How to Create a Mobile Game Company

A variation of this post exists at http://www.furzymarketing.com/how-to-create-app-company.

Mobile gaming is about to become the most profitable sector of the gaming industry, outstripping online gaming, PC gaming, and console gaming within the next year. Unlike the housing marketing in 2008, mobile gaming isn’t just riding a bubble that’s eventually going to burst. As more and more people acquire smartphones and tablets and fewer and fewer are willing to pay upwards of $80 for a PC or console game, mobile gaming is only going to be more and more popular.

If you have an idea for a mobile game or know someone else who does and you’re ready to start your mobile game company and get in on those profits, here’s what you need to know.

Picking the Right Entity for Your Mobile Game Company

Which entity you choose affects how liable you are for any wrongdoings or mishaps that occur within your company and with your mobile game, as well as how you are taxed. There are essentially four different types of company you could be, called “business entities.” These are: sole proprietorship, general partnership, limited liability company (LLC), and a corporation.

A sole proprietorship means that you own the business yourself. It has a limited duration and because you are the only owner, you are also the only person with liability, but there are no fees associated with creating this kind of company.

A general partnership is essentially a sole proprietorship, but more than one person owns the company. That means more than one person has liability and the ability to raise capital is reduced (no shareholders or board), but there are no fees or papers to sign.

A corporation is legally separate from those who own it. They have limited liability and ownership can be sold to someone else in the future. However, taxes are higher and there are some serious formalities associated with setting up a corporation.

A LLC takes the best aspects of a corporation and combines them with the best aspects of having a partnership. The liability is limited, the company can be sold, it’s easier to raise capital through investments or selling stock, and the duration is not limited. There are, however, fees for setting up an LLC.

Writing Your Mobile Game Company’s Business Agreement

The next step of the process is to write a business agreement. This document is necessary for sole proprietorships, as well as partnerships, LLCs, and corporations. LLCs and corporations generally have two agreements, these being the articles of incorporation or organization and the bylaws or the operating agreement. In short, these documents dictate how the business will be set up and how it will be run.

Most include information about business, such as who owns it (the partners, members, etc.), how profits and loss will be allocated, where contributions are coming from and who is contributing how much, how meetings will be conducted, how voting will take place, who has the right to vote on decisions, the rights of the owners or managers, how or when the business can be dissolved, sold, and how a partner can be bought out.

Hiring Your Mobile Game Developer

One the business entity has been chosen and the agreement is in place, you will need to hire a developer for your mobile game. Your primary goal during this process should be to prevent your game’s design and ideas from being stolen, as well as actually having your game designed and produced.

While many companies believe they can outsource this task overseas inexpensively, it is very difficult to control what happens to your ideas once they are sent abroad. Even if you have that individual sign a non-disclosure agreement and a contract, you may have few avenues for recourse if they betray those agreements. Additionally, when it comes to mobile game development, picking an inexpensive developer just because his rates are lower usually means you will get a lower-quality game.

Have your NDAs and contracts prepared. Research your developer even before you reach out and enquire about whether or not they could take on your project. Consider hiring an attorney to help you generate NDAs and contracts that can actually protect your ideas and your game.

With this foundation, you’ll have all the ingredients you need for a successful mobile game company!

Jovan Johnson is a California licensed attorney who focuses on SEO, mobile games, and apps. He is passionate about mentoring students and steering dollars to scholarships, and speaks regularly about career opportunities. He is a principal at Johnson Moo, Furzy, Paymaster.Co, and 320 Instrumentals.