I've worked for a few video game 'startups' that tanked or are in the process of tanking. Here are some pitfalls to avoid:

* Make sure you focus on the company aspect of things. Why are you making games? If the answer isn't 'to make money' you're doing it wrong - make them as a hobby instead. Starting a video game company because you have great game ideas, or because making games is something you love to do is a bad, bad idea. The reason for this is that at the end of the day, if you don't focus on the financial aspect of things, your company.will.fail. Most game companies fail because they're living month to month off of publisher's paychecks without trying to establish revenue streams of their own (other than royalties).

* Speaking of royalties. If you're getting funding through a video game publisher, make sure you understand how the payout will happen, how your advance is being payed off, etc. You probably won't have much negotiating power here, and this isn't really a route I'd recommend unless you _really_ need the funding.

* Start small, don't try to make a game engine right out of the gate. Put something simple together and iterate on it. If it turns out you're making a lot of the same type of game over and over, then think about abstracting an engine out of it.

* Reconcile the awesome game that's in your head, with the awesome game you can make given the time and resources available. Don't overcommit, you'll just end up implicitly cutting features instead of explicitly cutting them, and the game will suffer.

* Don't forget about the importance of marketing and timing. Great games fail _all the time_ because they weren't marketed well, or because they released and then got buried by the latest AAA or hyped up title.

A friend and I quit our jobs to start a mobile game company. The toughest things are we have to work like crazy to meet self-imposed deadlines and deal with a bunch of non-programming related issues like marketing and distribution.

Mobile games are the easiest to get into (since you can rely on the app distribution models from Apple, Google, and Microsoft) and you don't need to think too much about cramming your software into a box.

Our game is called Bouncy Mouse, and we're about to release our first major update with new content and new game modes. We've got over 1 million downloads on Android, but fewer on iOS since discoverability on iTunes is difficult due to major companies buying their way into the top spots through ads and promotions. Competing on iOS is hard primarily due to this reason, though Apple did feature us for a week or two, which was great.

The classic gaming market is still huge and healthy. I would like to branch out into that market once we have some more resources (e.g. once we're larger than two people and have a little cash to finance bigger budget art, music, design, etc.)

You can check out our website here. :) http://www.bouncymousegame.com/

So did you guys save a bunch of money before quitting and are hoping it succeeds or do you have outside funding?

Also, what avenues of marketing are you using?

We saved some money before quitting. We're staying with friends (paying rent) to save costs on housing. But we live in SF, so it's still pretty expensive. In the Mission, you can get tacos for cheap, and, hey, they're pretty good. :)

For marketing – not much. Relying on blogs, forums, word of mouth, featured promotions in the App Store and in Android Market (and in Windows Phone 7). We bought a few ads, but they weren't super effective. Focusing on marketing is something we will do for our next game, but since we're strapped for cash it's hard to compete with the social farming gaming behemoths in terms of climbing the ranks through advertising.

Your game looks really nice ! Maybe the next angry birds ? :-)

Thanks! We get that comment a lot. I love Angry Birds, while basic, and I'm glad it's bringing gaming to the masses. The more people playing mobile games the larger the market for us!

I remember seeing your app either featured in the Apple App Store or being in a Top 100 list on it.

Great! Apple featured us for a while and it really helped. We soon dropped from the ranks since we can't afford to pump money into advertising like the other mobile game behemoths can. We are releasing the free version and an expansion pack soon, so we hope to reach more users this way!

1 million Android downloads - but how are you doing financially?

Over 1 million. ;)

Great for two people. Not enough for much more. Let's see what happens after we release additional content, in-app purchases, and another game! We have some tricks up our sleeves and we love making our players happy.

We have an ad in the free Android version that users can remove by completing an in-app purchase for 99 cents. So we make a little bit of money from each Android user.

I hope we keep pleasing our users and making more money so we can build more great games.

Congratulations! I wish you'll be able to do that.

I and my partner started Naught Dog, Inc. from scratch (some various articles I've written on this here http://all-things-andy-gavin.com/video-games/). We went from 2 (us) to well over 100 employees. Building from bigger and bigger game one at a time. But we started in a much easier era (the 80s).

I loved Crash Bandicoot when I was younger. Thank you for making something that I will remember and relate to my youth.

I'd be interested to know your take on what made the 80s an easier era to start in. Is it mainly that the field is more competitive now than it used to be, or are there other factors as well?

