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How Much Does it Cost to Setup a Gaming Company and Make a Game?

by Michael Smith on 06/04/18 05:38:00 pm

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 


 

 

How much does it cost to setup a gaming company? How much does it cost to make a game? 

It seems like every time I tell someone what I do, their first statement is something along the lines of, “I’ve always wanted to do that” and their second is one of the questions above. The truth is, there is no easy answer. To avoid a lengthy discussion on the subject, I usually just make something up, but in this blog I want to approach the subject with a little more honesty.

How Much Does it Cost to Make a Game?

It all comes down to what sort of game you want to create and what sort of skills you have. It’s the same with anything. If I wanted to renovate a house with no skill, no experience, and no contacts, I would need to pay for labor, supplies and specialists, and I would likely be charged a premium. If I was a builder, I would have the means to do it myself, to call-in favors and to scrape a whole heap of money off the budget.

If you want to create a basic game and you have good programming and design skills, it’s all about timing. These games can take anywhere from 50 hours to several thousand hours. If there is more than one person on your team, then that time can be reduced significantly, but in the end that’s pretty much all you’re putting in.

There are two issues with this. Firstly, most developers don’t have the breadth of knowledge needed to program, design, publish and market a game, and even if they did, they still need to pay the rent, and the less time they spend working their actual job the less money they will have to do that.

That’s why it’s always best to team up. Most of what I do now is delegating and supervisor, but back when I had a more creative role I took on the story creation and some of the programming, and a friend of mine did the design and the rest of the programming. We both worked as freelancers on the side and it meant we could cobble together a project in around 6 months without spending much. If we were short on money, couldn’t afford to publish or just didn’t have the follow-through, we would sell the project to clients and use that money to fund another.

We needed the right software and hardware, of course, but we secured a good deal on a host of electronics when we bought out our friend’s failed gaming company.

These days, I hire people to do the work on a freelance basis and it brings the cost of a small indie app or game to anywhere from $20,000 to $250,000, with the higher-end projects being funded by people other than myself (friends, crowdfunding, grants).

If you go on any crowdfunding site you’ll see optimistic people saying that they need $10,000 or less to create a game, even though they will have no involvement in the actual programming or design. They naively think that they will only need a couple hundred hours work, that everything will go smoothly and that they can successfully market it for free.

But think of it this way, even the smallest projects take 6 months to a year, and in that time you are paying the wages of skilled programmers and designers. Even if you have just two team members working full-time for three months, that could cost you $30,000 to $40,000 in wages alone.

This is why Triple A titles cost tens of millions, because they spend years creating a game that hundreds of people work on.

How Much Does it Cost to Setup a Gaming Company?

This answer can vary greatly. This issue here is that the creation of a company implies that you are hiring full-time staff, and that can get pricey.

The average salary for a programmer in the United States is around $85,000. You then have to hire artists, writers and a marketing team. You will also need to buy the equipment for them to work at, pay rent on the office in which they will be working, and to deal with costs ranging from hiring experienced lawyers to handle copyright and trademark issues (at the very least you will need to trademark and copyright your own stuff) cleaners to keep everything neat and tidy, and technicians to fix anything that goes wrong.

Then there are bonuses, health insurance, publishing costs. It all adds up, and it means that anyone looking to start their own gaming company without any skills of their own should make sure they have at least a few hundred thousand in the bank.

And that’s only assuming that you will hire fewer than 5 full-time staff and will work on small indie games. There is a reason that you see the same group of names on every Triple A title, because it takes a lot of money to build a company like that.


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