Home Forums Business and Legal Primary concerns for companies in the early stages

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    • #3649
      Jamie Mc

      Hi guys,

      I’m trying to do a little bit of research and was wondering if you can help. Now please only people who have been involved, or are looking seriously into setting up a company to make games or related products. (except Tony, I’ll chat in the pub to you a bit further when next we meet.)

      What are the primary problems and concerns when you’re starting up? Think from the start, after you’ve got a team together and have battled out what you want to do, where are you having problems. Is it making a proper business plan, gaining proper finance for the venture, or approaching investors? What kind of information are you looking for, where can you get it, or are you finding it tough to even get the basic information to start?

      If you could let me know either from experience, or concerns you have if you’re starting up now, it would be appreciated.



    • #16548

      Jamie, I’d prefer to chat in the pub about this ;)

      However I am of little use – it will be aaages before I set up a company ;)

    • #16550

      Think from the start:

      First issue is staff, a good team is hard to get. Get the right balance from the start. And dont have an ego about things. Trust in other peoples views.

      I am on my second design Studio. The first failed because I had to much faith in people, and picked the wrong employees. The second is going well because I have total control and everything is done via outsourcing. Reduces my costs and gives me 100% control. I specify what I want and when, then its done.

      Mod teams are an endless resource. This may sound mad, but from time to time it helps to get some young talented people to help. I have and still do alot of my contracting with young artists who may not have a track record. I buy them Photoshop Elements (Or get them to use some opensource app) and Milkshape. They sign contract (Or their parents) and thats it really. So instead of paying $10,000 for 5 characters from Bobo (Which would be top notch stuff mind you) I pay about $1500 for the 15 characters, sure some polies are wasted etc, but it sure beats paying 10k.

      Proper business plan is a pain, although I have a strong business head on me, I did bring in outside help on this. The company I brought in were not traditionally in the electronic media business, but they knew enough from book publications etc as to how I should do things. They guided me through everything, and have since signed up to be one of my publishers. IF you cant do it, get somebody who can, but try and retain that degree of control.

      Finance is a pain, I still havnt managed to get that 3million startup capital, but I refuse to go to the bank for anything. I have a simple way. I develop about 3 websites a week and hopefully 1 till system a month, and my earnings from my full time job. I take a personal cut, and set aside my tax cut. The rest I retain for development. This development fund builds up and as I get more and more I splash out on SDK’s and build on my current holding. Yeah its a slow process and it takes some time, but it works. I never owe anyone anything, and everything I have is mine.

      As with investors, I have come this far on my own, and I prefer to retain the control. While a large investor would be great that would reduce my say and ultimately could effect my product. I personally take the approach of surrounding myself with people I know as investors. Accountants, Writers, Local Business Men etc. All people I know for years and years. They see how I progress and understand the process I am going through.

      My first studio was started about 2 1/2 years ago, I would consider it a huge flop, although I did learn so much. I trusted the wrong people and it has tought me a long hard lesson. My second studio pretty much took over from where the first left off. I took my knowledge and my back catalog with me. So I was off to a running start, with websites and an instant till system. All very good. As for information I feel enterprise Ireland have no real grasp of the industry, i have approached them over 3 times by now, with no real benefit, but then again it is hard to explain how I run the business. Not saying I have a grasp of the industry. I have none, other than what I do, but I know what and how I want to do things which is good enough for me and gets me working well.

      As for where to get info, I usually find the net is the best place, and I try and get involved with communities such as maxforums etc. just to get a greater picture of how others feel the industry works. I think its a pure mystery to everyone really!

      Is it tough to start, sure is, Working for yourself is great but it all comes down to you, and your team. That was my fatal flaw first time round. I relied on a team that were ultimately not up to the job. No amount of work on my part would have saved us. I either did everything or it would have failed. In the end, doing everything simply proved to much, and the damage was already done.

    • #16553

      Hi Jamie,

      This is a huge topic – and all the areas you listed, present their own challenges – and that’s to just get the ball rolling – never mind the difficulties faced one the studio is ‘up and running’.

      However in my personal order of preference here is what should be looked at to give a good start and unfortuantely they are all connected (in my opinion):