A number of factors. Games were much smaller then and a competitive game could be done in 1-2 years by 2-4 people. The budgets were usually in the 5 digits. This made it much easier to do if you knew how. On the flip side, far fewer people had any programming expertise.

Now, it's possible to do something similar on the web, or with a cheap mobile game, but in console gaming (PS3, 360 etc) the games all run in the 8 digits (over $10,000,000!) and involve big teams, often over 100 people.

I'm a video game producer that has published on basically every modern platform. The best advice I can give is to laser-focus on your core mechanic, always asking yourself "Does this add to the fun?" Everything else follows from that.

Different platforms have different customers, demand different games, and have different challenges. For a small project, I highly suggest using a sophisticated and cheap multiplatform middleware engine like Unity3D. It allows you to quickly and easily iterate without worrying about coding new technology.

If you are looking for funding on a small project, I suggest something like Kickstarter. Heads up, unless your project has a sophisticated online component the biggest money sink is going to be your art. If you can a) get users to generate the assets, b) generate the assets programmatically, or c) use an aesthetic that revels in its own lo-fi chic you will have cut your costs dramatically.

The biggest hurdle will be your own enthusiasm. For a small project, keep the scope small. Check out flOw and World Of Goo to get an idea of what I mean by "small."

The best way to find something that is both new and fun is to experiment. Come up with wacky ideas for mechanics and build really ugly prototypes. When you have an ugly piece of unstable software that manages to enthrall its players despite itself THAT'S when you move forward.

I'd like to contact you to talk about business, could you send me some contact info via the info in my profile?

This is a bit off-topic, but only because some of the comments made here are making me wonder about Unity3D.

A while ago, I kept hearing a lot about Unity3D while talking with teams around the DC-NY area. So I looked into it, and made a small game mayself, just research - non-commercial, to see if it was as useful as everyone claimed. Everything they said was true, I was able to get a simple game done in a weekend. BUT, that was without leaderboards, or even scoring, or social tie-ins or ANYTHING other than the simple mechanic and even simpler graphics.

Haven't touched it since...

I would be curious to know, from anyone who uses Unity to make real games, how long does it take you to put out a game with Unity? And once you are using it...isn't it a little difficult to switch to something else if you want to produce a larger project? Or does it work fine for larger projects as well?

Basically just wondering what are people's impressions of using Unity?

I've closely followed the development and rise of Unity3D for the last four years and now i'm planning to do ALL my future 3D related projects with it, because it streamlines and simplifies the whole cross platform(PC, MAC, iOS, Android...) development process. There are of course drawbacks.

It is not that convenient to work with larger teams on the same project and documentation on how to do that is sparse.

It has been done however, even EA has adopted the engine for a few projects (Tiger Woods Online) and there are whole MMOs built with it.

As more and more larger companys start to use it, the focus of the developers behind Unity will shift to all those Team issues.

The pricing and license agreement is VERY competitive and they are having sales every few month.

Qualcomm even released their Augmented Reality Platform as a Unity Package which I currently use to do some projects with.

Overall i think its the best middleware package for indies and mid-size companys today.

I am not a gamedev but I am currently building what some would consider to be a large game[1]. It has been amazing to work in as it streamlines the development process massively. I have only spent about 20 hours with it so far and if I had chosen another engine I would not have progressed this fast.

You should take another look at Unity when v3.5 launches - they have made some advancements and fixes that are targeted for larger projects[2]. I can't wait for a better gui system and native lod support!

As for the negatives, so far I have only found the documentation to be lacking on some fronts (specifically regarding the terrain engine).

[1] http://trailsgame.com/

[2] http://www.marketwire.com/press-release/Unite-11-Unity-35-De...

I have a friend with an XNA community game in the store. He's so disgusted with the garbage that goes on to get games to rank in the store that I think he's pretty much given up. I don't see that as a viable option to make money unless you do a lot of promotion work outside the store. It could still be a nice showcase of your work though.

I met someone this weekend that works for a small game studio that's exiting the Wii market. He said it's just becoming impossible unless you're one of the big guys. They've already exited XBox and PS3 so Wii was the last console left for them. They're now mostly targeting PC and Mac.

Steam certainly makes it easier to sell an indie game right now. Notch (of Minecraft fame) has a breakdown on why they don't use it though: http://notch.tumblr.com/post/9550850116/why-no-steam-notch

Mobile seems easy to break into but it's a crowded market. You've got big budget games crushing you from above and a flood of crappy clones on the low end. I'm still awefully tempted and I'm trying to pull together a couple mobile game concepts myself.

