I'm sort of at a turning point in my life where I’m thinking about starting my own game company. One thing you'll hear people say is "to be successful in business you must do what you love!” … well that’s one approach. I’ve been building & managing small to medium sized software projects for the past 10 years, and I see gaming as an interesting avenue for several reasons: 1 - gaming software development is extremely challenging 2 – there seems to be money and a market (more on this later) 3 – I do have that ‘passion’ for programming & gaming that would qualify it under something I ‘love’ So here’s the real meat of the thread... Even if I manage to get some VC (start up cash) and I manage to create a title.. say for xbox or ps2 in a year (yes I know, very aggressive) what are my chances of marketing and selling the title to make enough cash back to keep the company alive? Am I even barking up the right tree here?

The answer to that question is: It depends.

There are so many issues to deal with before you even get to talk with a publisher (which you will need or you are very unlikely to get your hands on any console SDKs) primarily you need a good game, with strong selling points. Making yet another quake game just won't cut it. Your choice of engine matters. If it is inhouse developed you are up for a heavy battle since your engine is not tested in the real world and is without history. Basically, unless it is a damn good one they will very likely be unwilling to invest in your game. If you can raise the cash then your best bet is to use one of the already available and used ones (gamebryo, renderware, unreal etc...)

Another option is to create your game as a total conversion mod (use unreal2 for instance) then you will have your game running showing your selling points.
Additionally you will have shown that your team is capable in dealing with code not written by them. A publisher is more likely to fund your use of the unreal technology if you are already familiar with it.

There are some developers out there whom are quite willing to give some helpful hints. Look around using google. http://www.dperry.com is one for instance.

Right!! Congratulations.
You have good reasons for start in game bussiness.

So, before starting your own company, you must think in your first title a lot.
I suggest start with a low risk title, easy to develop.
Be careful of developing games for consoles (xbox or ps2), it requires more experience that you think; only big companies are there, and for compete with them you need a big budget and a lot of luck. For that, you need an unique talented group people: skillfully programers, crazy artists, and people that have a lot of background in game bussiness for trading.Also, you need a publisher.

The best way for start is in PC market, precisely in online market. Internet provide you the way for publish your game by your own with no risk; there is no need to think on distribution costs.

Think about low duration projects (Three months). A Flash game make enough cash for keep your company alive, and you can retrieve money via online payment system, like paypal or E-GOLD.

You can start by reading background material on the market. This will help you understand the mechanics of the industry and ask educated questions to professional game developers. Here is an interesting link for that:

http://www.igda.org/biz/

The second step would be to talk to actual game developers and game studio heads. IGDA meetings are good for networking, but having friends in the industry helps a lot. Maybe you will find like-minded people who will want to jump from a larger studio into a startup. Also, many of those professionals have written articles in GameDev, GDC conference proceedings or the 'Gems' book series and have their email addresses in plain view; ask them a question about their article and lean the conversation towards more general topics you want to cover. You want to know how a studio is run, how it is making money, and what type of people fill which type of positions. You want your name to go around too; you are marketing yourself as a game developer, remember? People who know you are in a better position to recommend you to other people, be it other game developers, publishers or VCs.

Thanks for the thoughtful replies (especially the links!) I’ll follow the links, go do some more homework on this and check back in later – thanks again!

Is it as difficult as they say to acquire VC for game development projects? I get the feeling that VC's perceive game development projects as 'high-risk'

Quote: Original post by LouisHirst
Is it as difficult as they say to acquire VC for game development projects? I get the feeling that VC's perceive game development projects as 'high-risk'

From experience working in the industry I can tell you this. Unless you already have gold titles under your belt and an established team and business OR you are a good 80-90% done the game.. good luck because you aren't going to see any type of funding. Especially if you don't have any experience in the industry, they won't even look at you because there are people with all of the above credentials that still get denied.

There is also absolutely no way you will be seeing a console development kit without having a known and well backed/trusted publisher, even if you have a lot of money.

[Edited by - Saruman on April 22, 2005 8:17:09 AM]

What about mobile development? There is a lot of buzz in that secter. I would think that marketing and distribution is considerably cheaper because the game would be launched through a content distributer like Jamba.

Another advantage of mobile games is that you can publish mini games which will be quicker to develop than the graphic intensive 3D games that are the standard for console platforms. Providing you the ability to grow the company and get established in the industry rather than invest all your time into a costly long term project that has the potential to flop.

VCs won't take invest in a company unless:
The management team have proven experience managing a business
Relevant industry experience
An experienced team capable of creating the product

Even if you had years of experience you will still find it next to impossible to get VC investment because the game development business model isn't suitable. VCs want their money to be used to *grow* a company - not just to make the product. A game dev team need a lot of money just to fund one team - that doesn't give the level of company growth that VCs require.

Lastly 90% of VC applications are binned at the first reading. Of those that get to a second reading 9 out 10 will end up failing. So, while you should go ahead and do a business plan and start the 6 month+ search for VC funding (I know an established developer that spent over two years trying to raise investment) you should also start looking for ways to get your game made that have a greater chance of success.