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As a start up you could be successful without being in the lucky 7% because they are talking about games generating profit on sales. A smart start up would make their money on the development cost and not expect to make any money on royalties. However, even on small projects, it is taking around six months to negotiate a contract and that time doesn’t even start until your demo is done, has been pitched and the publisher has decided they want it. Best part of 12 months to get an original game signed.

Best start up strategy is to do outsourcing for other larger developers. That money can tied you over while going through the original IP pitching process.