There are a few ways to work on games with low budget, but it often creates a slower development process. It could be enough to get enough of the concept of the game ironed out to then go look for investors / do a kickstarter etc...

Game jams are a great way to get quick prototypes out of the door, and get used to designing game. The ones I prefer are the short 48h ones where you basically have 48h to create the game, and submit it. With a motivated team, there are ways of making decent prototypes for short games, or "vertical slice" (which is all the mechanics of the game, but for just a small level).

Additionally, I have considered seeking students looking for projects to work on, or motivated people that would be happpy to help create a game as a hobby.

Maybe creating challenges on forums for willing people to try a develop a part of the game, with some kind of reward for the person that created the best part, or something like that could work.

There are also longer types of "game jams", where the same project is worked on for multiple smaller jams, by different people. If you manage to motivate people to do that, and can offer perks like a place to stay for the duration of the jam, or food, or something like that, it could also work.

With a small budget like yours, finding creative ways to either create the game or generate money is a nice challenge, since going the traditional route is not possible.

I'm sure quite a few people could have interesting ideas or experience to share about creative ways of developping their projects!

For example, I am currently working on creating B2B business modeles that use my skills as a writer, game designer, concept creator, manager, tester etc... to finance the day to day expenses of my company and generate enough funds to go ask for funding from the Canadian government to create my own projetcs.

I actually have a friend here in Montreal that is working on a platform to connect students looking for opportunities to work on projects to improve their resumes, and companies in need of those skills that are open to work with students. Could be a great way to find some people motivated to work on a project for a low budget. The platform is still under construction, but you can sign up if you're interested at http://studentnucleus.com/

There are also other ways to find funding, like finding skills you have that you can sell, as a consultant or something, or finding products or services you can offer that both help you in creating your personal product, and help you fund it.

I'm actually basing my whole company on that unusual business model, aiming for each of the projects I do to end up being multiple products, and means of making money, so that I can generate the funds to create my own games and projects, without having to either sell my soul to an investor, or front in loads of cash.

If you want to discuss that in more details, I'd be happy to chat about it, and see how I can help!

As Hodgman said, there are a lot of different ways to offer your services, that change depending on the country you're in.

I know about Quebec, since it's where I created my business. Here, you can register as an individual. It costs 35$, takes 10 minutes, and you're good to go. You don't have any fees to pay (other than the usual retirement contribution, revenue taxes and stuff that everyone pays one way or another), or taxes for just being in business.

I'm not fully sure what you mean by "Pay like an individual". If it's about paying people you would work with to make the game, my understanding is that having a business is a good way to reduce the risks of legal issues. However, I believe there are ways to "pay" someone, as in compensate them for their services, without exchanging money. In that case, you may not need to have a business.

For example, I was considering the idea of finding some motivated new graduates looking for an opportunity, and offering them to spend 3 weeks in a nice cabin next to a lake (there are tons of them in quebec), that I would completely pay for, to spend the time working as a team, intensively, to create a game, and see how well we work together. This way, I don't actually have to pay them, but they get 3 weeks of "holiday" in a nice place, without having to spend anything, and spending their time doing something they are passionate about.

What I would recommend, though, is that whenever you create anything with other people, even if there's no payment, or it's just a short sting, a week-end game jam, or anything similar, to seat down beforehand with all the team, and make sure you are all on the same page regarding what happens if what you do grows afterwards, and then put it in writing and have everyone sign it. Doesn't need to be formal and validated by a loyer, but at least, having that agreement beforehand will save a lot of hassles (I made the mistake of not doing that for a game jam, and the rest of the team ended up kicking me out of the project as soon as it started getting some traction, requiring me to go through negociations with them regarding the ownership and right of use of the text I had written). You never know if something will be successful or have a future of any kind, and it's way easier to prepare for the worst before anyone started doing anything!

So yeah... to summarize all that... I think there are a lot of creative ways to go about compensating people for their services that are appropriate and do not require payement. Having a business makes things more real and reassuring for a lot of people you will interact with, and if it's easy and cheap to do where you are, why not go for it (though it's not worth spending all your cash on that!). And finally, aggree and what could happen in the future, and get it signed and in writing, it makes everything soooo much smoother in case problems arise!

No problem, glad I could help!

Regarding royalties, it depends on how much they trust in the project, and the project lead, I think. If they don't give all they can, then they reduce their chances of actually getting money in the end, since the game will probably not end up being top quality. On the other hand, if they do the best work they can, then there are more chances for the game to be a success. But if they don't trust that the person leading the project, and handling the communication side of things, to find customers and build traction, will be able to make the game a success, then chances are they won't be much interested.

I think chances are that if they agree to work for royalties only, that means they trust in the project and put in as much effort as they can, at least for people willing to spend more than just a few hours here and there on the project. And if they feel they have an impact on the design, and on making the game a success, they will probably be even more motivated.