I've been a fan of Llamasoft for years. They're an indie shop of two coders, releasing games since the early-1980's. More recently they created Neon, the music light-synth on the Xbox 360, Space Giraffe on XBLA, Gridrunner Revolution on Windows, and are currently making iOS games (GoatUp, Deflex, Minotron: 2112, and Minotaur Rescue).

They were not pleased with XBLA. Their game, Space Giraffe, got hammered by a particularly bad reviewer (employed at the official Xbox Mag, no less). The game is actually quite good, albeit extremely hard, and has been praised by the creator of Braid. Microsoft did't seem to care about them at all (at least that's what I think happened), so they went elsewhere.

What they've done is focused on a niche. Most of Llamasoft's games are mash-ups of games from the 1980's, usually with lots of crazy graphical effects, and lots of goats, sheep, llama's, oxen, and various other beasties. Gameplay design is among the best I've ever experienced in twitch-based games. There's a loyal following of customers who love their games and support them, helping Llamasoft sustain themselves.

They're not super-rich, but have been chugging along for a while. I think they're excited about iOS because they're indie, and it's very easy for them to release games on it. Marketing and getting the word out is definitely their biggest challenge. Currently, it seems their goal is to release a new iOS game every 2-3 months, and build up a catalog of games. Once one of them is a hit, it'll bring in more customers, who will be interested in their back-catelog.

GoatUp, which just released to great reviews, might be that ticket (check it out: http://itunes.apple.com/us/app/goatup/id462286820?mt=8).

You can always ask them directly about their experiences. They've been on XBLA, Steam, iTunes, and a lot of other platforms in the past. Sign up at www.yakyak.org, and ask Yak or gilesgoat a question.

I apologize for the slightly tangential response but your post merits more than a POU (Plain Old Upvote).

30 years ago a C64 was My First Computer, a birthday present. Llamasoft's Attack of the Mutant Camels was my first game, swiftly followed by the insanely fast Gridrunner.

I cut my teeth on Commodore v2 BASIC and 6502 assembler. I turned down an early teens New Year's party (girls and everything...) to hack on an assembler monitor from Y64 magazine.

And I don't regret it.

Recognizing by chance something better in a local computer store I bought a copy of the Zeus assembler. The proprietor warned me "You know this isn't a game, right?".

I welded dodgy hardware into the underpowered expansion port, using telco engineer Dad's overpowered soldering gear. Despite the cost of the thing, nobody questioned that I might break it. A gift truly given.

I still have my copy of the C64 Programmer's Reference Guide (on the shelf behind me, next to Dad's copy of the KDF9 Algol Reference). I still have the 6502 opcodes in my head (LDA $A9). I'm saddened by the fact that I stupidly gave away my C64 many years ago. I'd love to see again the awful software that I wrote (transliterated from "Numerical Recipes") to help me with my high school physics homework :)

And I'd really like to see some pro code from that time.

> Sign up at www.yakyak.org

Done! Hard to quantify how much effect these guys' work has had on my life but it's certainly non-negligible. Hack on :)

/now playing: Rat's Monty Mole theme tune

That's an awesome story, you should definitely post it on YakYak. :)

Oh, and check out some of their new stuff I mentioned. Especially the iOS stuff as it's modeled after many games from the C64-era (you'll like them I bet): http://minotaurproject.co.uk/Minotaur/minotaurprj.php

What is success? Game companies are easy to start and frequent to close down.

Recommendation: Contract iPhone development or Android development. Get a decent but minimal app in the App Store using Unity or Cocos2d, and recruiters / devs will be falling over themselves to hire you.

Consoles are a really crappy market. The CEO of the console company I used to work for really wanted to get into mobile. That was before the company tanked due to publisher shenanigans.

My definition of success is to work on doing what I like full time while keeping the bills paid. Lots of people succeed in this. My hope is that a game company is a feasible route towards this goal.

Yeah consoles are rough, high cost of development, and high chance to get overlooked.

I'm surprised by the "30 or younger" criterion. When I started programming in the '80s I found writing games a much more accessible, profitable and rockstarish idea than I do now (although I never actually wrote anything marketable). Maybe that's about me rather than the market though.

I was being a bit conservative with my estimate, partially due to the environment I currently work in. I work in a pretty large IT shop where a shocking number of (older) adults don't play videogames at all and have never been interested in them. COBOL isn't dead here, if you can believe that.

