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CoffinNail

Studio Start Up Costing

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I am looking financing for starting a studio and I am attempting to estimate start up operating costs. Does anyone know of some resources for general studio operating costs? I am not looking for anything exact, more of a starting point for what I can tell potential investors and creditors. Any good books, sites, anything on what costs are associated with a studio that creates media. My day time job is cost estimating for a construction company so I am knowlegable on how the process is done. The problem arises from the fact that I don't know where to even begin guesstimating for costs like electric, hardware/software, office supplies, etc. Is there anywhere that would have the information to give me a starting point?

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There's a huge mountain ahead of you but rather than be an internet discourager I'll just answer your question!

Secrets of the Game Business, 2nd Ed. [Paperback] by Laramee, Francois Dominic

Business & Legal Primer for Game Development by S. Gregory Boyd

Two pretty good books I've read that match up pretty much to my work experience. Also you may want to find someone that's done it before to help out as if you are getting investors it's pretty important to be able to cover knowledge the books don't.

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It also depends a huge amount on what kind of studio you're trying to start up. I'm starting up an indie studio beginning with just myself working from a home office, so initial costs are minimal. If you're thinking of hiring staff and renting office space then it will be much more expensive.

I second Secrets of the Game Business as a good book. I also recommend the Indie Game Development Survival Guide by David Michael if you're going the indie path.

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> I am not looking for anything exact, more of a
> starting point for what I can tell potential
> investors and creditors.

Tell them who the management team consists of! Investors *love* a good business story, especially one that has saavy management members as part of the cast, a huge and unsatiated market, and a killer value proposition / product plan. In that order.

> The problem arises from the fact that I don't know
> where to even begin guesstimating for costs like electric,
> hardware/software, office supplies, etc.

Salaries are going to be - by far - your #1 expense; and the better the team the higher the wages. This is a knowledge industry; the equipment depreciates to zero in less than two years so it's worthless in the eyes of investors. Your monthly cash burn rate is going to be the foremost metric used.

The industry average is around US$10K per man-month. All costs included. If you plan to get a 10-man team working on a game for 10 months, that's a US$1M expense endeavor right there. And I'm not counting the costs associated to selling the game. That's a separate issue altogether.

Hope this helps.

-cb

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Thank You for the responses. I am, of course, looking at something initially set up at home but it is always nice to have a plan for the future, if and when things progress. I actually have the Business Primer on its way from Amazon. I am currently seeking out an "Angel" for some additional advice. Anyone have some spare time on their hands or a couple million dollars they want to donate?

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