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What exactly do you mean by "game company"? Are you talking distributors, publishers, console manufacturers, developers? If developers then casual/mmo/boxed retail? - all hugely different in their operations.

As for the lack of availability of figures that is because developers and publishers don't release that sort of information. The only thing that the industry charts show is the relative positions of game titles sold in the UK (many of which aren't made by UK companies) but not the units sold. As for other financial information you would need to search out their accounts at Companies House.

There is some sales data available at http://www.vgchartz.com/ but (I believe) it is just for US sales and I do not know how accurate the data is. There are companies out there that track sales of games but they charge a lot of money for the data.

[Edited by - Obscure on May 13, 2008 1:32:07 PM]

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In the US we have EDGAR, which digitally transcribes corporate filings required under the SEC. Those filings usually contain financial data about a corporation and break down to quarterly and annual financials. That seems to be the kind of information you're looking for.

There are small business exceptions to the SEC filing requirements, most notably Regulation D. However, some state Blue Sky laws require public disclosure/filings of certain financial information when companies actively seek investors. This includes small businesses and start ups that seek investments over a certain amount.

Companies House is a safe bet for companies doing business in the UK. You can run company searches here. I haven't paid for reports through there, so I'm not sure if the financials are as thorough as what you'd get from US company filings through EDGAR.

[Edited by - madelelaw on May 13, 2008 2:21:50 PM]

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Sorry, I should have been clearer. I am looking for info on developers, mainly contract and freelancers. I know that this information isn't going to be easy to come by but I thought there might be some industry wide averages or something, maybe not. As a bit of background, I'm just about to graduate and am setting up a small games company. I'm a mature student and I've been programming games for years (though not professionally). My university has a great incubation scheme which will remove most of the overheads. I need to present a business plan and I am trying to do some sales forecasts. I was hoping to base them on more than guess-work, but I suppose I might not have much choice. Thanks for all the help - Tim

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> I need things like average monthly sales volumes and profits.

Sales information and cost structure are the kind of information companies keep confidential. Large public corporations typically show aggregated numbers that have only meaning for assesing the company's financial health and its management's performance; I'm not convinced you will find the information you seek from their financial reports. The way around this is to buy POS (point-of-sale) data from sources like NPD TechWorld; that's not cheap, btw.

The industry rule-of-thumb for development costs for a AAA project is around US$10K per man-month. Maybe you can find a project post-mortem with team size and timelines precise enough to estimate the cost structure and hence the profits.

Hope this helps.

-cb

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Quote:
Original post by Tim Ingham-Dempster
Sorry, I should have been clearer. I am looking for info on developers, mainly contract and freelancers.
You mean a programmer working as a contractor for other commercial software developers or an indie developer making small downloadable games and selling them over the net?

You say you want to set up a small company. How small, doing what sort of games on what formats?

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I'm mainly looking at working as a contractor or a freelancer for other developers. When we can get enough work doing that to pay the bills then we will look into doing our own stuff as well. As for size, currently its just me and potentially two friends, though they are undecided at the moment. The type of games will be more or less whatever we get paid to make, although when we start developing our own games we are looking at casual and educational sectors. Format will be mainly PC with a possibility of doing some XNA work for the 360. We're looking mainly at flash and java based web games to begin with. Sorry it takes me a while to reply by the way, my internet access from home is somewhat sporadic.

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Every business guide plan out there says, "do your executive summary last" (the bit at the front that summarises the whole report). I don't quite agree.

I think you should do this first as an outline of what your company is and what your company goals are. Then do your business plan, and then completely rewrite the executive summary again once you're done.

The reason I'm saying this is because you need to have a good idea of exactly what you want your company to be, and writing it down stops it being a bunch of abstract ideas that you can't explain properly.

Just nailing down what you want to set out to do should be your first priority. Once you have, give us that summary and we can be more help.


On another note, I started out a while back with the same problems or the scale of the company. I wanted to be a development company with staff, full game contracts, etc …but few people are going to take a chance on a graduate. So I started off freelance, with the aims to larger and larger projects and bring in other freelancers when needed, then staff. I said as much in my business plan.

The pros to this are that you start getting money to pay off your basic survival costs, you gain experience for your CV/portfolio so you can get better jobs, and you make contacts with the people you work with, for or even against.

The cons are that you will have to start on the very bottom rung of work. I had to do some really poorly paid, uninteresting visualisation jobs. From there I got more interesting work that was poorly paid with overtime. You’ll have to get more than one job at once to have any kind of security and you have no time to yourself (same goes with when you’re a company with staff).

In the end, I got offered a cushy job with a good wage at a games company before my company was ready to take on a team contract. I suggest you skip my first few steps to that plan if you can :P

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Just read your last post. You may also want to know that I went into business with a friend, but it didn't work out for reasons I can't go into. In order for the company to do well enough to at least put food on my table, I had to lose a good friend.

He was undecided too for a while before we started, so I should have seen it coming. You need to have a stupid, almost dangerous-to-yourself amount of commitment for the company to succeed.

