Hello, So, I'm forming a game studios to make games for the online retail channels, currently aiming for XBLA, PS Net, Wii Ware and steam. We met with a CA (charter accountant) and presented our rough business plan. What they wanted was more information concerning market conditions, trends, returns on sales, etc. At this point I'm trying to find some formal numbers on cost of dev kits, costs to submit a finished product to the respective platforms and the costs the platforms holder take as a % and any up front sales that take at 100%. I've started making phone calls and sending emails through the formal channels but its taking awhile to get what I need. This is fine, but if there is a quicker way to do this, I would of course prefer this. If anyone can point me the right direction that be great and I hope to be talking to a lot of people on here in the near future. Regards, MykC

Quote: Original post by MykC
At this point I'm trying to find some formal numbers on cost of dev kits, costs to submit a finished product to the respective platforms and the costs the platforms holder take as a % and any up front sales that take at 100%.

Not sure about Steam but certainly with XBLA, PSN & Wii much of that information is subject to NDA so anyone giving it out is either in breach of their NDA or giving you guestimates and hearsay. In addition the % you get will also depend on what % of the back-end costs you are paying in addition to development costs.

You also need to be aware that XBLA & PSN are no longer as indie friendly as they once were. MS and Sony are raising the bar for XBLA and PSN and pushing indie developers towards XLIG (Xbox Live Indie Games) and PSP mini - neither of which are close to PSN/XBLA in sales. I mention it just in case your new to games. If you have a proven track record in the industry it should be OK.

We are projecting $300K for development costs then $? for marketing.

However, we were interested mainly in how many units (game sales) we need before we would get paid. Without thinking about development costs, if we were to sell a XBLA title for $10 (I know its points, but for example sake) what % of that $10 is returned to the developer. In addition because we have industry experience but not on the business side we only have rough information such as WiiWare titles need X sales before there is anything at all return to the developer.

Indie developer, its kinda of a broad term, I wish there was a formal definition. We are probably going to be about 6-8 people large for this first project, some of the team has industry experience and but most don't. Our experience comes from the technically side not the business side. We are passionate about games and we believe we have the right combination of experience, skill sets, financing to execute our idea. But, this isn't a hobby for us this is our new way of life.

mykc,
You're planning to start a publishing business? It sounds like you don't have industry experience -- that you aren't ready for this yet. I could have misinterpreted this from what you wrote, of course.
It's far better to start out on the development side than to jump straight into publishing.

Edit:
OK, your 2nd post appeared while I was writing.
It's not my intent to discourage you, but it terrifies me to see you jumping into the shark-infested deep end of the pool like this, without any Scuba gear or spearguns or anything. And after smearing yourself with chum!?
Okay, that was a terrible terrible metaphor.
My point is -- do not rush through this business plan! Take as long as you need to put this business plan together. Figure out all the costs for everything, figure out all the marketing question marks too.
And hose the chum off (safely away from the pool) and get the necessary gear before you jump in.

BTW, I assume your $300K estimate is for one game. On one platform.
$300,000.00 Canadian = 286,251.10 USD, which is an underestimate.
If you were talking US$300K, it is perhaps a little optimistic. For a first game, with startup costs and platform licensing fees etc.

I appretiate all of your advice and constructive criticism. But, you don't know the answers until you start looking though. I have no doubt I have a lot to learn, but I will learn what I need to know to get the job done. I am always willing to at least listen to anyone who has advice or information to share. So feel free to warn, caution or direct.

I have been reading the answers, and I have to say, that to invest 300K in producing a game for a platform for which you seem to have almost no idea, is very dangerous, for you and for your investors.
I am sure that you can learn on your way, but the problem with running a company, is that by themselves they always give your more problems and more work than you were estimating, which means that there is not time to learn. You need to already know your way aroung as to be only concentrated on production problems.

My advice, would be to start with the XBLIG where you can basically reduce your costs down, while producing good concent. With XNA Studio + XNA creators subscription (99$). For Devkit you will only need a regular XBOX, and you will be able to learn and test with a smaller game and a smaller investment. If it works, you will be able to leverage the experience to the full XBOXLIVE and the other platforms.


The % for the developer is very good, and it is why more and more developers are jumping in this platform.

Regards,

Quote: Original post by game developers org
I have been reading the answers, and I have to say, that to invest 300K in producing a game for a platform for which you seem to have almost no idea, is very dangerous, for you and for your investors.
I am sure that you can learn on your way, but the problem with running a company, is that by themselves they always give your more problems and more work than you were estimating, which means that there is not time to learn. You need to already know your way aroung as to be only concentrated on production problems.

Yep. As I wrote in "Hit the Trenches Before Starting a Studio," one of my IGDA columns: http://www.igda.org/introducing-games-game-march-2003

$300k isn't enough for an XBLA game these days - especially if that includes the back end costs. I noticed that you plan for marketing costs, which is good, but if you don't have the back end costs too then that is a big chunk of money gone from your dev budget.

I am working with several developers who are/have done XBLA/PSN games and it is clear that MS/Sony are relentlessly raising the bar. Originally these platforms were indie friendly but now they are looking for XBLA/PSN to be a big publisher/big developer platform and are thus pushing indies onto the less commercial XLIG.

Another thing I have noticed going through the concept submission process is that MS/Sony don't care what game you want to make. They have a plan for their platform and they want games that meet that plan. I have seen some great games/ideas get turned down because they don't meet the platform holders idea of the sort of games they want on their console. You need to understand this and plan accordingly when you submit.

[Edited by - Obscure on January 21, 2010 2:23:49 AM]

Quote: Original post by MykC
We are projecting $300K for development costs then $? for marketing.

Just noticed the ? - a professional PR campaign will probably cost a min $30,000. That is an editorial only PR campaign, including press visits (flying around and staying in hotels), which excludes advertising (because advertising needs to be a $million campaign to have any impact at all).

You can do that sort of PR yourself but that means you need someone in-house to do that work and you need to spend time building contacts. By that I don't mean just compiling names/email addresses. You need to convince the press that you have something worth covering, which is very hard because they are heavily focused on triple A game from big publishers.

[Edited by - Obscure on January 21, 2010 9:57:08 AM]