      1) Devise a solid premise for a game – document it – describe the game play experience – list it’s features.
      2) Evaluate the tools to be used in making a robust prototype of the game (if you are proposing to have 3,000+ Poly characters in your game etc. etc. make sure your prototype tools can produce and show them off well and with a good frame rate!!)
      3) Produce a prototype time line
      4) Double the prototype time line
      5) Add an extra 20% on to the time line
      6) Select or identify the skill sets required to produce your prototype
      7) Decide if you are going to use any contractors or produce fully in house – then get your team together – make sure you have at least 1 programmer and 1 artist with previous games development experience – preferably at least one published console title each!
      8) Decide how you are going to sell the prototype (to publishers)
      9) Start building up contacts and determine which trade shows you will attend to meet people
      10) Price the whole package including the usual Rent, insurance, flights, hotel accommodation, Show attendence fees (Game Connection, GDC) and utilities etc. etc.
      11) Build your plan – showing how your game has a market and what its potential revenues may be – comparisons to other games within a genre can be very usefull here – but most importantly show how someone can get a return on their investment!!!
      12) Cost in a 10% contingency as part of the overall plan – this is software development its not like it wont be needed.
      13) Approach potential sources of investment – but you will probably have to bring some level of seed money (from friends, family etc.) to be taken seriously
      14) Show that you have consulted with otehr developers and are able to get information from the experienced developers at home or abroad.
      15) Make a good presentation to investors (dress appropriately)
      16) Follow up any action points with potential investors immediately.
      17) Always be contactable during this proccess
      18) Never committ to a stupid reductions in cost or timelines during negotiations – this will only bite you in the ass.

      Lastly you need to have an unshakable belief in yourself, and fundamentally you need to answer ‘Why does the industry need your game?’

      Once you have got the funding to green light the jobs and begin production – then a whole host of other problems will arise… but thats another days work!

      If you would like to flesh this out some more – hopefully I will finally be able to make a shindig – and see you this Friday (if it’s possible!)


    • #16557

      Two main areas for us that i agree with the last two posts is :-

      1- The correct team involved, work experience behind them in the industry or closely ralated. Do not give complete control over to the team for at least one reason, they need you more, need your direction, its your baby. Trust your judgement even if you dont understand all areas but do get advice from other experienced people from the industry if you can or get talking over the net, we all need to be pushed to better ourselves. Your team will be your backbone, dont break it, work it.

      2- Extra Time, again & again & again. A well development design doc laying out the steps will speed things up & keep your team on the same page all the time by breaking it up into milestones. Keep breathing space always to allow small changes, sick days, holidays, etc. etc. unexpected delays are going to happen, there is no way to avoid them, its a fact of life. Acknowledging this is the first step in the right direction, then its just a matter down to you on the rest to know your project & its limits (plus the limits of the team). Just keep adding more time to your project at least by double the amount you expect to complete it at the most delayed time you already thought it would be. :)

      Best regards


    • #16561
      Jamie Mc

      Hi guys,

      Thanks for going into so much detail, and a lot of the things you have said have been things I was expecting to hear (which is good). It’s just for something that I’m thinking of a little further down the road.

      Maybe another little addition to my previous question too, would techs prefer to deal with someone who would cover all (or most) these areas, and at what point would you bring business people onto the team full time (and I’m definitely not job hunting in case you ask, so don’t think I am). I’m looking at putting a lot of information together, but there seems to be very few (if any) business people who work in games that aren’t attached to an individual company.

      I hope this is making sense, and I’ll be around on Friday from 6.30pm until around 9pm at Toners so if anyone wants a chat then, I’ll be there with my pints >:)

    • #16571

      Probably the best business person you can bring to the table is yourself. If you know your product, you can research the market yourself, you can target the correct investors that will suit your needs. You can establish your own budgets, your own timeframes. At the end of the day if you are 100% honest and realistic with yourself, you can pretty much do it yourself. It will take time and effort. But you are in control and you can drive your product in the direction you want. If you need help on anything such as additional research contact a graduate or people still in college or even a respectable firm. Just try and maintain the level of control you feel comfortable with.

      You would be amazed how well you could break down the games market by yourself. Stats and figures are easy to come by, and putting them together is even more logical if you have played or know anything about the games, who is to say the business person will categorise the right games for you. Just because you are making an FPS doesnt mean you are in the same leagure or field as HL2 or Doom3. For example a typical business person may class Thief3 as a FPS, while it would be more a Stealth/Action Game, which is clearly not the same as Doom3 or HL2.

      But then again you could happen upon a business guy who actually knows about the games industry and then you have scored big time.

      The 2 business people I got involved dealt directly with accounting, so they were of no use other than assisting in how I should structure the companies revenue model.

      While my primary business researchers happen to be a Movie Buff, and a profesional journalist. Not your typical business people grant you, but they have a knack for spotting openings in the market, and new directions for the games. And can easily validate any decisions we make

      Publisher wise, I have a book company involved and until I am closer to finished release I am reluctant to expand out looking for more mainstream publishers. But with a near finished product and 1 Large primary publishers and 2 smaller ones, its not to foolish to be confident in securing some other publisher.

      Keep it small, simple and manageable. If you cant do something find someone who can, and then piece everything together

    • #16572

      A quick reply to your question, you need business people from the very start, just one person who knows the industry at least. Getting a person who is willing to advise you from the beginning helps the most as much as having a good game idea & a good dev team.

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