How to Start a Games Development Studio – Part 2: the Business Side

My last blog article looked at the creative side and if you’ve not read it yet, I’d suggest starting there. Now let’s look at the business side of starting a games studio. Again note; neither is an exhaustive list of all the issues nor a fool-proof guide to making games. Making games requires lots of hard work, but the pay-off of seeing people having fun with your creation is often worth it.

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My last blog article looked at the creative side and if you’ve not read it yet, I’d suggest starting there. Now let’s look at the business side of starting a games studio. Again note; neither is an exhaustive list of all the issues nor a fool-proof guide to making games. Making games requires lots of hard work, but the pay-off of seeing people having fun with your creation is often worth it.

The first point I should make here is about games as a business; running any business is very challenging and ultimately the time spent administering it is time not spent making games, but still an essential requirement. If you’re in a position that you don’t need to make games for money, then make them for the pleasure of creation. There are mod scenes and open source development groups doing just that – might it be right for you to concentrate on the fun creative bit and treat it as a hobby?

Even if you want to do this as a business, it might be worth spending a little time making games as a hobby first to get a vibe for the work before you spend any of your own money on such a venture. Better that you spend a little money buying a copy of LittleBigPlanet 2 to make a game in there to discover if development is right for you, than to you tell your boss where to shove it and leave your job to make millions in gaming only to discover that the version in your head of what it is like to make games is not what the reality turns out to be…


If you are going to make a business of it then you need a vision for what sort of a games business you wish to run. There is an old adage that goes; cheap, quality, fast – pick two. I think it applies to a games studio too. You can make games quickly and for not much money, but they won’t be the best quality. You can make amazing quality games but they take many more resources to produce and so cost more. There is nothing wrong with playing the numbers game of trying to get lots of titles out there. The developer behind Angry Birds made 52 games before they had a huge hit. What is important is that all involved know what sort of a studio you are and what sort of a vision to have.

Now let’s talk investment. Making a game from scratch is going to take anything from 2 months for a simple title to over a year for a more complex one. During that time you and your team still need to eat and pay the bills. What costs you need to plan for are the cost of your time plus the equipment needed to make the game, and also a budget for marketing. Don’t be tempted to think that the quality of the game alone will sell itself. It might if you are very lucky, but with hundreds of apps being released per day, standing out from the crowd is hard. Even for a simple title I think you need at least a budget of $5000 to use for ads and other marketing activity. This area is vital to the success of any new game and needs more space to talk about it than I can put in this article. Suffice to say it needs serious consideration and is as important as the development itself.

You can work on the game during your spare time while you earn a living, but my experience is that if you are trying to make a business and not do it just as a hobby, the energy drain of doing your normal work on top of the new venture soon takes its toll and development will drop off. Not only that, but if your new venture is going to be your income, you will take it much more seriously. That means you need some money to bankroll the project.

Fortunately, unlike many other businesses, making games has few capital costs. All you need is a computer each, some development software and a few other bits (for example, it’s $100 per year for an Apple iOS developer licence). Compare that to the cost of setting up a restaurant and you’ll see what I mean. The biggest cost is how to pay yourselves while you make the game. Before you embark on this venture you also need to get your personal costs down to a minimum; what do you need beyond food and shelter? What is a luxury you can do without? Even if you’ve got the money to bankroll you for what you plan to be the development time, things don’t always go according to plan and you may need room to manoeuvre.


You can simply save the money up so you’ve got some capital before you quit your job. You can try to raise investment from sites like IndieGoGo. You can also make your first project something that earns you a little money or look for grants to help you start. For example, I’m helping to produce a panel at the Develop conference in the UK where an organisation called the Wellcome Trust is giving away grants for games ideas that engage people in the topic of biomedical sciences.

You can also look to start as developers for hire; making games for publishers to earn money. You still need the creativity and ideas we talked about, but here you’re putting those in the service of somebody else. This can mean either pitching games ideas around existing Intellectual Property (IP) as we did with Star Wars: The Battle for Hoth or pitching new ideas to publishers hoping they will fund them (as we did with Savage Moon). Both are hard work and firstly you need the contacts with publishers as I doubt you’d get anywhere simply sending in your ideas to them. You need face-to-face meetings where you can pitch ideas, and even then as a minimum you need an outline design for the idea/s (about one page of text) and a short video (10+ seconds) showing what the final game might look like. Some publishers ask more, such as a demo or concept art. Remember, they have lots of developers looking to get them to fund their games, so you’ve got to stand out from this crowd.

You can meet publishers as events like E3, Gamescom or Develop. It costs to get a pass to be able to go into the business areas of the show (often over $1000), but given this might lead to a $100,000 contact, it can be worth it. Once inside you need to do lots of networking, as most publishers will not allow you in to their private booths without an appointment. One method is to attend talks where representatives of publishers are speaking, then congratulate them after on a great session and ask if you can pitch to them and if not who is the best person to speak to. Another is to keep looking at everyone’s’ ID badges and if you spot that the person in the queue for coffee with you is from a publisher, strike up a conversation. You need to be doing lots of schmoozing and chatting, and it’s not a skill everyone has, so if you’ve not got it and you want to go down this route then you need to get somebody in your team who has. And it does work; we got our contracts with Sony for the first games studio I was involved with from just such means.


I should also mention social media here; things like Twitter and LinkedIn are a great means of networking and you should use them, however they only really complement the face-to-face networking, so note that you can’t do all of it from behind a PC screen.

By now you should have an idea of how to get fellow developers to work with you, generate ideas that will become hit games, a strategy of how you are going to run this games studio of yours, and thoughts about how you’re going to get the money to run it. My final point then is that I hope it works out for you. Yes it means I’ll be in competition with you, but great games are great games and one day I hope to be playing a title you’ve created and thinking, ‘Wow, I wish I’d thought of that!’

Tomas Rawlings is a games designer and consultant. He co-founded Red Wasp Design and is Creative Director at Auroch Digital. He is currently producing amongst other things, a panel at the Develop Conference in the UK where you can find out more about making games.