game company business plan

In-Depth Guide to Create a Business Plan for Video Game Studio

• Last Modified: February 24, 2023

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This article will first discuss the motivations and advantages of having a business plan. If you’re launching your first game, then a business plan might not be necessary now. Then, the main sections of a business plan will be detailed and examples of a fictitious studio will be given (in green).

Throughout this guide we cite a fictional video game studio for ease of reading, but all of the entrepreneurial and management mechanics explained are just as relevant and useful for a self-employed person, for an informal group of devs or for any industry organization that does not necessarily see itself as a studio yet. Each plan business is different. This guide is an example of a structure and should be modified based on the reality of your studio and projects.

Table of Contents

You might not need a business plan  now.

Before starting, I must warn you. A well-crafted business plan can be a valuable tool for your video game studio as you navigate the growth of your business, but it is not always essential, especially for indie game developers launching their first game. Most of the time, I recommend to start building a pitch instead of full-fledged business plan. This article will help you to do so: Mastering the Art of a Successful Video Game Pitch: A Guide for Indie Game Developers .

(If you are still not sure, my contact info are at the very bottom of this page.)

What is a Business Plan in a Video Game Studio Context

A business plan is an essential tool for setting goals and outlining a clear path to achieve them in the context of your video game studio. As the owner or founder of a video game studio that has already launched a first video game, I understand that you are looking for advice on how to create a comprehensive and compelling business plan. The plan not only showcases your game(s) but provides a comprehensive overview of your company, team, resources, finances, marketing strategies, player community, operations, and development processes.

The purpose of a business plan is to present a clear and concise picture of your studio, from its past and current operations to its future plans. It’s an opportunity for you to showcase your vision and drive to potential investors, partners, and stakeholders, demonstrating that you have a solid understanding of your industry and market, as well as the skills and resources necessary to achieve your goals.

Why  and When a Video Game Business Plan

As the owner/founder of a video game studio, you may find yourself considering the creation of a business plan at various stages of your business journey. Whether you’re just starting out or have already launched your first game, a well-crafted business plan can help bring clarity and focus to your future plans and projects. Here are some benefits you can expect to gain by creating a business plan:

• Ensure a strong start for your business
• Clearly define your short, medium, and long-term goals
• Attract investors or launch a successful crowdfunding campaign
• Build credibility with partners and employees
• Streamline your development process and manage operations efficiently
• Secure publishing partnerships
• Hire top talent, like an executive director or key employees
• Explore opportunities for acquiring or merging with other businesses

Executive Summary

The executive summary is an important section of your business plan. It provides a condensed overview of the entire plan, including the financial appendices, in a one-page format. This section is usually written last, after all other sections are complete.

For your convenience, I have included examples in this guide that use a fictional video game studio (Emperor’s Studio) and its first game (Empy). Y ou will find these examples written in this color.  If you want the .docx template, simply use the contact form at the bottom of this page to request it from me.

Business Overview

In this section, we give an overview of the current business and its past.

Introduction

Start with an introduction paragraph and explain how the studio was founded (if applicable). Describe your tasks, those of your partners and employees if you have any.

Emperor’s Studio is currently managed by two people. Founder 1 & Founder 2 are longtime partners in the game development industry who strive to keep the gameplay, fun and quality at the highest level in their games. The business is a small indie game studio based in [a city]. Founder 2 is the main programmer, developer, and designer while Founder 1 is the concept and pixel artist, scenario writer and community manager.

The company focuses on combining video games, comics with the interactivity and interconnectivity of an ever-expanding multimedia universe called the Empy’s World. The studio released its own previous game on Steam and have collaborated with many [other businesses and influencers] on projects such as [project’s names].

Management team / Our team

Take care to present your team from its best angle. Describe the professional experience of each member and the detailed responsibilities within the studio

Be consistent with the CV of each member and his Linkedin, because these are details that could be verified later by future investors or partners.

A photo of you, your group and your colleagues will make the document warmer. After all… other humans will read you!

