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Game Create first or Company Create First?

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My friend and I want to start our own game making company, but we didn't make our first game yet, and actually we're still learning like the basics of game making. But should we first make our first game, and then create our game company, and find a publisher/investor or should we first create our game company, and find a publisher/investor and then after getting the money, make our first game?

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I think this should be more in "The Business of Game Development" Forum. To answer your question though, I don't see why you couldn't do both at the same time. At the very least get the basics of the company going by registering the name with the state. Once the company exists, it can say sit idle while you and your partner make the game.

A question though. What kinda game are you making for you to need a publisher/investor. Are you aiming for a commercial AAA quality game or something "simple" but polished that you can sell easily and quickly? The scope of the development of the game should be fleshed out in detail then that way the path of: game first, company first, both at the same time can be answered more precisely.

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If you're still trying to figure out what you're doing, I'd say start making games first. Making games that people want to play, and will make money, is no easy task, and today can usually take a team of professional developers and thousands, if not millions of dollars.

Take small steps towards your goal, start by you and your friend getting together and making some small games, stuff like PONG, Tetris, etc, until you feel more comfortable with your skills and work your way from there.

Good Luck.

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Well, you know, companies have actually been made just on an idea, but you need to be a hack of salesman to do that.

I imagine if you have everything laid out pretty well, you can get investors. And what I mean by "well laid out" I mean, a business plan, and detailed outline of the game including drawings, test market research, peer reviews, and a good looking Suit!

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Hello,

Im not exactly sure how serious you are about this, as you come off like you are quite young to be persuing heavy business, but if thats your desire:

Register your business, this is going to cost anywhere from $500-1500 (depending on scope of trademarks, and the costs in your area). Then you want to go to your bank and apply for a business loan. They are probably going to expect you to put 20% down on it right there, so if your asking for $100,000, they will expect you to contribute $20,000 right then and there. You will also need a business plan, etc, as mentioned before. If you are going for a simple game, you could probably get away with taking out a $20k loan (so you only have to come up with 4k out of pocket right away).

Then you go about developing your game, once you have a nice demo to show for your work, hopefully you can get a publisher to take it. He will then (hopefully) pay you to complete the game and then some, with a trickle of royalties as icing.

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Quote:
Original post by Moolkye
Well, you know, companies have actually been made just on an idea, but you need to be a hack of salesman to do that.

I imagine if you have everything laid out pretty well, you can get investors. And what I mean by "well laid out" I mean, a business plan, and detailed outline of the game including drawings, test market research, peer reviews, and a good looking Suit!


this isn't exactly true, companies have been created yes, investors won't give you anything unless you have something to show these days though, which means: a darn good prototype or one heck of a track record.

during the IT boom investors shoveled money into practically anything but those days are over.

for the OP:

your first game will NOT make any money at all. your best bet is to make a few freeware games first to actually learn the trade (if anyone even plays your first game for more than a few hours you should be extremely satisfied). getting your first publisher practically requires a finnished or close to finnished game.

you want to start small with simple games, snake, tetris, asteroids, breakout, etc, once you got a firm grasp on how to actually make games you can either go with a bigger project (time consuming and thus quite risky), or multiple small but unique games that you can sell online for very small amounts of money ($5-$25). popcap does this and has a very large portfolio of small addictive games that are reasonably cheap (perfect for casual gamers or some fun during the lunch-break).

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thank you very much ^^, and right now we're thinking about starting with small games, perferably rpg games, and then we want to make quite alot of those. After that we have a goal of making a final MMORPG game, which was our primary goal until we realized that we need foundation beforehand.

I have another question though, I don't understand why it costs so much to make a game. I've been trying to do research to find out everything, since i am just a beginner. But apparently I can't find out why it costs so much to develop a game, (maybe there is some sort of logical answer that I don't see) but where does the money usually go to for the game development part? (sorry for asking such amateur questions)

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Hi,

Quote:
Original post by ForeverSilence
I have another question though, I don't understand why it costs so much to make a game. I've been trying to do research to find out everything, since i am just a beginner. But apparently I can't find out why it costs so much to develop a game, (maybe there is some sort of logical answer that I don't see) but where does the money usually go to for the game development part? (sorry for asking such amateur questions)


The reason costs are so high is because of time, and the number of staff required to make AAA titles. I am aware of teams of 100+ (peak - profile follows skewed bell-like curve) that work for several years to produce hit titles. Just paying these staff for their time is a massive cost - excluding middleware/SDK licences, outsourcing, building, development machines etc.

Cheers,
dhm

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Quote:
Original post by ForeverSilence
thank you very much ^^, and right now we're thinking about starting with small games, perferably rpg games, and then we want to make quite alot of those. After that we have a goal of making a final MMORPG game, which was our primary goal until we realized that we need foundation beforehand.

