How to Start a Game Development Studio
The mainstream media, including TV and Film, always paint video gamers as the minority of new tech consumers. But in contrast to this, Newzoo estimates that more than 2.69 billion global internet users played video games in 2020. At the same time, revenues in the game industry soared to $159.3 billion, with half of the market earnings emanating from the Asia-Pacific region.
These statistics show that the rise of gaming services, whether free or subscription-based is an important business for investors and enthusiasts who want to seize the opportunity. Even better, you can make more money if you know how to make your own game studio. But what does it take to get started with private game development? Here is a quick guide. Keep reading to learn more.
Must-Have Actions in Game Studio
Having an idea of how to start an indie game studio is one thing, but starting and keeping it going is different altogether. Here is what you’ll need besides an ambition to change the video game industry.
Find Unique Identity
Did you know that there are more than 5 million published video games in the industry? All these include all the popular racing, RPG, or even simulation games and their variations that you can think about. With this in mind, it will help if you take a unique approach, especially if you are going to make a name for yourself in the business of making games.
You should start thinking about how you want people to perceive your gaming studio. What difference is it bringing to the table? What problems are you trying to solve for the end user when starting a game studio? By answering these questions, you understand that finding a unique identity goes beyond naming or branding. It’s all about finding a unique selling proposition that solidifies your name as a game developer in the industry.
Find a Team
Finding a unique selling proposition is good. However, for a gaming studio setup, you’ll need talents with particular skills to bring your gaming ideas to fruition. Even if you are a good developer, you can’t overlook the benefits of using a talented team to build your first game. Fortunately, there are a plethora of options to explore, including:
A majority of game development studios employ an in-house department on a monthly payroll to create and launch game designs. This approach gives you an optimal team structure that can build in less time, thanks to enhances collaboration and increased staff turnover. At the same time, you get involved with the development process from the start to the end because you’ll be working under one roof.
However, an in-house development might not be a go-to option for studios that are just launching because it can be costly in the long haul. This is especially if you have to retain specialized talents who charge top-dollar rates for their services, on a monthly payroll. Also, overlying on in-house developers can slow down innovation and you might be unable to match or beat the competition.
Outsourcing game development service is an option for studios that want to bud fast and at a relatively affordable price. This approach entails working with a third party to help you design, build, and launch the game to your target audience. The third party can be an independent freelancer or offshore developer that works on specific phases of the project.
The best thing about outsourcing is that the model can blend seamlessly with your in-house department and work as its extension. You only need reliable real-time collaboration tools, as well as talents that are as dedicated to the course as you, to get it started and keep it going. Other benefits of this model include faster innovation, a universal fit, as well as access to huge talent pools of specialized experts.
R&D, whether onshore or offshore currently dominates the software and IT sectors when it comes to gaming development. Investing in an R&D center stimulates innovation, invention, and progressive growth. An R&D center empowers you to build gaming products that address the challenges faced by end-users, as well as match their expectations in terms of experience and usability.
Even better, talents working in R&D centers bring onboard powerful knowledge and insights that can help iterate on your existing processes to enhance efficiency and cut unnecessary development expenses.
Getting your finances in order is probably one of the most critical steps in the question of how to start a game studio. . Since building games might seem fun, you need to pay bills and live a pretty decent life, unless you are planning to do it as a side hustle. The biggest mistake that most developers make is starting with their savings. Well, it can sustain you for a while, but finding yourself in the ref line would be inevitable if no cash is flowing into the business.
That said, it will help if you have a healthy cash flow that leaves a positive value on your balance sheet every month. Once you have a reliable income flow, you can bow factor in your savings plus any other funding (it can be from friends or financial institutions) and calculate the survival period of your studio.
At the same time, it’s worth noting that prudent cutbacks, your initial investment amount notwithstanding will buy the studio more development time to ensure that you build a quality product that will recoup your investment without much hassle. If you are lucky and your game company starts generating revenue, look for an accountant to ensure that you can keep a professional track of every expense.