A Word From Us

When possible, we suggest that entrepreneurs write a personal message (maximum 100 words) to further personalize the business plan. This is the kind of inspirational and public message that could be found in the “About us” section of your website.

Business Ownership & Structure 

Specify whether it is an incorporation, a general partnership, a single self-employed worker, etc. 

If applicable, what is the structure of the company’s shares? If you anticipate that the latter will be subject to change in the near future, you can indicate it.

If you don’t know yet, a good start to understand the best structure could start by reading the Wikipedia List of legal entity types by country or to do a quick Search on Google with “Business Structure + [your country]”. Most country have an article about this subject on their website (look for .gov website). 

Emperor’s Studio is registered as a limited liability company (LLC) and is 50% owned by Founder 1 and 50% by Founder 2.

Collaborations / partnerships

Have you collaborated with other companies, studios or artists? Whether it is a contract that you have awarded to others or work for which you have been commissioned, in both cases, it is relevant to explain it.

Collaborator 1 is a veteran book cover and sequential artist who has been working with us since 20xx on Project 1 to help develop our artistic vision. Collaborator 2 and 3 are experienced pixel artists that we have worked with on since 20yy. Collaborator 4 is a skilled and versatile musician that has been able to adapt and implement the audio vision that we wish to execute within our games.

Key planned hires

Explain the type of employee you will need to hire in the near future. Detail each profile sought.

Previous games and collaborations 

Showcase your already launched games. If you have collaborated on the development and release of a game, it is relevant to present it as well, without forgetting to explain how your studio was involved in it.

Current Development : Empy

( empy is the name of the fictional game).

Talk about the current development. If it is not started but you have plans or an idea of ​​the main aspects that will make it up, demonstrate them.

Some aspects that could be mentioned:

• Progression
• Preview Video (trailer)
• Player Experience
• Your future gaming community, but rather briefly, as this section will be scrutinized in much more detail in the sections that follow.
• A website for this game

Other merchandise

If you are going to create and sell promotional merchandise, it would be a good idea to indicate so. For example:

If you have a visual elements, it’s perfect to show them.

Market Analysis

This section presents and analyzes the market. It is very useful if you plan to present it to potential investors or partners who are not in the same industry as us. It allows you to define trends that are specific to your game / studio, for example, a specific game category such as Survival RPGs .

Global Video Game Market

The global video game market value was estimated at xxx USD for the year yyyy. It is also estimated that the market will reach zzz gamers in yyyy and a market value of xxx USD.

Industry Trends

As the owner/founder of a video game studio, it’s important to keep a pulse on the industry trends that may impact your business. In the “Industry Trends” section of your business plan, you should aim to provide a comprehensive overview of the current state of the video game industry, including market size, key players, and any significant trends or shifts that are likely to affect your game(s) and target customers.

Make sure to provide data and research to support your claims, such as industry reports or data from trusted sources. This will demonstrate to potential investors and stakeholders that you have a deep understanding of the industry and that you have taken the time to thoughtfully consider the competitive landscape.

I recommend reading this article I wrote about tools that can help searching video game market data for market size and trends.

RPG & Survival RPG

Survival games encourage the exploration of an open world and keep the survival parts of these games a central aspect of the player’s experience, while in RPG, the player controls the actions of a character immersed in some well-defined world .

Based on market research made from X games available on Steam, Y are tagged both as a RPG and a survival game. 

(Include all your sources)

Competition analysis

It’s important to understand the market environment you’ll be operating in, which includes not only supply and demand but also the competition. That’s why in your business plan, it’s crucial to analyze your direct competitors – studios that have already released or are planning to release a game similar to yours. This will give you a better understanding of the products and development studios in your market.

RPG + Survival Games

Among the best rated games having both RPG and Survival tags, we can find:

•     Yuppie Psycho
•     Darkwood
•     Don’t Starve
•     World of Horror
•     Terraria
•     FTL: Faster Than Light
•     Starbound
•     The Riftbreaker: Prologue
•     Risk of Rain
•     The Binding of Isaac
•     Fallout Series
•     STALKER: Call of Pripyat
•     Dig or Die
•     Foraging
•     Craft In Abyss

Development Studios

The company anticipates moderate competition from development studios of all sizes specializing in Survival RPG game development.

