How Not to Get into the Game Business
Steve Cole writes:
I constantly see things on industry mailing lists and in my Email where people want advice on entering the game business. The best advice I have is my free book which you can find at www.StarFleetGames.com/book as a nice multi-chapter PDF.
In one recent case, an individual wrote to say: "I just lost my job and have decided to be a game designer for a living. I need a stable income of $4,000 a month. How long would it take me to get there? Three months? Six?"
I laughed and cried at the same time. For one thing, I don't make $4,000 a month now and I've been in the industry over 30 years. (A few years I have made that much, barely, but not in the current market.) The sad fact is that except for the lucky three or four, game designers won't ever make that much. Worse, you probably cannot make a living as an independent game designer at all, since game publishing companies were (99% of the time) created to publish the owner's games because no other company would publish them.
In another case from some time ago (I'm going to blur some facts here so that nobody can tell who I'm talking about), a young game enthusiast decided to quit his day job and focus his full time efforts on game design and publishing. His wife said that she would allow this only if he "brought home" a paycheck of a defined amount each month. He had some money from an inheritance which was separate property and his wife allowed that he could use this. Well, he went through the nest egg, borrowed money from savings without telling his wife, maxed out the credit card he got for the business, and then got two more cards (those offers in the mail) without telling his wife and maxed them out. All the time (his company lasted 18 months and did a dozen products) he was "bringing home" the required paycheck. His company was making a profit beyond expenses, but not enough to cover the paycheck, but the paycheck continued because (a) his wife insisted and (b) he was sure he would start making more sales any time. One of the credit cards was a $5,000 cash advance spent on advertising (which produced few if any new sales). Every month, he wrote that paycheck but came up short elsewhere. He had established credit with the printers and with the companies that sold him advertising pages so he ended up deeply in debt to the printer and to advertising publishers. Worse, his first product (which sold well enough) ran out of print, but it was going to cost $20K to reprint it and the dwindling rate of sales (nowhere near as good as it had been 18 months earlier) would not support the debt load, but he "had" to reprint it to avoid looking like a company on the way out. Finally, with no more places to borrow money and creditors threatening legal action, he took the case to his wife for a home equity loan. She, of course, had no clue that his company was $40K in debt (for which he was personally liable) or that most of the family savings account was gone. It's a wonder she didn't kill him or leave him, but she did force him out of the game business immediately. He sold out for what he could get and applied that money to the debts. Moral of the story, if you are married, make your wife a part of every business decision and do not keep secrets from her about family money.
In another case (actually, there are four or five of these I have seen, all about the same), an enthusiastic game designer who knew nothing about the industry but was sure his game was the next big thing got a home equity loan, printed thousands of copies of his game, and THEN (and only then) asked other game companies how to contact stores and wholesalers to sell his game. He had no clue what size the market was (few games sell over a couple of thousand copies) or who the wholesalers were or what it would take to get them to buy (some now demand that you pay them $500 for advertising before they will carry your game) or even what the discount structure was (which meant that his cost per game was fairly close to the 40% of the retail price he had printed on the games). Moral of the story, learn as much as you can about the industry before you spend a dime getting into it. GO READ MY BOOK FIRST.
I see lots of gamers who think that running a retail store, and on-line discount store, or a game publishing company involves low work and high reward. It does not. If it did, a lot more people would be in this business.
I constantly see things on industry mailing lists and in my Email where people want advice on entering the game business. The best advice I have is my free book which you can find at www.StarFleetGames.com/book as a nice multi-chapter PDF.
In one recent case, an individual wrote to say: "I just lost my job and have decided to be a game designer for a living. I need a stable income of $4,000 a month. How long would it take me to get there? Three months? Six?"
I laughed and cried at the same time. For one thing, I don't make $4,000 a month now and I've been in the industry over 30 years. (A few years I have made that much, barely, but not in the current market.) The sad fact is that except for the lucky three or four, game designers won't ever make that much. Worse, you probably cannot make a living as an independent game designer at all, since game publishing companies were (99% of the time) created to publish the owner's games because no other company would publish them.
In another case from some time ago (I'm going to blur some facts here so that nobody can tell who I'm talking about), a young game enthusiast decided to quit his day job and focus his full time efforts on game design and publishing. His wife said that she would allow this only if he "brought home" a paycheck of a defined amount each month. He had some money from an inheritance which was separate property and his wife allowed that he could use this. Well, he went through the nest egg, borrowed money from savings without telling his wife, maxed out the credit card he got for the business, and then got two more cards (those offers in the mail) without telling his wife and maxed them out. All the time (his company lasted 18 months and did a dozen products) he was "bringing home" the required paycheck. His company was making a profit beyond expenses, but not enough to cover the paycheck, but the paycheck continued because (a) his wife insisted and (b) he was sure he would start making more sales any time. One of the credit cards was a $5,000 cash advance spent on advertising (which produced few if any new sales). Every month, he wrote that paycheck but came up short elsewhere. He had established credit with the printers and with the companies that sold him advertising pages so he ended up deeply in debt to the printer and to advertising publishers. Worse, his first product (which sold well enough) ran out of print, but it was going to cost $20K to reprint it and the dwindling rate of sales (nowhere near as good as it had been 18 months earlier) would not support the debt load, but he "had" to reprint it to avoid looking like a company on the way out. Finally, with no more places to borrow money and creditors threatening legal action, he took the case to his wife for a home equity loan. She, of course, had no clue that his company was $40K in debt (for which he was personally liable) or that most of the family savings account was gone. It's a wonder she didn't kill him or leave him, but she did force him out of the game business immediately. He sold out for what he could get and applied that money to the debts. Moral of the story, if you are married, make your wife a part of every business decision and do not keep secrets from her about family money.
In another case (actually, there are four or five of these I have seen, all about the same), an enthusiastic game designer who knew nothing about the industry but was sure his game was the next big thing got a home equity loan, printed thousands of copies of his game, and THEN (and only then) asked other game companies how to contact stores and wholesalers to sell his game. He had no clue what size the market was (few games sell over a couple of thousand copies) or who the wholesalers were or what it would take to get them to buy (some now demand that you pay them $500 for advertising before they will carry your game) or even what the discount structure was (which meant that his cost per game was fairly close to the 40% of the retail price he had printed on the games). Moral of the story, learn as much as you can about the industry before you spend a dime getting into it. GO READ MY BOOK FIRST.
I see lots of gamers who think that running a retail store, and on-line discount store, or a game publishing company involves low work and high reward. It does not. If it did, a lot more people would be in this business.
posted by Federation Commander at 7:23 PM
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