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Creating a business as a new indie studio

Ryan Keable shares a few tips and suggestions on starting a new business as a small indie team from his experience in starting Anomalous Interactive.

Ryan Keable, Blogger

April 24, 2011

19 Min Read

I'm Ryan Keable and I started in games development as a Game Designer for Pandemic Studios in 2009. After being a witness and victim to the spiralling decay of the Australian commercial games development industry I decided there was no better option than to carve out my own path and go Indie. I am not alone in this, many other Australian Developers have done the same for similar reasons; The Voxel Agents, Deviant Games and Halfbrick Studios.

Now I am co-director of a new studio out of Melbourne Australia, Anomalous Interactive and I am going to share with you the process we went through to create an independent game company and release our first game, Homemade Shooter. This article will focus primarily on starting up as a business, not as an enthusiast.

Starting your Company

I am going to assume this is what you want to do or you are already in the process of doing it, I’m not going to tell you why you should do it. To start a games company you are going to need  3 critical ingredients:

  • A product

  • Team mates

  • A Business Plan

Making a game

The first key ingredient is a product. There is no point setting yourself up to be a business if you do not have anything to sell. Start small, the key is to get a product out into the marketplace and establish yourself as well as start your cash flow. You are going to learn so much more by releasing a product than what I can tell you in a few sentences.

One thing to remember is that prototyping is key. You want to know how capable your game is early on and you want to get as much feedback on it early as you can. Build a prototype and show to friends, family and peers and let them tell you what they think. Take those ides and apply them further.

Prototype/Release comparison

From our prototype on the left we were able to see how fun the mechanic was and whether or not people reacted well to it.

There are many amazing articles out there about the do’s and don’ts of prototyping if you want more information.

Team Mates

I highly recommend not going into a venture like this alone. As a one man show you are limited to your own time, skills and ideas. Working with other people who can do things you cannot makes the development cycle a lot easier and quicker. For example, if you are an artist work with a programmer, wow now you can do twice as much as before! Working in a team also gives you the ability to bounce ideas off each other quickly rapidly increasing your ability as a business to iterate.

To find people start at uni or college, these people are your peers with the same interests as you and may end up in the same position as you. Network every chance you get, go to industry meet ups on a regular basis. In Melbourne I go to the IGDA Melbourne meet ups monthly and because of it I have a network of people I can contact for a variety of things I may need.

Finally while not always successful, partnerships can be beneficial in the long run if you need to start out cheaply. If you and your team start with a vested interest in your business then you can avoid the economic pitfalls of employment and contracting.

A Business Plan

A business plan is a lot of work, ours was over 10,000 words and I don’t even know if that's enough! Luckily, we were able to get schooled on our business plan via a free government program (more on that later).

You do not create a business plan for anyone else but yourself. I’m not to say its completely private and confidential, I’m saying that you do not create one to prove your capabilities to someone else, you do it because nothing will give you a better picture of what is required to run your game’s business.

The two most important things we took away from our business plan was understanding the value of market research and understanding the value of accounting.

Market Research

Market research is working out who you are selling too, what they are buying, and what the market place is like. Find your target markets and study them. If you want to make strategy games your target market will be people who play strategy games. Work out their motives, their wants and needs and make sure your game and the way you sell you game is appropriate to the research you collect. You should never stop researching, when you buy or play new games analyse what makes them successful or unsuccessful and there are always articles and reports coming out daily on the Internet.

Counting Money

You will need to understand what your money can and can’t do, it will affect everything. Like I said earlier, getting your first game out there is key because it will start your cash flow.

Money = Resources and Resources = Development.

Even when you are starting out with little or no money you MUST remember that the amount of time you spend developing a product will affect when you start seeing money. So yes, Time IS Money.

You MUST Budget. Budgeting is boring as bat shit to do, but NOTHING will give you a clearer idea of what it takes to run your business on an operational level. By projecting a budget you will work out your expenses and income over time and from that you can start to build a schedule, or see when you need to have a stable cash flow.

A key to keep in mind for budgeting is to understand your external factors and how they affect your income. Two examples we had to understand were:

  • The Australian Government requires us to report the 30% of revenue Apple takes as a business expenditure and this affects our taxation in a significant way.

  • The value of the Australian Dollar; the stronger it is the less money we make from the US market and this can have many knock on effects.

Be aware of what is available to you from your government. This will differ from Country to Country and state to state. We are able to be in business because we are part of an Australian government program called NEIS (this is the program that taught us about running a business!).

NEIS gives us personal income support for a full year and this is absolutely fantastic because we don’t need pay ourselves out of business so all money our business makes can go to the business. You may find in your area similar programs or other grants and systems that can provide your business with income, go look for them!

Creating a Business Model

When you combine your market research together with your accounting you get a Business Model. Know what you need to attack, how to attack it and what you can attack and make a strategy to execute your attack. Your strategy will tell you what you need to do in the immediate future and the long term.

Right now our business model is to focus on the iOS platform because from our evaluation it is the easiest market for Anomalous Interactive to break into even if it is the most competitive. The important thing is we know why and how we are doing it rather than just doing it because it seems like the best thing to do.

A few final thoughts...

  • Start cheap, there is no need to spend heavily to make your first game. We worked out of my lounge room for a couple of months before moving to an office

  • Get a cheap or free engine and always make sure there is room in your budget for the software and hardware you will need.

  • Utilize all the skills you have, do not throw money at external contractors because you think they can do a better job than you. Do the job yourself and pay for the polish when you can afford it.

There are so many other things to consider when starting a business and so much more detail to go into so do yourself a favour and go look into it. I covered market research briefly but on top of that there is also marketing itself! I might go over that next time (especially once I understand it more).  If you have any more questions hit me up at r[email protected], tweet us at @anoamlousint or join us at www.facebook.com/anomalousinteractive

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