The table below present notable studios that have released at least one game of this genre.

This is where we get into the nitty-gritty details of your plan. I believe that all of the following sections are critical to your success, as they will outline exactly how you plan to achieve your goals. These sections will likely be the focus of discussions and questions with your readers.

Development Schedule and Budget

In this section, you will want to detail the projects you are currently working on or plan to work on soon. Start with a high-level overview and then break down each project into smaller, more manageable parts, providing time estimates for each step.

Milestones (Tied to the Development Schedule)

This section is similar to the previous one, but focuses on milestones that are not directly related to the development process.

• Create a detailed plan for communication, presence and visibility on the company’s social networks, but also through influencers.
• Create a detailed budget explaining the allocation of funds for each of the projects and subprojects required for the development of the game.
• Setup accounting ledgers
• Plan the necessary hiring and projects (if required)
• Create a detailed budget
• Month 1: Start of development
• Game Development / Project / Hiring Milestones
• Half of year 2: game launch
• Net sales of 270K$ during year 2 
• First 1,000 positive reviews during year 3
• Net sales of $ 2.6M$ during year 3

Technology, Software and Tools

This part allows you to list the software, technologies and tools that you use.

Location & Facilities

Indicate your offices and premises if applicable and if you think this would be relevant for the reader. For example, to explain a future business expansion, you can indicate the number of square feet as well as the price of the rent.

We plan to move into a room of approximately xxx square meters very soon, which will cost YYY $ per month. This new space will allow us to carry out the expansion we desire, to hire staff and for everyone to work and meet physically.

Distribution and Sales Plan

As the owner of a video game studio, it’s crucial to have a clear plan for distributing and selling your games. Whether you choose to sell your games exclusively through online distribution platforms like Steam or through physical merchandise, it’s important to outline the details in this section.

If your sales model is entirely digital, simply state that fact in this section. But if you also plan to sell physical products, such as collectibles, you can use this section to explain your approach.

Regardless of your distribution and sales channels, be sure to include the selling price of your game and any other products you offer in this section of your business plan.

Empy will be on sale exclusively through the Steam platform at a price of 19.99 US.

Marketing Plan

marketing plan is a pillar for the success of your business, and in some cases, it may be wise to start with this section before moving on to the rest of your business plan.

The marketing plan section should answer the question, “How do I market my game?” by covering traditional marketing tactics and personalizing them to the video game industry. This section will summarize your marketing objectives, which will be detailed further below.

It’s worth noting that marketing is often the reason why many game developers fail to reach their goals. To ensure that your marketing plan is as comprehensive as possible, you may consider reading our guide “ Indie Video Game Marketing Plan: Stand Out in a Crowded Marketplace ” in parallel with working on this section of your business plan.

Marketing Objectives

We summarize here the objectives of the marketing plan which will be detailed below.

Emperor’s Studio ‘marketing objectives are to:

• Solidify brand identity as a notable studio in the specific genre of Survival-RPG
• Secure sales of the games and products
• Highlight the company’s commitment to continuous product improvements that meet the specific needs of its community and customers
• Increase and maintain the number of players within the community of Emperor’s Studio
• Start and increase the fan email list

Video Game Marketing Campaign Strategy

To effectively reach as many players as possible and achieve a successful return on investment, your marketing strategy should take into account multiple aspects.

A strong website will showcase your latest news, provide text content and articles that help you stand out in search engines for your games and products, and serve as a hub for press releases. By doing so, bloggers, journalists, and media outlets will have access to all the information they need to spread the word about your games.

To break down your marketing strategy into manageable parts, consider dividing it into three categories: pre-launch, launch day, and post-launch.

Pre-release marketing tactics

Explain the marketing efforts you plan to make before the game launches. Ideas include:

Steam store page, tags and notification. 