Yes, there are many opportunities for you as indie developer. first is app store ofcource, but please read first stories from iphonedevsdk.com/forum business section about 6 months development and more then $5000 spending and $100 profit at end. Second is flash games market, you can get up to $20k per game from sponsors if you are experienced game developer or about $500 if you are unknown. Third is android market, same as ios market but less money(successful game apps more ads oriented then apps in apple marketplace)

Forget about desktop. Its really hard make money if you are novice. Start from from mobile(cocos2d as already suggested is good helper in your way)

Recently there was a video of indie game developpers that were living from their own games. You can see the video here : http://casualconnect.org/lectures/indie/diy-indie-game-dev-f...

I think there are more and more one/three people company making indie games and living off it partly from Steam and iPhone development. I hope you will be successful in your projects!

Thanks for the link and the encouragement!

I have worked in the games industry all my life, and also had my own game company. I am starting to think the industry is seriously broken in it's current form.

The main reason is that it is such a hit driven industry, which means that most companies live from hit to hit, until the moment they have a failure. At that point, most companies close down, as they can't afford a new production and may not be lucky enough to get a publisher deal early on.

The problem is that it is hit driven industry, and this is true no matter if you make AAA games like Gears of War or Halo, or if you make small iphone games or middle-sized games on Steam or XBLA. The sales numbers drop sharply as you move away from the top selling games and it is extremely hard to stay in the top for very long.

Publishers are essentially the VCs of the games industry, and have enough money to spread their risk, as they know 80% of their projects will fail.

Another problem with game production, is that you don't really need that many people early on, when you are still figuring out what game you are making. Then slowly as you enter production, you ramp up the time. This is also the same reason, that so many people are often laid off after a game comes out. There is no longer a need for all those people in the company.

What I think really needs to happen, is for games companies to become more like movie production companies, where a team is assembled as needed and can be dispersed with no hard feelings after the production. The production of a game, also becomes a much more measured risk this way.

I started a studio to develop video games. Its definitely not hard to get into at all. You just need the passion to complete a full game then release. The biggest thing to decide is which market you will choose, because some are better than others. I wouldn't choose the console market as the indie games on there struggle to get decent revenue. I love the mobile development choice because when your meeting new people and friends you can whip out your phone and show them on the spot. Its part of the reward of releasing a game.

When you release a game immediately start working on either promotion, features to improve the current game, or your next game. Do not do what I did and sit around looking over all of the numbers, that will disappoint you. Start thinking about the next game you can develop and expand upon what you learned from the previous project.

Once the feedback and numbers start coming in for the released game start tweaking it and release updates every other week until you are happy with the numbers and players stop requesting changes.

Don't count on your first product being a success.

Have reserves to handle a few less-than-break-even projects.

Have more than one idea.

Start simple.

Remember that you have to release a product every 2 months to make a living at mobile.

Never go into debt and your company can survive forever, even if you don't make a dime.

Make a code base you can reuse. Know who is going to buy your product.

Don't underprice.

Make sure your contracts always handle things like your publisher going out-of-business.

Only make products you believe in.

Don't finalize your company name / product name until after you have successfully registered the web domain.

Keep your fans talking with forums.

"Lore" is a super cheap way to make your game more interesting.

Be extra kind to the folks who aren't getting paid... yet.

Don't burn bridges... you never know.

What is hot today will be dead tomorrow, no exceptions.

Be sure to have a bloody good screenshot or nobody will buy it.

Find "movements", join them, take them over, make them yours.

Always innovate, never follow.

Notice targets of opportunity.

Polish, polish, polish.

Eventually, you have to ship or die.

Somebody has to be "the last word".

Better yet, don't do it.

I haven't started a videogame company, but I did look into it seriously at one point. What stopped me was the financials: it looked like I would have needed a fairly sizable hit (by the standards of the time: before the iPhone and AppStore) in order to cover my costs. The picture has changed quite a bit since then but my advice would still be to have a good think about the money before you take any irrevocable decisions.

In particular, figure out how many sales you'd need to cover your costs; then do some market size estimates to figure out whether it's realistic to hope for that many sales. Don't forget about cash-flow either because it may take a while for your game to start selling, sales may tail off quicker than you anticipate, etc. Use that info to help decide whether it's a risk you should take.

Good luck!

I personally know plenty of indie game successes so it's definitely doable.

Generally:

* Keep things small and focused.

* Make games, not game engines.

