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Next step, making a company?

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So, I've made a game (a 3D MMO), that I first published for mobile phones, and recently got the computer version accepted on Steam (through Greenlight).

 

When I first published the game in mobile, I did it under my personal developer account.

While I did not any marketing of the game, I still got around 100 thousand downloads. "organic" downloads, is that what you call them?

My logic is, the visibility in the mobile market is almost null, and still I got lots of downloads, so in Steam people probably many will probably find my game.

To tell the truth, I don't really know what to expect of Steam in terms of sales and such.

My question is, should I make a company or just continue doing business as an individual?

 

Some facts:

- I'm the total owner of the game, made most of it myself, the rest was done by remote contractors

- I've thought about the possibility of getting an artist working together with me full time (either for a % of sales or a fixed ammount per month?)

- I don't live in the USA, I live in Portugal. Making a company here costs around 400$ to start, but I'm not sure if there's any extra cost  (maybe accountant?)

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100 000 downloads on a F2P 3D MMO on mobile?

Are your in-game sales recouping your investment in time and effort? If so, I would definitely suggest starting a company and building upon this success.

Steam will undoubtedly improve your visibility, but it would be very tough to determine how much just from the above.

Can you link us to your actual product?

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100 000 downloads on a F2P 3D MMO on mobile?

Are your in-game sales recouping your investment in time and effort? If so, I would definitely suggest starting a company and building upon this success.

Steam will undoubtedly improve your visibility, but it would be very tough to determine how much just from the above.

Can you link us to your actual product?

 

I did not know it it was against rules to link the game, but here it is the link for the Android version:

https://play.google.com/store/apps/details?id=com.terra.minimon3d

 

However, I did some kinda experimental with this game, I released the game in a beta state for Android, in order to get enough feedback about features, bugs etc, something similar to Steam Early Access, altough for free.

The initial versions were buggy, and simply did not work in many devices, so I lost a big chunk of players because of that. Others continued playing since the very start, and gave a lot of feedback.

 

I did make some money from it, but much was invested back in improving graphics or paying for server costs etc.

But of course, the sales are increasing with each month, since the player base continuous growing, and now with the Steam release it will probably be more popular.

 

What advantages are there in having an company, if I am just one guy?

I think there might be differences in terms of taxes and stuff, but course, that is something that I need to investigate myself, people here don't know my country laws.

A friend told me it would look more "professional" to have a real company, but other than that, are there other advantages?

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The biggest benefit that I can think of, for a person in your situation who doesn't need outside investment, is legal/financial protection.  I'm not sure about Portuguese law, but at least in the US, having a corporation helps to shield the owner's personal belongings from legal action taken against the corporation.

 

For example, let's say that your code was accidentally charging people for items they didn't purchase, but somehow the severity of the problem wasn't really noticed until the invalid payments were quite significant.  But you, thinking that all the income was legitimate, had already spent most of it on advertisements and on contract work to get better art made for the game.  Your players demand their money back, and someone takes it to court.  The court decides that you must pay your players back, but you don't have the money.  In that situation, if you've properly set up a corporation of some kind, then they can force your company to declare bankruptcy, sell off all its assets, and drain its bank account in an attempt to pay back the players.  But they can't go after your personal bank account, your car, your house, et cetera.  However, if you're doing everything as an individual, it's all fair game, and you might find yourself in quite a bad situation after an unexpected legal fight.  (A corporation isn't 100% protection, as it is possible that the courts can get to your personal stuff if they think that you were intentionally actually acting fraudulently.  The corporate protection is more for an honest businessperson for whom things just went very poorly.)

 

Standard caveat, I am not a lawyer, and as noted, I really don't know anything at all about the nuances of Portuguese or EU law and business.  But the above might give you a starting point to investigate.

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Thanks Andy, that seems a good point, something that I need to investigate, maybe be similar to US, or different, I really need to check!

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Actually, a company would need to be an LLC to shield you from this. (LLC stands for limited-liability).

Not all companies are LLCs.

 

There are other advantages to having a company, but without more information about the system in place in Portugal, there's hardly anything we can help with that. This, however, underlines your need to get in touch with a lawyer. A local lawyer will better be positioned to help you identify what you should do in that regard specifically.

 

Don't worry, getting in touch with a lawyer is actually simple (I used to see this as a big obstacle myself). Setting up a company is, actually, quite simple at that. Talking to a lawyer is simpler yet. Chances are, you might not even end up paying a fee for asking this question (lawyers often want to foster long-term relationships with businessmen, and will freely answer some general questions to give you confidence in their ability, it's like a salesman pitch really).

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You probably want to speak to a business lawyer and possibly a financial adviser -- they will tell you what structures are best for protecting you, personally, from any failings your business might experience, the pros and cons of various structures, and how best you can compensate yourself from your company's earnings.

 

Laws are probably very different where you are, but for example an LLC here in the US protects your personal wealth from claims against the company. Here, you need to have a corporation to offer stock (IIRC, I may be wrong) even to employees or yourself. I know of some people who form corporations so that they can pay themselves a modest, regular salary (if they can afford it), but they effectively pay themselves a bonus by issuing themselves a dividend on their stock -- this is done because it offers the greatest tax advantage for themselves and their business.

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