Business Rongkai Guo
Game Business? • Having experiences with a big game company is always great! • How many of you did think about working as an individual game designer? • What you need to do as a junior/senior game design college student?
Business Plan • A business plan is needed BEFORE you start doing anything! • Summarize the outline of your plan – objective of a resume • Business description • Current landscape of the game industry as a whole • Be specific about your industry, like mobile game • Detail where you think for the next 5-10 years and where you hope your game business will stand • How to market your game business – strengths and weakness of your competition • How to manage your business – manage your finances in the first two years of your business
Legal • Operating your business without any legal protection could be costly • Crooked developers • Individual – Assets, outsource, etc. • Partnership – Protect your debts and other liabilities, form a LLC. (limited liability company) • In US – There is a place called IRS
Business Plan for Independent Game Ventures • Average cost for producing a computer game: millions of dollars per title • How does an independent producer get the money to create the game? • Talking to industry people • Pitch your idea to local business • Conferences like SIEGE investors’ Panel • But, what to say?
Make Yourself Ready • A good gaming concept • A good prototype to demo • Know how to communicate with people (listen is part of this) • **A well-written business plan
Game is the Most Difficult • Very hard for an independent gaming project to get financed, why? • Very few titles ever make their costs back • Very few projects ever make it to the shelf • But, that was few years ago. • We have more shelves now. Google play, Apple App Store, Steam…
What are the Investors Looking For? • Most common misunderstanding • Investors are not looking for an interesting game concept • They are looking for money as well, like us. • The project will give their investment back is the one they are looking • Risky is acceptable
What should be included? • Background Data • Executive Summary • Distribution • Costs • Quantitative Demonstration • **Package
Background Data • This part is the source of supporting all of your financial and strategic assumptions • Good reference can satisfy a skeptical investor • A secondary report • Study • Survey • Business case study • This data might support why your project will succeed in the future sections of the business plan
Executive Summary • Usually, this is the section will be read by everyone who looks at your business plan • It has to be impressive • Don’t be afraid of repeating yourself here. Not everyone will have time to read through your plan. • The executive summary should reiterate the most crucial points from each section • Funds sought paragraph should be the final one in this section – how much money you need and what the return on investment will be • Write this section last
Funds Sought Example • The Company anticipates one round of financing with $1.5 million being sought from a single investor in return for passive equity. These funds will be utilized for start-up expenses in addition to production, staffing, distribution and marketing costs related to " Your Game Title Here ."
Distribution • In the game business, distribution is KING • Describe your distribution strategy is the key to a game business plan • Choose vendors vs do-it-yourself • Big distributors want financial backer • Do-it-yourself requires you to find a reliable marketing and distribution partners. Make sure you include his/her bios, resumes in the plan.
Costs • Like what you did at the beginning of the semester • Estimations • Period • Cost of crews • All based on launch day
Quantitative Demonstration • Business people are usually sensitive to those “numbers” (money) • Game titles live and die by the number of units sold • The easiest way to create reasonable financials is to create scenarios of what the world might be as the product is being developed and launched. • Calculate your financials based on worst case, middle case and best case scenarios. • Consider various market traend scenarios – New console launch boost game unit sales? • The background data will be support for the estimations here
The Package • A lot of people didn’t realize how important the package is. • Horribly packaged or no package will tremendously decrease the chance of getting funded. • Diagrams, character, environment sketches will make the plan easier to read, but only when they are well laid out, organized and bound.
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