|
|
 |
 |
 | | | | |
 |
|||
 |
||||||
          |
 |
 |
||||
|
Ask
Mary-Margaret:
What kind of profit margins do game developers expect? Can a small company really be profitable? -Wannabe Profitable in Portland Yes and no. If you're talking straight "Dev and Pub" deals, well, I've never seen a developer be genuinely and comfortably profitable on just that kind of game deals. Usually they are pretty much living from milestone to milestone, without much money in the company war chest in case of problems. But it doesn't have to be that way. One development studio that I really respect does "Dev and Pubs" as well as business-to-business web and multimedia projects to offset the risks of each type of work, and has investment money as well. I think they've come up with the best way of achieving stability that I've ever seen. The reality is that most dedicated game studios don't make a substantial profit until they've been purchased by a larger company. Not many games actually "earn out" and pay royalties or make a profit within their publisher-funded milestone payments, which is why acquisition is usually the ultimate goal of a small developer. Another goal of a small developer is to be independently funded, so they can do their own original titles without the oversight of a publisher's external producer. Once a developer has enough of a track record to get investment funding, or has built up a war chest from previous projects, they can take on the risks of building speculative projects and the commensurately greater rewards. I have heard of developers being very successful by completing a project entirely and then selling the distribution rights either to a single worldwide publisher or individually to smaller publishers around the world, using a distribution broker. In any case, if you're a small developer, you really do have to plan for the worst. Most games that go into design or production phase get cancelled before they're even published. You have to be ready to survive that kind of downturn. Paul Kohler, one of the best business agents in the game industry, believes that a developer can't really achieve financial stability until they have at least three simultaneous projects in development. I agree with Paul on this… it's very hard to maintain stability if you're a small studio with only one or two projects. ________________________________________________________ |
|
|
Features
