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5 decisions to make when selecting the path for your game studio

Young game studios often get started by a bunch of friends gathering to make a game. This might lead to a real business, but more often does not. This post discusses the issues young studios should address when starting up.

After looking at around 1000 game teams original art by EJaw from all over the world submitting applications to the GameFounders program and having Skype interviews with half of them, it is safe to say we have some sort of an overview what is going on in the heads of young game developers. Often the studios "just happen" as a game idea comes along and a team is excited about it. There are no other considerations besides the game, so in many cases the game ends up with no proper monetisation and the team goes on to outsourcing work or just shuts down.

There is an easy way to avoid this situation, manage the expectations of all involved and make the everyday life of a young studio much easier. So what are the issues game developers should think about when launching a new studio. This is our take on the top 5:

1. Original IP or outsourcing. Does the studio want to do original IP or outsource work for other developers. Developing original IP requires time and money until the game is launched as outsourcing allows the team to get paid faster. Original IP can upon a successful launch make the studio a lot more money than outsourcing, where you can sell only the working hours of your team. Trying to do both is very common, but studios need to be aware that outsourcing can be a bit of a trap with new contracts coming in and less time remaining to build original IP. 

2. Indie or scaling up. Does the studio aim to make money or just build games they themselves like. These statements are not always mutually exclusive of course as there are lots of successful indie companies making money. At the same time scaling up is something better done on purpose and running a team with this purpose in mind is different than running an indie studio.

3. Blue or red ocean. Does the studio have a strategy to be successful in a space that is already crowded or will it select a niche or uncharted markets. Most of the developers these days develop for mobile as it is thea easiest and fastest way to get a game out. It is also the most crowded space there is. Carving out a niche of the mobile market or going for VR, AR or other new markets is an important issue to address when forming a strategy. There are plenty of categories, regions, target groups on the mobile market still underserved and waiting for quality games.

4. F2P or premium or ...  Which will be the business model of the games. It would make sense to be good at one business model since the game design between F2P and premium differs vastly. This is something to consider when building a team and also selecting partners and technologies to work with.

5. Publishers or investors.  Will the studio aim to work with publishers, investors or neither. Publishers look at games, investors look at teams. Going alone makes you the most money upon success, but if you do not have launch and marketing skills, it might make sense to learn that through working with a publisher. Both publishers and investors like teams that can show KPIs, but do you need them one you already have good KPIs.

As usually in life, there are no right and wrong answers here and all choices are acceptable. All studios have their unique characteristics and thus we only present issues and not solutions here. Thinking about the issues above will help a lot of studios to thrive.

 

GameFounders is a startup accelerator and pre-seed fund working exclusively with game studios. Established in 2012, GameFounders started its operations in a hub in Europe, Estonia and in 2015 expanded with opening a hub in Malaysia to cover Asia. GameFounders selects its portfolio studios from a global pool with applications from 75 countries so far. The best 10 teams move to the GameFounders hub for 3 months and go through a mentoring program giving them a boost to build their business. The teams will also have access to a wide array of partnership deals, small investment and a network of mentors. As of end 2015 GameFounders has made 38 investments in studios from 20 countries.
 
 
The picture used in the post is original art from a Ukrainian game studio EJaw (ejaw.net)
 

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