* Keep control of your revenue streams early on. Sell the game yourself and consider platforms such as Steam or XBLA bonuses. If you can't sustain yourself without those platforms you probably won't make it. Use that extra revenue for expansion of your studio or your ambition.

* Marketing and PR should be a primary focus, alongside game development.

* Scope scope scope. If you're first product is an MMO you'll fail. If you think your first few products will be able to compete with anything on a store shelf you'll fail. A good game with personality is not dependent on your underlying tech nor does it require novels of content. That's why many of the successful indies start with 2D games drenched with style. A good game is a good game.

Definitely consider Minecraft an exception although don't lose hope or anything, just be aware. Also, aiming for a AAA title requires a lot of manpower and time, games like these works similarly to big budget movies. A buddy of mine has connections in Sand Hill Road that actually funded some of his game projects and because XBL isn't that great, I hate to say a pretty good indie game didn't do so well. Really, it all depends on what you're shooting for but if you'd like advice on where to go, go mobile or go casual web (Facebook, you'd be surprised what people pay for these). There are tons of people that have been living off of social and mobile games during their peaks. With good marketing and a little lucky your game may end up well! Good luck!

There is a great (indi/student) game community in The Netherlands!

First company that comes to mind: http://www.vlambeer.com/ (they created super crate box; a free game) Check out their talk on it: http://vimeo.com/29423887

My advice -- just started doing this myself --

- don't overscope

- don't limit yourself to a platform (language, console/pc/mobile)

- don't be afraid to aggressively cut features

- don't ever think that you really know what will work

- do try things (lots of things)

- do make a great game

- do spend time studying games that sell on your platforms (business development)

- do write terrible code (if you're someone who knows the difference)

- do it fast

- do things that keep your morale up

The biggest hurdle is awareness. You need to market the shit out of your product or else no amount of spit & polish will save you from obscurity and dismal sales.

Most devs and artists hate marketing, but it's actually THE most important part of your business. If people don't know about you, they can't buy from you.

Have you successfully marketed a game? If so, what were some things that you did to market it? I see games in magazines and websites, and usually it's the AAA companies that get easy marketing no matter what they do, but often times when a small guy gets popular, I'm left wondering how he was discovered when a million others weren't.

In the indie scene, doing well in a competition like Indiecade can provide a pretty big boost. That's mainly for a certain kind of game, though, more or less "one that other indie developers will find interesting". Some sort of innovative mechanic or new take on a genre is probably the most common route on that. If you do have that style of game, any other way of meeting other devs (forums, game jams, etc.) can also help spread the word; there are few things devs like more than talking about other cool games they recently heard about, and the more people who know about it, the more likely it is to get reviews / blogged about / etc.

That's another angle to go for directly, though; try to find some blogs covering areas where your game seems relevant, and see if they're interested in reviewing it.

I've failed at marketing 2 games, and then formed a company with other people, one of whom knows a few things about marketing.

The key is to do something that makes you stand out. For the big players, it's easy enough to do by throwing your weight around. For the small players, you have to look for a hack; something that nobody else is doing. Something crazy that makes people look up from their humdrum lives and take notice and say "hey, cool!".

Marketing is a continual task that never ends. Unless you manage to capture the mythical "virality" (which 99.9% of products don't), your sales will always be tied to your continued marketing effort.

Steam's market is quite good. To be in Steam's marketplace is probably a very good thing. But, the barriers to entry are likely a lot higher than the Xbox 360 market. Just judging from what and who I've seen on Steam's store, I wouldn't aim to be there right out of the gate.

Higher than the Xbox360 indie market, maybe. Definitely not the main XBLA store though.

From what I've read it's pretty easy to get up on Steam. Terraria and Magicka are good examples of games from unknown teams making it big. I think Terraria was put together in something like 4 months, made a couple million dollars too.

what I do when exploring any game concept is to quickly prototype a playable version, and try to "find the fun" in the game. Once a certain fun level is reached, iterate, and build the game around that.

to see if people actually want to play the game, you need to test the waters. Ghetto-like testing (Zynga's much publicized way of using FB game ads to gauge user interest ) is one option.

Fun = addicting game mechanic.

Notch created minecraft...although that's probably an exception to the rule.

maybe try getting your game into the next humble bundle to get more exposure

I'm currently creating an HTML5 Canvas games site in my spare time. So "not yet", but someday, depending on your definition of success!

My definition of success is to work on doing what I like full time while keeping the bills paid. That's my goal.

I hope things work out for you. Keep us posted!