which had been developed for almost ten years. Only a very rare company can survive so much time without sales, and even then only if it is constantly invested. Excessive delays in the process also affect quality, because technology is moving forward every day, and what was an innovation today is already exhausted material tomorrow. However, recently games, although they have not reached the peak of their development, still slowed it down, because modern technology meets the aesthetic preferences of most customers, and for them in the first place is not a beautiful wrapper in the form of ultra-graphics, but high-quality content – the so-called “gameplay”. From this we can conclude that it’s not worth delaying one project for more than a year, during this time potential players can turn their attention to competitor’s projects. Only hits or sequels of the already acclaimed series will be waiting.

Thus, the team needed to create a game for the entire period is calculated and a budget is allocated. Directly on the game itself, you can spend 20 thousand rubles and 20 million, and both projects can be viable. The main expenses are borne by office rent, payment to employees, utility bills (the most serious expenses are high-speed Internet and electricity), third-party content ordering. Today, a rare developer creates everything himself, even game engines are bought, not to mention typical textures, sounds and other content.

The development of the practice of game outsourcing, when the production of some game elements is transferred to third-party companies, is developing. For example, it’s completely disadvantageous to keep your voice actors. Motion capture studio assumes the presence of sophisticated equipment and serious computing power, so special companies are involved in this. Sometimes, in general, a developer is engaged only in basic programming, outsourcing everything else. This is advisable, as it saves the most important resource – time.

Now imagine a small company that employs 15 people, 10 of them are developers, the rest are engaged in publishing. The average salary is 20 thousand rubles. The project is designed for a year. An office of about 50 m2 is leased on the outskirts of the city for 20 thousand rubles per month. Monthly utility bills – 20 thousand rubles, taking into account outsourcing of business processes and security. A constant advertising campaign, meetings and presentations cost another 20 thousand rubles every month. The game should not be too complicated, and such a long period is due to the independent development of all content. The budget for the year of even such a not too serious project will be 4 million 320 thousand rubles.

The main expense item is employees, and you can find enthusiasts willing to deny themselves a normal life for their beloved business, in order to receive recognition and money in a year (that is, the salary will be less, but a large percentage of sales will be provided). But finding them is hard. Many fans of computer games are ready to devote themselves to this sphere, creating their dream game with their own hands, but they can work for a whole year for free only in their free time from their main work. But you need to remember that you can’t do much on bare enthusiasm, employees must have knowledge and experience.

Such activities are fraught with serious risks. An ingenious project can gain recognition and even make a revolution in the gaming industry, but at the same time insolently do not pay off, not to mention profit. Therefore, many publishers work according to a scheme that minimizes these risks; the most common example is taking a franchise on a movie or book. But good transfers of films or artworks to monitor screens can be counted on the fingers, but the profit, as a rule, from games under licenses is significant – people buy a well-known name, wanting to extend the pleasure of the source. But you need to buy a license, which involves significant investments, and then based on it also develop the game. They often save on the second point.

Piracy is becoming a serious problem; today, perhaps, there is not a single hacked game that could not be freely distributed on the Internet by pirates. Previously, pirates resold the hacked game on their disks, and the buyer could still opt for a legal copy by overpaying, but today the game can be obtained for free without going to the store without spending money. Publishers are trying to fight this by not providing support for players who use a hacked game or conducting ongoing checks over the Internet and blocking pirated copies. Publishers of online games feel best in this situation, because pirates cannot afford to create a full-fledged analogue of the official game server. Also, the owner of an online game not only receives money for a one-time purchase of his product, but also for a monthly subscription. Console games and games for non-Windows family operating systems are not often hacked. If you develop a single-player game for ordinary personal computers, then in the end you will not be able to get half of your potential revenue. However, not everyone who downloaded the hacked game would buy it in the absence of alternatives.

However, there are positive aspects. Today, less and less people buy games through specialized stores, the DVD format is generally slowly dying. Games are bought through virtual stores, for consoles they are generally specially designed and operate with maximum support from manufacturers. Developing a game for all platforms will be a more costly undertaking, but will result in significantly more money. If the project is recognized as promising, then console manufacturers may want to make it exclusive for their platform, but such proposals are not received by Russian developers due to the low quality of their products. But everything can be changed if there is a desire and strength.

If we consider the above-mentioned project, in order to cover the costs of its development, you will have to sell more than 12 thousand copies of the game (taking into account that the average price of one licensed copy is 350 rubles). Having sold 20 thousand copies, you can already earn 7 million rubles, or 2 million 680 thousand rubles of operating profit. At the same time, a successful game will be bought for many years, but the lion’s share of the income will be received the first time after the release.

This business is characterized by the fact that if in the first few months it is not possible to recoup the project, then it is unlikely that it will ever pay off. The game-leader in sales in the gaming industry was able to recoup the funds spent on its development almost three times in the first 24 hours after the release. In general, such a business has prospects, but they will only open to geniuses or people who know how to offer quality products.

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