Cost Estimates and Financial Requirements
How much does it cost to start a video game company? Starting can be expensive, but with the right tools, the costs can be significantly reduced. Software tools were estimated to cost around $37,000 in 2020. Real founders share their stories, revealing the exact amounts of money they make across every industry and trend.
Step 13 is to start making money! Video games are exploding, so now is the perfect time to open your own game shop and ride the wave. You could start from home, launch with a free game, and build buzz before going big.
Traditional physical games cost $50 to $60, while online games range from $3 to $4. Anyone looking to start without skills should have at least a few hundred thousand in the bank, assuming you will hire fewer than 5 staff and work on small indie games. The reason you see the same names on titles is that it takes money to build a company.
Reality of Game Development Returns
Core tasks depend on the type of company. A development company has to code and distribute, while a media company entertains, streams, or edits videos. Typical costs include education, tools, marketing, product development, legal fees, and accounting. Hiring freelancers brings the cost of a small app or game to $20K-$250K. Over 50% of indie games make less than $4K, but the top third do well—almost 1 in 5 makes over $50K, which doesn’t necessarily mean profitability. Indie developers can make $43K-$97K per year.
Starting Your Own Video Game Company
Step 1: Formulate a Business Plan
If you want to start a video game company, you need a solid business plan. Start by finding a team of professionals to assist in the development of new games. Secure a good location, acquire the necessary tools and equipment, and promote your business online and at local game festivals.
Step 2: Dive into Market Research
You must conduct market research to assess demand and potential for your business. Even with a great concept and design team, it is crucial to gauge market interest, especially with the emergence of mobile phone gaming.
Insider Tips for Success
Find out the exact software and hardware necessary to make state-of-the-art video games. Hire true professionals with the right background and give your team time to perfect their craft. Remember that success in this competitive business often takes time and persistence.
Step 13: Making Money and Going Viral
Now is the ideal moment to start generating revenue. Creating a game that goes viral could be incredibly profitable. But ultimately, success depends on various factors, and careful planning is key. With the right approach, games can be made on smaller budgets and still achieve great success.