And as I said before, people aren't just going to offer you game contracts if you've just graduated. You'll have to take other work to build up your reputation to be able to do that stuff.

To be honest, if you're not in it to do your own stuff ...then just get a job.


EDIT: oh yeah, and you'll need to sort your internet out. And a good phone contract. You're going to be spending a lot of time dealing with people.

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Thanks, I am hoping to do my own stuff eventually, but I'm willing to wait until the company is viable first. The plan is basically to do what you did, build a rep with freelance work first and take anything that people will give us/me. It does look like the others might drop out so thats probably not an issue. As to the phone and internet, the incubation scheme provides offices that have both, but I need to present my business plan to get on to the scheme. Cheers - Tim

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Tim, just want to make sure you understand that you are doing this ass backwards and that as a result it will be more difficult and you will be a lot poorer for longer.

Companies hire contractors for two reasons
1. They have proven skills and experience that the company needs and is willing to pay for.
2. They are cheap due to lack of experience.

As a graduate you fall into the second category and as AN_D_K points out you will be lucky to get any game contracts and those you do get will be lower paid and lower quality. You will be competing against industry experienced contractors who have all of your dedication, plus experience, contacts and skills you haven't had time to develop yet.

i. It's much harder to build a reputation by doing lower quality projects, which means you will be stuck doing them for longer.
ii. That means you earn less for longer, making it more difficult to get into a position where you can do your own thing.
iii. Due to lack of experience you will have a harder time securing work and that in turn means more time spent trying to find work (during which you won't be paid) thus adding to the problems listed in ii.
iv. The best way to secure work is via industry contacts. As a graduate you won't have those. More importantly you will have a harder time making them because you will be busy chasing work, you will be earning less so less able to afford to travel to/attend industry events to meet people and as you will be working at the lower end of the market the people you do meet will also be in the same market - not good for moving up.
iv. As a Freelancer you won't have anyone to learn from (clients won't invest their time/money in teaching you) so learning and improving will take longer.

Getting a job as an entry level coder at a decent studio will allow you to learn from experienced colleagues, get experience working on decent games (which look good on your CV), make contacts with people who will be of more help in the future and, while receiving a salary, invest some of your own time learning about the industry/business so that you will be more successful when you head out on your own.

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Would you say that the benefits of getting an enty level coding job first outwiegh the loss of support from the University's business incubation programme? There are two reeasons that I am trying to do this now rather than in a few years. The second is that if I work in the industry for a few years, I will end up with financial commitments that I don't have now. That will give me a lot more to lose if things go bad. Also, is it possible to succeed the way I am planning to do things? If I try this for a year and fail, will it be harder to get an industry job than it is now? The biggest danger I see is that my company won't fail, but won't succeed either and I'll be trapped in a kind of limbo when I could have succeeded more easily the way you suggest. On the other hand, the University has had a few people set-up the way I am planing, and from what I can tell, they did pretty well.

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I know what you mean. If you don’t do this now and get a proper job you may enjoy the cushy life, the money, the lifestyle, etc and never go back to having your own company. To be honest, that’s not such a bad position to be in. If you really want to run your own company then you will no matter how cushy life already is.

Ideally, you should go to a larger development company just for the training. University just doesn’t cut it. It doesn’t matter how smart you are, there is stuff you will only pick up on if you’re working with people more experienced that you. I bet you’ll learn a million things about debugging properly in your first few weeks. You’ll also learn how to deal with people on your team, get your work to work with their work, learn how to work with the company tools (I didn’t know half of these tools would exist) and use the SDKs properly.


I was in a similar incubation scheme and saw a few successes. They took on the small crappy jobs no one else wanted, worked their way up and after a few years got a few decent contracts. The other companies failed or never took off at all.

However, these companies had to deal with things like overtime, low paid staff (less than minimum wage), uninteresting, crap initial contracts (if they even got one) and a complete lack of funds to even survive on themselves. You have to keep costs down so a lot of them were still living with or taking handouts from parents, or just living on the breadline like I was. Some were still getting the dole (dodgy) or working part of full-time jobs to get by.

They have to deal with clients looking to screw them over by piling on the work, paying half of what it would take to fund their own staff, delaying payments as long as possible …and then not paying at all for the final milestones because odds are you’ve either gone bust, you can’t afford legal costs or you won’t want to do business with them again anyway.

These aren’t just the chancers getting cheap labour on the initial contracts, which your incubation scheme will have contacts to a lot of, but these are also some established companies looking to make a quick buck at your expense. I can’t really talk about it but I don’t trust incubation schemes like this anymore after having been in one.

You have to deal with the other companies that are similar to yours. You have to be friendly to keep the local hub going and to pass around work or work for each other, but knives go into backs really fast and friends become enemies before you even know it.


It can be a bloody nightmare. There are three things you can do now depending on how good your portfolio is: -

If you can get an entry-level job then get it. I’ve seen your final project stuff in another topic so presuming you have other pieces of that quality you can show off I think you have a chance. Polish that stuff off and practice your interviewing skills.