• Developer announcements. 
• Steam Store Widget. 
• Localization (Languages ​​and translation). 
• ‘Coming soon’ Steam Page. 

Connect with Steam Curators

Valve published a 30 minute video about Building Your Store Page and Publishing Your Application.

This explain how to setup your store and game pages. Their graphical assets template can be found here .

For each studio’s game that will be released on Steam, including Empy, a page for the game will be created before the game is released. It will contain all the information that identifies the game, three screenshots and its characteristics so that it can be discovered by the gaming community, including thematic, gameplay, art style, and sub-genres. The potential customers can add it to their Wishlist and steam will notify them when it will be released and available to purchase. The potential customer will also be notified if the game is discounted and she / he has not purchased it yet at that moment.

Developer announcements

Announcements will be made from the website, but also through the Steam system, to share the progress that is gradually leading to the big day of the launch. It’s a way to create and maintain the “hype” before its release, and to be able to interact with the community that is interested in it.

Steam Store Widget

Steam provides a way for developers to integrate a widget into their website that displays a short description of the game and links to the Steam purchase page. When the latter has not yet been released, we can then see the “Add to Wishlist” options and this becomes a way of quickly creating a link when a potential player goes to the website with her / his Steam Wishlist, thus strengthening his commitment to the purchase.

Language and translation (localization)

All dialogues will be in json for easy translation. Thus, the game benefits from increased visibility towards players speaking one of the languages ​​into which the game will be translated. Thus, by considering all non-English speaking players who represent 58% of Steam users , Emperor’s Studio is strengthening its place in the market and securing market share that is impossible otherwise.

‘Coming soon’ Steam Page

A “Coming Soon” page will be created so that the game can appear in the steam search and that players can add the product to their Wishlist. Then they will be notified on the launch day.

Emperor’s Studio will contact Steam curators from the platform’s already integrated tools that allow 100 curators to be offered keys for their members to review the game. Therefore, the company will carefully choose the best 100 curators who have the best profile and audience aligned with Empy.

Release Day Marketing

Explain the marketing efforts you plan to deploy the day the game’s launch.

When the studio will launch its games, the official Emperor’s Studio Twitch channel will be live and broadcast a playthrough. In order to accentuate this hype, the company will sponsor influencers to play live on their own Twitch channel as well.

After Launch Marketing

Explain the marketing efforts you plan to deploy after launching the game. Here are some ideas:

Steam Organic Visibility

• Influencers campaigns (read our Ultimate Indie Game Guide to Influencers)
• Social media & Advertising
• Game festivals (PAX)

Emperor’s Studio is aware that the launch of the game is not the finish line, but rather the start line. All the work and planning done previously will allow better visibility and launch of the game and will also facilitate the progress of the next marketing efforts below.

Steam wrote in its developer documentation that when a game is successful, it could be shared on the platform’s main page. We therefore speak of the principle of “organic visibility”. Concretely, the sections on Steam are as follows:

• News and trends
• Top Sellers
• Promotions (when activated)
• Friends news feeds when the purchase of the game is made, screenshots are shared and achievements earned
• The discovery queue

In addition, for each major update, if there is any, the studio will create and share its patch note with the Steam community in order to benefit from increased visibility of the platform, which Steam sometimes calls “Update Visibility Rounds”.

Beyond all this, a “standard” visibility is offered through the Steam catalog based on the tags and style of each studio game.

Connect with Indie Games Influencers (on Youtube, Twitch, Facebook Gaming…)

The number of unique channels streaming on Twitch reached 10.6 million in 2020 (Q3) while 913,000 unique channels streamed to YouTube Gaming the same year  [1] , reaching 100 billion hours of video game content watched on the platform.  [2] Therefore, among the highest marketing priorities of the studio are the promotional campaigns that will be carried out by some of these influencers for the studio, in the form of contracts and sponsorships. Emperor’s Studio will carefully select the channels that are most likely to contain an audience interested in the company’s games in order to obtain the best return on investment.