Make it Legal
Making your video game legal means more people can download and play it without your company getting flagged. It also gives you a soft landing spot when it comes to seeking grants and inviting other investors to make money alongside your game development department.
Fortunately, the legal structure of indie gaming studio setup is pretty straightforward, especially when launching it in the US. Moreover, it can be cost-effective if you find a trustworthy legal practitioner to help you maneuver the pitfalls.
Consult with an expert to find out how to make your own game studio and how much exactly you’ll need before embarking on this journey.
How Much Does It Cost to Start a Game Studio?
You already know how to start a game studio, but how much will it cost you upfront? Well, there is a basic overview of what you need to pay or spend when launching a game studio. However, these costs can be lower if you have some resources, such as hardware to start with, or know how to plan accordingly within a slim budget.
Nonetheless, here is what you’ll likely spend:
Initial Upfront Costs
You’ll need to pay an incorporation fee for your game studio before even delving deeper into other costs. This cost can be anywhere in the upward of $500, depending on location. You might also need to pay a separate legal fee to your attorney.
You’ll also need to budget for high-quality office equipment so that you can build in less time without much hassle. This equipment may include:
- Office PC (about $800 – $1500 per piece)
- Mouse and keyboard (about $20 per piece)
- Office chair ($50-$80 per piece)
- Office desk ($1000 per piece)
- Software licenses (up to $1,800)
Game development is a work in progress, and you’ll have to incur various ongoing expenses. These might include but are not limited to:
- Office & administrative expenses Monthly salaries (around $3,500 per member)
- Bank fees for the transactions Insurance fee
Other Costs for Setting Up a Game Development Studio
There are also other hidden costs of setting up a game development studio, including but not limited to:
- Workshops and events expenses
- Legal fees (about $3,000 per year)
- Music and in-game sound effects ($50 per music and $10/per sound effect)
- PR campaigns (up to $1,000 per campaign)
N/B: These costs are just a rough estimate.
Newxel is an experienced technology partner that can help you set up a game development studio, as well as hire specialized talents to work in the establishment. We offer turnkey services to our clients, meaning you won’t have to worry about negotiating the above-mentioned costs. We do it for you as you focus on strengthening your game brands.
We have helped several global clients set up game studios and R&D centers over the last few years. Here are some of the use cases that demonstrate our expertise in this field.
Game Development Studio
A popular game development studio wanted to set up a team of developers. The company reached out to Newxel, looking to hire 15 specialized talents in Unreal, Unity, Render, and VFX technologies. We successfully assembled a business-ready department within the tight deadline.
If you are interested in hiring such specialists, then, for example, in the Central European market, the average salary of one will be about $4,500 net. The figure may fluctuate depending on the country of employment, qualifications, and specialization of the developer.
A product company reaches out to Newxel, seeking to innovate faster with specialized talents in Unity, 3D design, and quality assurance. Our experts interviewed and assembled a team of 4 value-matched talents to fill in the position within 4 weeks.
The average rate per person on the project is $3000 net in Central Europe. Developers from Western Europe, the UK, and the US may cost you more.
Newxel experts helped a popular game publisher hire 11 specialized talents in mobile development, Node.js, Java, React, quality assurance automation, and 2D artistry technologies. We assembled a business-ready team for the client so that he could grow his business smoothly.
If you’re wondering about the rates, this is on average $3000 per specialist on such a project in Central Europe.
Another product company also reached out to Newxel, seeking to hire 4 specialists, including 2D/3D artists. We assembled the team for the client and negotiated their contracts.
The average rate per such a specialist on the project can be $3000 net in Central Europe.
You can check our other case studies:
- R&D Center for a World-known Game Publisher
- The Game Development Studio for Rage Quit Games
- Game Development Team for Mobile Gaming Company
Knowing how to start a game development studio is the first step in building an innovative product that can rake in millions, especially if you have a unique selling proposition. Leverage this guide today and make your video games dream a reality. Don’t hesitate to contact us if you want to hire dedicated specialists to work in your development studio or global R&D center.