Or, there is nothing stopping you looking for work using this scheme either at these start-up companies or using the scheme to get contacts to get work. You’ll still have to undergo the indignity of low-pay (or none occasionally if they have no funds) and long hours. But hey, it gets experience on your CV and you get paid a little to build up your portfolio.

And finally, you can go off and build up your company. Running a company is a full-time job… finding work, building contacts, business plans, cash-flow, taxes, dealing with clients, running projects, dealing with financial and legal issues (with trained professionals that you pay for), more dealing with clients, etc. The companies that do well tend to have someone that deals with all that while the others do the actual ‘work’.

I went with option 3, when I should have gone with option 2. My uni stuff was rubbish because I found the work there to be boring as it was too …academic! I wasn’t going to get an entry-level job so I went through just over a year of this hell to build up my CV and portfolio.

I went with option 3 because it can be great fun if you’ve got the knack for it. I definitely got a taste for business and I yearn sometimes to go back to it. It’s a bit more exciting than getting your paycheque every month…but in the end I had to get a proper job. I was on my own so I couldn’t run the business and do the work, I wanted the proper training you can only get at a proper games company and I started to get sick of being poor all the time because of one too many missing paycheques.

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OK, thanks for helping me understand all the issues better guys. At the end of the day this is something its going to take me a lot of thought to decide. I am leaning towards getting an entry level position if I can, but I have one last question if you don't mind:

If I do get an entry level position and want to work on my own stuff in my spare time, am I right in thinking that the company I work for will most likely own the rights to my projects?

Thanks again for all the help - Tim

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Make sure you discuss it with HR. Where I work(in the US so maybe very different) at least whatever you do on your own time is your own business as long as you don't compete with or do business with the company.(basically a no conflicting interests line) If you want to make games on the side as long as your not selling them it should be ok.

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Original post by stonemetal
Make sure you discuss it with HR. Where I work(in the US so maybe very different) at least whatever you do on your own time is your own business as long as you don't compete with or do business with the company.(basically a no conflicting interests line) If you want to make games on the side as long as your not selling them it should be ok.

Same in this little country. Although the rights to your directly competing product will not transfer to them, there will be a fine specified in your contract. Furthermore, everything created using company equipment (say a laptop) will be owned by your employer.

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Quote:
Original post by Tim Ingham-Dempster
Would you say that the benefits of getting an enty level coding job first outwiegh the loss of support from the University's business incubation programme?

Given your situation I would say go with the entry level job but that is a qualified answer as I don't know how good you are or how good the support is at your uni/incubator.

I have some experience with university incubators as I act as a mentor for game dev start-ups based at another UK university. The companies range from one guy (who wants to do the next Grand Theft Auto) through a couple of guys who "just want to make games" all the way up to small teams who have managed to secure commercial contracts with other developers/publishers. Via the mentor system (and the industry experienced guy who runs the incubator) they have access to industry contacts, useful info and cheap office space. Despite this only a couple have secured contracts mainly because most of them either don't have the skill, don't have the ability to run a business or else their team is just too small.

As a one man band without a proven skill set you won't be able to secure any meaningful game contracts. You might be able to work on a contract basis for one of the other teams there, but that depends on there being successful teams already within the incubator. If there aren't then getting a job is going to be the best way to learn the skills you need.
Quote:
Original post by Tim Ingham-Dempster
If I do get an entry level position and want to work on my own stuff in my spare time, am I right in thinking that the company I work for will most likely own the rights to my projects?

Most companies have a non-compete/we own your IP clause in their contract. With bigger firms like EA it will be hard to get around this but many smaller/medium companies will negotiate this out or will agree that you can do your own stuff, provided that it doesn't directly compete. A team working on a console racing game probably won't mind you doing casual games in your spare time, but a casual/mobile developer would see it as competition and not allow it. Talk to the HR person before you sign the contract.

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Quote:
Original post by Obscure
Most companies have a non-compete/we own your IP clause in their contract. With bigger firms like EA it will be hard to get around this but many smaller/medium companies will negotiate this out or will agree that you can do your own stuff, provided that it doesn't directly compete. A team working on a console racing game probably won't mind you doing casual games in your spare time, but a casual/mobile developer would see it as competition and not allow it. Talk to the HR person before you sign the contract.


Under UK law such clauses are very hard to enforce, so unless you're really hurting them they are unlikely to pursue it.
I know of at least one person working for a major developer who was also publishing commercial mobile phone games in his spare time without the company bothering him.

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Quote:
Original post by Jerax
Under UK law such clauses are very hard to enforce, so unless you're really hurting them they are unlikely to pursue it.
I know of someone whose employer did pursue them and the cost of that unlikely event was £5,000 in legal fees to get them to leave him alone. Talking to your prospective employer and asking them to clarify their position/remove the clause will cost you nothing. Arguing about it later (even if it doesn't go to court) will cost you thousands in legal fees.

Even a nice employer may feel hurt or turn nasty if they find out, after the fact, that you have been moonlighting. If a clause exists in a contract you must assume that it will be used in some way. If it isn't going to be used then the employer should be willing to remove it or give you written permission to produce a non-competing product.

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