A comprehensive tactical plan could be developed to effectively execute this marketing aspect. This will include among other things the communication strategy with influencers (what will be presented and “how”), an exhaustive list of interesting influencers with information on their channel (to get in touch in a personalized way) and the follow-up method.

Social Media & Advertising

Social networks such as Facebook, Twitter, Twitch, Youtube and Discord, although they all have a slightly different function, are also a pillar of the marketing strategy at Emperor’s Studio. These social networks will serve to inform fans, interact with them through various means, promote products’ launch and consistently show presence to them over a long period of time, unlike live streaming with influencers whose goal will not be to give a long-term and multifaceted experience around the studio’s universe. Some social networks like Twitter, but also Facebook, can be used to communicate relevant information for the press and journalists in order to receive press coverage.

Again, a comprehensive tactical plan could be developed to effectively execute this particular marketing aspect. Marketing managers at Emperor’s Studio will use it to understand communication strategy, quantify objectives, perform analysis and control of various KPIs, and plan the release schedule.

Game Industry Events

Participating in industry events such as GDC, PAX and MomoCon Convention and many other is part of Emperor’s Studio ‘marketing strategy. This investment should help acquiring contacts, enhancing the brand reputation and increasing awareness among our audience (the gaming community).

A mailing list is one of the most intimate and solid ways to connect with fans in a studio. It also helps to get to know them better. With a good communication strategy in place, the studio will be able to use this powerful marketing tool in the long term. If you choose to adopt this strategy, indicate and explain it.

Intellectual Property

This section is often overlooked by business plan writers, but is sought after by readers, especially in a software development context. Future partners or investors want to know if you own the IP, and if so, what does it include in more detail.

Emperor’s Studio’s games are designed to ensure the protection of its revenue-generation potential and long-term sustainability of the business. The Company has developed an IP committee mandated to establish policy and guidelines surrounding IP application and access to confidential information. The IP strategy surrounds the software algorithm, networking and database design, game play and game design elements. Therefore, the storyline, characters, arts, music, and packaging design are copyrighted.

Key metrics (KPI)

In summary, Key Performance Indicators (KPI) are indicators that allow you to compare your studio’s results against set objectives or industry standards. KPIs can be marketing or operational in nature in order to measure performance, but they can also be associated with company finances.

Each KPI can be further developed in the plans concerning them and by the person responsible according to the strategies and objectives evolving over time, but while keeping a modest number of KPIs so that they remain effective, meaningful and SMART (Specific, Measurable, Attainable, Relevant, and Time-bound).

In the case of Emperor’s Studio and its icming launch, the following KPIs would be the most important:

• Steam Review score and number
• Steam community and player engagement
• Steam Wishlist, paid download
• Influencers reviews and views
• Google Analytic (website and Alexa)
• Facebook likes, impressions and engagement
• YouTube views, engagement and subscription
• Backlinks from press coverage

Partnership with a publisher

Explain the business relationship you have with your publisher. If you don’t have one and / or are currently looking for one, it’s a good idea to indicate it here. The article Publishing Deal for Indie Video Game: how to research, find, negotiate and secure your partnership with a publisher could be useful.

Emperor’s Studio is currently working to identify video game publishers having a “fit” with the studio, its culture and its vision in order to pitch its future development projects and gather and analyze the best offers.

The company also considers the possibility of doing business with independent indie financing funds (sometimes called “syndicate”) for the advantages that this could provide in the longer term.

Financial Plan

Key assumptions.

The key assumptions summarize what must happen in order for the business plan to be carried out correctly. They can be taken from historical company data, industry benchmarks or smart guessing . These assumptions can be revised and evolve over time, just like the financial plan.

