The plan is simple: a friend and I are looking to start our own game development company. However, there is a major problem, namely that we know nothing about what is needed to start such a business, from a legal standpoint. Some of the specifics we need include: how to get the company officially started (filing the proper paperwork with the government and stuff like that). Finding employees in the area (for when we're ready to actually get stuff oficially started - there's some time before that), and more importantly, negotiating contracts with them. Finding funding for the game and how to get out name out there effectively (more the former than the latter). We know basically nothing about how to go about these things, and have difficulty finding anyone who knows enough to guide us. We've decided to start our own company because we have several ideas for games, but realized that without a means to produce these, they are rather worthless. It will be a little while before we're ready to take this step (hopefully we'll manage to get a playable demo ready within a couple of months, and I may post further with questions about that too), but this is stuff we need to know sooner or later and will always be a problem obtaining, so I wanted to post about it now.

Quote: Original post by Lancet Jades
we know nothing about what is needed to start such a business, from a legal standpoint.

The answer seem obvious [smile]. Talk to a lawyer. You'll need one anyway to draw up the employment contracts.

As for funding, if you've never made games before the only money available to you is from the 3 Fs (Friends, Family and Fools). No one is going to invest money in someone they don't know who has no track record of making a profit.

I don't know tsloper's website url, but search him in the forums and read his site. This forum's FAQ might also have relevant information

-me

"The Tentacle" wrote a similar post to yours just recently. You should read the answers he got in the thread entitled "Legality Involved in Beginning Game Development?"

Quote: Original post by Tom Sloper
"The Tentacle" wrote a similar post to yours just recently. You should read the answers he got in the thread entitled "Legality Involved in Beginning Game Development?"

Thanks for that idea! I found both http://www.gamedevkit.com/ and http://www.amazon.com/Business-Legal-Primer-Game-Development/dp/1584504927 as tips. Would you (or anyone else reading this) agree these are good steeping stones? I like to hear any possible opinions on stuff like this before dropping money (especially the ~$300 of that gamedevkit).

Quote: The answer seem obvious . Talk to a lawyer. You'll need one anyway to draw up the employment contracts.

Would anyone happen to know what kind of lawyer (if there is one) specializes in this sort of thing? As well as how much it would cost to talk to one.

Thanks for the help so far!

Quote: Original post by Lancet Jades
Would anyone happen to know what kind of lawyer (if there is one) specializes in this sort of thing? As well as how much it would cost to talk to one.

You should contact your local SBA. They can help you figure out the business end that isn't specific to games.
You can find a directory of game lawyers at the Obscure.co.uk website.
You should also read the articles about startups on my site.

You may want to find a local attorney with experience in corporate formation and general employment matters. There maybe special quirks of PA law that need to be followed that may effect your choice of corporate form. I would check with the Pennsylvania bar association for local attorneys and ask friends/relatives if they know anyone that handles corporate transactions. Talking with an attorney to get a sense if they can answer your questions and provide the services are generally gratis, but you may not get specific advice without payment of a retainer fee. This fee can range depending on the location of the attorney, how complicated the work will be and how quickly you need their service. It's good to shop around and get a feel for who will be a good fit for you.

Quote: Original post by Lancet Jades


Thanks for that idea! I found both http://www.gamedevkit.com/ and http://www.amazon.com/Business-Legal-Primer-Game-Development/dp/1584504927 as tips. Would you (or anyone else reading this) agree these are good steeping stones? I like to hear any possible opinions on stuff like this before dropping money (especially the ~$300 of that gamedevkit).

Quote: The answer seem obvious . Talk to a lawyer. You'll need one anyway to draw up the employment contracts.

Would anyone happen to know what kind of lawyer (if there is one) specializes in this sort of thing? As well as how much it would cost to talk to one.

Thanks for the help so far!

Gamedev recently published a book about the game business, which you can find on Amazon. You can also check the resources section of this page for articles on starting your company, financing, etc.

You can also check out some of the business planning articles on my blog, which is linked in my sig.

There are many, many attorneys out there who may help you. However, legal expenses aren't cheap and you want to do as much homework as you can so you're not wasting money asking questions that you can get the answer to anywhere.

A few things to keep in mind-- when starting a business, it's a good idea to work with someone who is 1) familiar with your local rules and statutes concerning the filing information, taxation, and formalities of starting up a business; 2) familiar with the intellectual property issues you'll confront in any software or technology field; and 3) has enough contract drafting experience to give you useful assistance in transforming any form agreement you want to use to suit your personal needs, or can draft your agreements for you.

I recently passed the bar and will be a joining a firm in Seattle that does a lot of work for entertainment and new media start-ups. But as I said, you ideally want to work with someone local when starting out.

Quote: Original post by madelelaw
There are many, many attorneys out there who may help you. However, legal expenses aren't cheap and you want to do as much homework as you can so you're not wasting money asking questions that you can get the answer to anywhere.

This is EXACTLY the reason why I'm asking stuff here. It'll still be a while before we're ready to take the huge step of forming the company, but as they say, forewarned is forearmed.

Thanks for the links and tips, everyone!

Hello All,

I think that before looking at all the procedures of creating a company, the people behind should know something very fundamental to any kind of company, operating in any kind of market. Do you know the business of developing games?
Have you already worked in the industry and know the main parameters affecting videogame studios?

If you don´t know the business or technical part of it very well before you put your money ( family, friends or fools) you are doomed to failure, as once you have started to operate you will no have time to think about how to do things, you will just have the time to actually do them.

In any entrepreneurship training, the first thing that people wanting to create their business, is to actually know very well the market where they will operate, and to know very well, the operations and processes of the company to be created. The majority of new companies died before the first year, and most of them due to the fact that the people behind the companies didn´t have sufficient level of knowledge about the industry.

Once you are cleared about that, every thing is a pure lawyer/accountant labor to give a legal birth to the company.

After that, you need to be very clear also about a very important law of business creation ;) a company without clients/Customers is a dead company. Which means that a lot of people usually doesn´t start legally the company until they are sure about having acquired the first customers. Usually they will keep doing their usual job while working afterhours in the process of setting up all the main processes about their personal venture ( preparing technology, Marketing information, business plans, prototypes, prospecting potential customers, etc...) and once they have been able to guarantee that they have already someone that will buy their product, is when they are actually opening /Activating the business.

I don´t want to bring pessimism into you, but rather to inspire caution and common sense. If you are sure about it, then jump forward, because even if the first company goes wrong, it will be a very valuable experience for your future.

Regards,

Game Developers