How to Start a Mobile Game Company…With Business in Mind

found gaming studio
nicholas laborde

Nicholas Laborde

Making a mobile game has never been easier, but surviving as a business is tough (and getting tougher) for indie devs. So how do you balance the fun, creative side of the job with the boring-but-necessary business side? I wrestled with that questions when I started my studio Chronicle Games two years ago. Like many indie founders, I’m forced to wear multiple hats. And business is the hat I like the least.

Enter successful Nicholas Laborde of Raconteur Games, who offered to play a little game with me: To illustrate how to successfully set up the business side of a mobile game venture, we’d pretend that we were going to start a second game company together. Here’s how he recommended we go about it:

Start with communication

If there’s more than one founder at your studio, you’re lucky. Studies show startups with multiple founders have a better survival rate. Even so, founder disagreements often kill companies. So, if you do have a partner (or two), start off by making sure that won’t happen.

Step 1: Clearly define roles and responsibilities. This is particularly important in a game company, where roles tend to be divided into art, design and engineering.

Step 2: Write a mission statement. No, it doesn’t have to sound like the human resources blabber you might read in the back of a big company recruiting pamphlet. Laborde says you only need to answer clear questions like, “Why are we in business? What are we getting out of this personally?”

Resources: Cofounder management, Riot Games on having a mission statement

(Semi-) Formalize the business

Once you’re done setting expectations, it’s time to start work with your fledgling team in place. Congratulations, you’re a business! “People think, ‘Oh, it’s not a business until I go sign the paperwork.’ That’s totally not true,” says Laborde. The legal aspect is the part many first-timers fear, but in truth, it’s one of the easiest parts to get past.

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Step 3: Fill out your ranks. Unless you have multiple cofounders, some roles still need to be filled, either with your first employees, or advisers and mentors. Many indies have a do-it-all mentality, but Laborde, lacking art or engineering skills, has a more Zen philosophy: “My management style would be that since I don’t know these things, I’d make it clear that I don’t know, and I’m going to trust the people we find to get it done.”

Step 4: Make it official. Decide if you’re going to be an incorporated or unincorporated business and fill out the necessary paperwork (see resources below). Sign contracts with the employees and advisors you find, clearly stating any roles and remuneration (including company stock). But save some budget and energy. Don’t dive in too deep yet on this step: Free contracts are available online, and most countries have decent allowances for unincorporated businesses.

Resources: Unincorporated vs incorporated businesses, contract() – standard contracts for game developers, TaylorWessing – free tech industry legal documents

Check your assumptions

Since you’re starting a creative business, you’re likely buzzing with ideas. Still, excitement alone won’t make for a successful game.

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Step 5: Run the numbers. Define your target platform and growth prospects for some of your game ideas and run basic financial projections based on units sold by comparable titles. This is a step many game developers may be inclined to skip, feeling that it interferes with their creative passions. That’s a mistake. “What I find in the indie scene is we’re 99.9 percent technicians who are pouring our skill sets into things that are technically impressive, but we never stop and ask if someone wants to buy what we’re making,” says Laborde.

Step 6: Make a selection. Choose your first project by combining market research with personal goals. Whether you started the company solely to make money, or to make your moon-shot dream project, you should be going in aware of the risks and with eyes wide open.

Resources: App Annie, Priori Data, Steam Spy, Game budgets and sales numbers

Sell others on your concept

Finally, you’ve reached the point where you can begin selling your vision. If you’re like most new studios, the first people you’ll be selling it to are your potential investors.

Step 7: Calculate your burn rate. This is how quickly you’ll “burn” through your cash. Calculate in salaries, as well as every piece of hardware, software and miscellaneous cost you can think of — and then add extra on top (although you may wish to deduct your extras when pitching your costs).

Step 8: Create a prototype and a pitch. The prototype shouldn’t take months: in reality, many investors don’t know the ins and outs of game production, and may not know how to evaluate a 6-month prototype. A month may suffice to show your core concept.

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Step 9: Refine, refine, refine. Prove out the pitch on people around you. Before you’re going to investors, you need to get honest feedback on whether you seem like a sure bet. This is a process of refinement.

Resources: Burn rate calculation, What it costs to run an indie studio, Game developer pitch template, Raising venture capital for mobile games, How to pitch your game to publishers, Tips for negotiating with partners, publishers and investors

You may choose to do the above steps out of order, for instance building the entire team before formulating the mission statement, or finding the investor before you do more market research. “It’s just a puzzle, and it’s how do you align the pieces in the way that’s going to get the picture in your head,” says Laborde.

But for the average project the above steps are arranged in a practical order — it will rarely be possible to get support from others without doing significant preparatory work.

Don’t forget that there are resources out there for nearly any company need (short of big piles of money). When in doubt, do your research, and find people more experienced than yourself. Going into business is tough, but it shouldn’t be lonely.