The following assumptions were made in order to build the financial planning:

• An amount of 250,000 $ will be raised from a publisher or investors to develop and market Empy.
• The number of copies sold by the end of Year 3 will be 73,940.
• The sales distribution of these 73,940 sales has been based on the Product Life Cycle theory.
• The sale price will be $ 20 US.
• A Steam Commission of 30% of the sales is planned for each sale.
• The proportion of games sold at a discount compared to the total number of copies sold is planned at 25%.
• The average discount of the sale is forecasted at 30%
• The portion of the revenue going to publisher is estimated at the full amount of the loan plus 25% of the sales during years 2 and 3.
• The debt owed to the publisher will be totally cleared at the end of year 3. The total amount is planned at 250,000 $ (initial amount) plus 25% of the sales during year 2 and 3, for a total of 469,187 $
• Once the game launched, an additional amount of 50,000 $ will be spend on marketing, 50% during the first 6 months and 50% for the following 12 months, mainly funded from the net profit of the sales.
• At year 3, the amount of cash, before the corporate taxes and dividends, and after having paid the publisher loan, should be of $ 187,723.

Use of Funds

Explain how the funds will be used and the resulting financial plans. May be accompanied by financial models, data and tables.

As indicated in the financial forecasts below, 100% of the amount will be allocated to the development of the game Empy and its marketing. The studio will raise $ 250,000 US.

Sources of Funds

Explain where the funds come from if they have already been raised.

Currently, Emperor’s Studio is actively seeking the best editor or investor for its project.

Financial Forecasts

Financial forecasts provide an understanding of how a company’s finances will take shape in the future. It is important to remain realistic and consistent in order to be convincing with seasoned investors.

Financial forecasts are divided into three broad categories:

• Income Statement: shows income versus expenses for a given period of time (usually 12 months).
• Cash Flow Projection: It will show how the money will be used and prove that a positive cashflow will be generated in order to be able to repay debts.
• Balance Sheet: This section is often compared to a “snapshot” of the business at a future date showing the net worth of the business with assets, liabilities and equity.

If you need a template, simply use the contact form above to request one from me.

The appendix consists of attaching any document that could be useful and complement the business plan. Sometimes it can be a pitch deck to present the game that is coming soon in a much more visual way. 

The details of the financial plan are shared as an appendix in Excel format. 

Additional Resources

• Send me a message (below) so we can discuss your business plan, publisher research or any other project!
• My lengthy guide on (Indie) Game Marketing Plan – Stand Out in a Crowded Marketplace should help you understand, elaborate and write your marketing plan in much more details
• The Ultimate Indie Game Guide to Influencers could be helpful if you plan to launch an influencer campaign for your game
• If you think a crowfunding would be the right way to fund your development, I covered the topic in our Kickstarter for Indie Games: A Comprehensive How-to Guide with Examples, Tips and Templates
• Liveplan : a platform that streamlines the drafting process of writing a business plan and automates many steps in the creation of financial forecasts.
•  Valve’s article about Steam’s Features And Tools, Marketing

If you have any questions or comments about this article, feel free to let me know in the form below.

Mastering the Art of a Successful Video Game Pitch: A Guide for Indie Game Developers

Creating a Winning Business Model and Competitive Analysis for Your Indie Game

Lean Startup Principles for Indie Game Development: Planning, Prototyping and Launching Your Game

Publishing Deal for Indie Video Game: how to research, find, negotiate and secure your partnership with a publisher

How to Successfully Raise Funds for Your Video Game Studio

How to Put The Right Price on a Video Game – A Guide for Indie Studio

Feel free to reach out to me via Discord  at   Galabyca#5789  (this is case sensitive). You can  share me your project and we’ll discuss how I can help you. Additionally, if you have any comments or questions about the last article, don’t hesitate to send them my way through Discord as well .

Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Video Game Business Plan

Start your own video game business plan

Pixel Frontier Studios

Value proposition.

Pixel Frontier Studios creates immersive, narrative-driven video games that foster strong emotional connections with players and explore unique themes and settings.

The Problem

The gaming industry is saturated with repetitive content and a lack of diversity in themes and storytelling. Gamers are looking for unique, captivating experiences that push the boundaries of conventional gaming.

The Solution

Pixel Frontier Studios focuses on creating high-quality, innovative games with memorable characters, engaging storylines, and diverse settings. Our games provide an emotional experience that keeps players invested and craving more.