I have another question though, I don't understand why it costs so much to make a game. I've been trying to do research to find out everything, since i am just a beginner. But apparently I can't find out why it costs so much to develop a game, (maybe there is some sort of logical answer that I don't see) but where does the money usually go to for the game development part? (sorry for asking such amateur questions)


Lets put it this way... lets say you were making a AAA game.

Average employee count is probrably around 40 people. Lets use ballpark (lowball numbers )

15 Programmers at @50,000$ = 750,000 / year
10 3D Artists @ 50,000$ = 500,000 / year
10 QA/Level Designs @ 40,000$ = 400,000
3 Leads/Managers @ 100,000$ = 300,000
2 Misc @ 30,000$ = 60,000

== 1.8 million per year
+ 40% premium ( benefits, employer taxes, etc... )
== 2.52 million per year


Rent, hydro, etc... for a building big enough ... say 30K per month
== 360K / year

Software With licensing, etc... + servers, etc...
Meh... lets say 200K one time fee, which is probrably going way lowball

Engine License ( Say Unreal 3 )
1mil +

So lets figure the game takes 24 months to develop ( which is quick ), we have:
5mil in HR expenses
720K in rent, etc...
200K for software
Plus 1 mil for the engine

====
@ 7 million dollars.


And trust me, im leaving out a million small things you wouldnt even imagine.

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I must point out a few errors on your pricing. $7mil is not your average AAA game. I would say more along the lines of $3-4mil is quite sufficiant for the development of a game. That is to say that there are upfront costs that can be reused from title to title. And if he was going for a more budget title, it will be ALOT less. While the costs of your employee ranges were right, if not a bit lower then usual, A building to house those people will NOT run you $350,000 unless your in a prime location. I know office buildings where im at that can easily house 100 employees for no more then 8k a month, which includes all their utilities. Also, they dont have to go unreal 3, and could pick another suitable engine or develop for say... the XNA platform.

If hes going to op for a A or AA game, where its only going to take 4-5 people a year, and they are willing to work for $45k a year, lowkey management... your looking at a few houndred grand tops. And im not talking about a budget title either.

I know quite a few games that proclaim to be under the $5mil mark, INCLUDING the licensing of IP which costs them $1mil. And these were retail console games. We arnt assuming halflife2, doom, final fantasy, or any of the super-game expenses.

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Something else to take into account is where your passion lies. In the beginning, if you have the time and ability, it's a good idea to get both your game and business ideas documented, but eventually you will come to the stage where you cannot manage both the design of your game and the running of your company. This would be the time to figure out what you would rather spend most of your time doing so you can plan ahead.
But if it's just you and your friend for now, it doesn't hurt to try to get both going. The more you can present to outsiders, the more credible you will be.

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Quote:
Original post by ForeverSilence
My friend and I want to start our own game making company, but we didn't make our first game yet, and actually we're still learning like the basics of game making. But should we first make our first game, and then create our game company, and find a publisher/investor or should we first create our game company, and find a publisher/investor and then after getting the money, make our first game?

Your first game is not going to be published by anybody notable. The sooner you disabuse yourself of that notion, the easier it becomes to come up with a sensible business plan.
  • First, gain competence: learn to make games, complete games, distribute your games independently.


  • Second, build a plan and enterprise to capitalize on that competence. Register a company, secure some initial funding (your own money, plus probably loans from friends and family) to found your startup, hire core employees and start building the game.


  • Third, secure financing/publishing. Get your game playable as soon as possible and prepare some high-res, glossy and glitzy promo materials with which you will pitch various publishers/distributors. Make sure you hire legal representation for the negotiations! Secure funding that guarantees you can complete the game and keep running the company until royalties come in.


  • Fourth, reinvest and grow. It's going to take a few cycles to reach the point at which your company is significantly buoyant, unless your first game is a smash hit - which you shouldn't plan on! Reinvest in your company judiciously, and look for opportunities to expand, whether by taking on some outsourcing work for other companies, doing ports to handheld platforms, etc. Constantly expand your company's competencies and seek to move to higher margin and better marketed areas in the industry. (Right now, that's the console space, but Microsoft alleges it is seeking to boost PC gaming, and I've started seeing "Games for Windows" branding and ads. Keep your ears to the ground.)


Have modest expectations and a contingency plan for the worst. Then, if the best happens to you, it's all gravy. Good luck.

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Whenever you work on anything with another person that you hope to make money with, always take care of the financial/ownership issues first.

Let's say you guys work together and put together some neat concepts. They might involve coding, characters, game concepts, anything. But nothing really comes of it and you go your separate ways. A couple years later, you create a game using some of those concepts and start making money. Does your friend get some of it? How much?

I guarantee your lawyer and his lawyer will have much different opinions.

-Dan Verssen
www.dvg.com

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