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How to Start a Video Game Company

How to Start a Video Game Company

The popularity of video games shows no sign of slowing down. And while there may be a lot of market competition among game companies, the video game industry also offers a lot of good business opportunities. Whether you plan on going it solo as a game developer or you are looking to gather a group of talented friends to develop and deploy new video games, you’ve come to the right place.

This article covers everything you need to know about starting your own game development company. Learn what it takes to get started, how to plan for your own business, and what you need to do in order to get your business off the ground.

Do You Have What It Takes?

Some video games are developed in their entirety by a single programmer while others have small teams of people involved in many different aspects of the game. Video games may be developed for mobile devices, personal computers, or online play, or they may be designed for a specific gaming platform like PlayStation or Xbox.

Developing a game requires a variety of skills and know-how. You need to be able to program, design graphics, come up with game rules, and more. If you already have these skills and are ready to put them to use then you can get started right away. Otherwise, you may wish to obtain a degree in game design or development to prepare. Some game designers are self-taught; you may be able to learn everything you need with some solid self-study and the help of online tutorials.

If you plan on running the business but staying out of the game design process itself, you simply need to hire the people capable of doing so. Keep in mind that you may need to create a few games before you hit upon one that attracts a wide audience.

Developing Your Master Plan

While you might think that starting a video game business just requires that you build a game and then put it out into the world, there is a lot more that needs to happen behind the scenes in order to achieve success. The following list gives suggestions about what you should consider as you organize your business ideas:

  • Decide what types of games you will make. What are your game ideas? Are you developing apps for mobile gaming or for multiplayer RPGs? Is your focus on puzzle games or first-person shooters? Clearly define what platforms you’ll design games for and what types of games and gameplay options you will create. This will help establish a distinct identity for your company and will inform your business plans.
  • Assess your skill set. Determine the skill sets of you, your business partners, and anyone you plan on hiring right away. Make sure that all needed skills for completing the games from start to finish are there. If not, arrange for training or consider outsourcing some of the work to freelancers.
  • Create a design process/development cycle. Develop a detailed plan for how a game will be developed from start to finish. This includes timeline estimates and work hour estimates for a given game. You should also plan an update cycle for existing games so that you can fix bugs or deploy updates as needed.
  • Identify your target market. Who are you designing your games for? Are you creating educational games for elementary children, simple games for phone users, or games with involved storylines and complex subject matters for gamer teens or adults? Clearly establishing your target market will help guide your design process to best meet the expectations of that market.
  • Determine how you will set your prices. What price will you sell your games for? Will some games have add-ons for an additional fee? Will you offer games by subscription? Figure out your pricing model by looking at what different types of games typically cost in the current market and estimating sales numbers along with overhead and other expenses. Unless you rely on investors, keep in mind that you may be working on a shoestring budget to start off and won’t generate income until game sales occur.
  • Determine how you will be initially funded. Because you won’t make money until your games sell, you’ll need a plan for sustaining yourself, any business partners, and your employees until your games are on the market – especially if this is what you plan on doing full time. Perhaps each business partner will contribute personal money for the start. You could also seek investors or apply for a business loan. Some indie game companies find success funding video game development with a crowdsourcing campaign, such as on Kickstarter.
  • Research local business and labor laws. Look up the local business laws and regulations for your area. Some cities or communities might require that you obtain certain permits or a business license to operate a business in that area while others may have no additional requirements.
  • Develop a business plan. Drafting a business plan is a great way to sort out how your company will run. A business plan is a document containing the goals and procedures governing your business.

Preparing Your Video Game Company for Launch

Once the planning is complete, you can start dotting your i’s and crossing your t’s when it comes to the paperwork, marketing, and ultimate launch of your company. Each of these processes is outlined in the sections below.

Legally Form Your Company

Different cities and states have different legal requirements for forming a new company; however, you can often find the paperwork and information you need on your secretary of state’s website. There are typically some forms to fill out, which might be done online or sent via mail, and some fees to pay.

When forming your small business, you will need to decide on a legal business structure. Options include a sole proprietorship, partnership, limited liability company (LLC), or corporation. Take some time to research the implications of each business structure so that you can make an informed choice. Each structure comes with different legal protections, paperwork requirements, and tax status.

If you will be operating your business under any name other than your personal legal name, you will need to register the name when you register your business. Often, your secretary of state’s business website will have a searchable database of business names currently in use so that you can make sure the name you choose is unique. In some cases (such as with a sole proprietorship), you may not be required to register your business at all but you will still need to file a “doing business as” (DBA) or trade name to let your state know what name you are operating under.

Check to see if you need a federal and/or state tax ID number for your business. An employer identification number (EIN) from the Internal Revenue Service (IRS) can easily be obtained online. In most places, sole proprietorships and LLCs are “pass-through” entities when it comes to taxes, meaning that you will account for business taxes on your personal tax return. Note that some cities and states may have additional tax requirements for businesses.

Develop a Marketing Plan

After you’re done filing the paperwork, you should allot some time to developing a marketing plan. This is something you can be working on during the entire development process for your first game in order to build an audience who will be anticipating the release date. Here are just a few ideas to get you started:

  • Design a logo. Every good gaming company has a logo. If you have the in-house creative talent to design one yourself, then do so. Otherwise, it’s well worth it to hire a graphic artist to create just the right logo for your company. Be sure to include the logo on your website, social media, products, and other advertising.
  • Build a website. A website is a great way for people to learn about your company and your games. Choose a domain name that goes with your business name and is easy to remember. You can probably set up a simple website on your own or you may wish to hire a freelancer to design one for you. When you release your game(s), you may want to include links on your site for downloading and payment.
  • Invest time in social media marketing. Social media can be a great tool for getting the word out about a new game. Create accounts for your game company on social media platforms like Facebook, Twitter, Instagram, and others. You may even wish to create separate accounts for each game. Many of these platforms also allow you to create targeted advertisements and reach a larger audience. In addition, you can reach out to influencers on social media to help market your games.
  • Reach out to prospective beta testers. Visit online gaming forums and gather beta testers for your game. Not only does this help with word-of-mouth advertising but it also helps you improve your game.
  • Conduct market research. It’s important to know that your game concepts will translate into a successful game before devoting considerable time and resources to their development. Consider investing in market research to get a better sense of what consumers expect a good game to contain.

Prepare for the Day-to-Day

Once everything is planned out for getting your video game company started, make sure you also have things in place for handling day-to-day operations. For example, you need to track expenses and handle the bookkeeping. You should also have processes in place for handling game updates, bug reports, and payment processing once you begin offering your games for sale.

Skynova is a great source for customizable purchase orders and other forms that might prove helpful when tracking business purchases. We also offer all-in-one invoicing and accounting software to make it easy to keep accurate records of all financial transactions.

Get Started With Skynova’s Software Products

If you’re ready to start your video game company today and want some help with forms, templates, and bookkeeping – all tasks that can distract from the more important (and exciting) task of developing new games – Skynova can help. Skynova offers many software products designed to help new startup business owners like you with bookkeeping and expense tracking so you can devote more time to the rest of your business.

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