Target Market

Our primary target market includes:

• Gamers aged 18-35 seeking narrative-driven experiences
• Individuals who enjoy indie games and unique concepts
• Gamers who appreciate games with diverse representation and themes

Competitors & Differentiation

Current alternatives.

• AAA game studios producing high-budget games
• Other indie game studios
• Mobile gaming companies

Pixel Frontier Studios’ commitment to diverse storytelling and innovative game mechanics sets us apart from competitors. Our team’s passion for creating unique experiences and our attention to detail ensure high-quality games that resonate with players.

Funding Needs

• Office space and equipment: $150,000
• Software and licenses: $50,000
• Salaries and benefits for the first year: $600,000
• Marketing and advertising: $100,000

Initial game development: $500,000

• Total initial funding needed: $1,400,000

Sales Channels

• Xbox Game Store
• PlayStation Store
• Nintendo eShop
• Direct website sales

Marketing Activities

• Social media campaigns
• Influencer partnerships
• Gaming conventions and expos
• Sponsored events and tournaments
• Press releases and PR

Financial Projections

2023: $1,200,000

2024: $2,000,000

2025: $3,000,000

Expenses/Costs

2023: $1,400,000

2024: $1,600,000

2025: $1,800,000

2023: -$200,000

2024: $400,000

2025: $1,200,000

• Secure funding — June 1, 2023
• Establish office space and equipment — July 1, 2023
• Complete hiring and onboarding — August 1, 2023
• Begin development of the first game — September 1, 2023
• Launch marketing campaign — January 1, 2024
• Release first game — October 1, 2024
• Begin development of the second game — November 1, 2024
• Achieve 500,000 units sold for the first game — December 31, 2024

Team and Key Roles

Ceo and creative director, oversees company strategy, game development, and overall creative vision, lead game designer.

Responsible for designing and implementing game mechanics, levels, and gameplay experiences

Lead Programmer

Manages programming team and ensures all technical aspects of the game function as intended

Lead Artist

Guides art direction and oversees production of all visual assets for the game

Narrative Designer

Develops and implements the game’s story, dialogue, and character interactions

Marketing Manager

Directs marketing efforts, including public relations, events, and social media campaigns

Partnerships & Resources

• Local game development associations and networks: Collaborate on events and initiatives, access to resources and support
• Game engine and software providers: Secure partnerships for cost-effective licenses and support
• Gaming influencers: Establish partnerships for promotion and feedback during game development

The quickest way to turn a business idea into a business plan

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Your Indie Game Studio business plan (and how to get one)

• by Zachary Strebeck

So you want to start an indie game studio ?

First thing’s first:

You need a business plan.

In this post, you’ll find a comprehensive indie game studio business plan to use in starting your own game company. I’ll give you a few options, as well as some important resources to get you going with your new business.

Let’s get started.

First – get all of my FREE video game law eBooks by signing up below!

Why do you need a business plan.

You need to realize one thing:

Creating indie games is an extremely tough business.

Most games will fail.

That’s right. Read it again.

No matter how good your game is, chances are that your game will not make back whatever time or money you put into it.

And that’s okay,  if  you’ve planned for it.

Check out this talk by Rami Ismail of Vlambeer for some serious truth about the indie games business:

A business plan will help you to figure out just how you’re going to deal with the realities of the indie games business. For example:

• You’ll explore how much your business will cost to run, so you know how much you need to make back
• You’ll delve into the possible revenue streams and feasibility of them
• You can get some plans in writing for researching the target market and how you can sell to them (something most indie devs don’t bother doing)
• Other issues are addressed, like what makes your game unique (be honest with yourself), whether you need some funding or investors, whether you’ll be seeking a publisher, and more!

The business plan also serves as a template that you can always refer back to when questions come up during development.

It should also be a living document that is updated throughout development as the situation changes.

Indie game studios – why they are unique and why they’re not

Indie games are different.

