Common perception is that designing a game is glamorous but running business is robotic, inherently unethical and soul numbing. Common perception is wrong. Successful companies encourage their business side to flourish with the same creativity and passion seen in their games.

This is the first in a series of articles outlining the steps to build a successful game business. These steps provide business guidance for companies either at start-up or in transition. Though aimed at management, they encompass basic business principals that informed developers at all levels need to understand so they can make the best decisions for a company.

Part One: The People

The game industry has a higher than normal set of the right people in the wrong places. Creative people start game studios, often just out of college. While possessing a great deal of enthusiasm and talent, they rarely share the same desire for negotiation, operations, finance, management or operations. Often people at the top get shoved into roles they don’t want to do, or aren’t suited to do. In startups, the CEO is often the lead “something” at a company – a person with passion for designing, programming or art. This person is the idea or money person, though rarely is it someone who loves business. Business becomes the expedient for the expression of the creative side.

While a romantic, it’s a disastrous notion and an early death knell for a company. The CEO, corporate board and top executives must have the same passion for business as the devs have for games.

Take the CEO who would be far happier and the company better off as the company's Chief Strategy, or Creative Officer. Everyone knows at least one CTO, a position fundamentally about people, resource management and dollars and cents, who should be Chief Engine Architect, fundamentally about the code and design.

Boards are filled with founders, and don’t often draw on a vast pool of experience that exists outside the company. So they end up as giant rubber stamps or petulant micromanagers.

Studio executives are at best undereducated (at worst uninterested) in the operations, management or finance. Thus advice centers on immediate departmental needs rather than a holistic view of the company.

The top roles in game development and business design are very similar. Every game has a designer, publisher and leads. The designer is the visionary who can close their eyes and see the game. The publisher provides the resources to get the game out the door and a high level quality control. The leads are specialists guiding the people and process. Companies have parallel roles. The CEO equates to the designer, the publisher is the board of directors, and the leads are executives.

So the first step in creating a successful business is to make sure a company has the right roles and that they are filled with the right people.

The CEO As Business Designer

A CEO should adore the fine art of business, be passionate about their craft, living and breathing strategy, leadership, negotiation, finance, operations and management.

The best game designers adore playing a game of Risk for the 100 millionth time because see some new nuance of the rules they may be able to use. The best CEOs thumb their dog eared copy of The Definitive Drucker and catch that one traditional idea and re-apply it to their company with a new twist.

The best designers read comics keeping up on the popular taste, parse arcane roleplaying game rules just to see how they affect the gameplay, and/or surf the latest games on RealArcade to see what other designers are doing. The best CEOs scan through AdAge with a close eye on Neilsen’s new rating system and how it’s affecting game sales, review differing financial models to see how they could improve business and profits, and/or pick up the latest Harvard Business Review to see how the army’s new “idea-as-currency” system works.

Think of it this way no one would never move lead audio engineer to lead artist or lead programmer. The skill set isn’t the same. The temperament isn’t the same. Nor is the passion. The same is true with a CEO. Her or his main focus and desire must be business design, not game design.

And yet the game industry is filled with CEOs who are unhappy designers, programmers or producers stuck in the role of running the whole shebang. Topping this is a fear among top management of losing control when moving people around. The results can be disastrous.

One example of how this plays out is first publishing deals. The story of poorly crafted first publishing deals is so common in the industry; it is almost taken as fact that all first deals have to be horrible for the developer. The result is that a company comes out with a successful first game, the company reaps little rewards, and is forced to take whatever comes along thus perpetuating a downward spiral. A great businessperson lives and breaths negotiation as a great designer intuitively understands gameplay algorithms. They catch that one clause in the contract that allows additional post production marketing to be taken from net totals. And it is instinctual for them to review each potential publisher’s profit and loss sheets for the last three years. And a great businessperson is not blinded by the need to make a game and understands that saying no to this deal may be the best way of getting that deal.