They’re different than other businesses:

• Very different from the local mom and pop store
• Quite different than your average tech startup
• Extremely different than a big-budget AAA game

But just because there are many differences in the realities of the indie game business, there are a ton of things that are exactly the same.

In fact, most businesses have many things in common.

• Most businesses fail.
• Most businesses struggle to have working startup capital.
• Most businesses can benefit from some market research up front.

As with most creative businesses, figuring out whether the audience wants your game or not is extremely difficult for indie game developers. It’s a hit-driven business, which means that there’s usually some kind of creative “spark” that draws audiences in.

However, if you understand market research, marketing, and public relations, you can better yourself for appealing to a certain audience and selling directly to them.

Startups usually thrive by finding a problem that people have, and providing them a way to solve it (hopefully in a way that they pay for). Or they see a hole in an industry that is not being properly served, and fill that hole.

Others try to outdo a competitor, making a better product. But that’s a much more difficult task.

What can indie studios learn from this?

Looking at the market that’s out there and seeing what actual players are looking for is a great place to start. While many developers start with the idea, this is putting the cart before the horse.

Creating a product and hoping that there’s an audience for it is the opposite of how most successful businesses work .

There’s a very good reason for this:

It doesn’t make much sense.

You’re putting a ton of time, money, and effort into creating something that you don’t have any clue if it will be even moderately successful.

On the other hand, if you know the industry, know what players are looking for that they’re not getting, and can provide that experience to them (in a form that has engaging graphics, fun gameplay, and other great aspects), I believe that you’re enhancing your chances of finding an audience.

All of this can be addressed in a business plan, as we’ll see below.

Keep reading!

Different models for business plans

There are any number of business plan models out there, so which one you choose is entirely up to you.

The main ones are:

The Lean Canvas

This is a one-page business plan based on the book The Lean Startup. You can  download a template here . Honestly, it’s my preferred method of business planning, because it gets right to the heart of the important stuff:

• What problem are you solving?
• Who are you potential customers?
• What is your unique selling proposition?

Rather than messing around with Executive Summaries and other stuff, you have the ability to pump out a plan in 20 minutes and adjust accordingly as you research, develop, and market your game.

A traditional Business Plan

For a more traditional plan, you generally have 8 sections:

• Executive Summary (an overview/summary of the business plan)
• Description of the Business (Information about your business and why you are unique)
• Market Analysis (who are your potential customers?)
• Organization and Management (the legal structure and who’s in charge of your company)
• Your Product (describe your product, including customer benefits)
• Marketing (how will you market and sell your product?)
• Funding (do you need to raise any funds or will you fund the business yourself?)
• Financials (project your business’s financial future)

It’s much more formal and in-depth than the Lean Canvas method, which makes it a little more difficult to iterate on. The Small Business Administration has some templates and examples on their site that should help you out.

Check it out here.

Working with partners – what are your expectations?

There’s one more important step:

Whenever I have clients who are working in a partnership or multi-owner business, I like to have them fill out a short questionnaire.

Meaning, they each have to fill it out without discussing the answers with each other first. This helps me ensure I’m getting the honest answers.

If they do match – that’s great!

If they don’t match , it means that there could be some serious issues and expectations that need to be aligned before moving forward.

What are the questions? Something close to the following:

• What is the proposed business model? How do you plan to actually  make money with the business?
• Is fundraising going to be necessary? Is there a plan in place for that fundraising?
• What day-to-day responsibilities will  you  have in the business? What time commitment will that involve?
• What day-to-day responsibilities will  your partners  have in the business? What time commitment will that involve?
• Is there any plan to add other people to the business? What are the conditions for that happening?
• What’s your exit strategy?

Those are the most important questions as far as overall strategy goes.

Some of these things (#1 in particular) will be dealt with in writing up the business plan, but it’s still important to make sure you’re all on the same page.

Sign up below to get my FREE game development legal eBooks!

What are some resources you can use to learn about starting running a business.

Still feel like you’re clueless?

Luckily for you, there are a bunch of great resources out there to help new businesses.

Here are some of my favorites (some of which I mentioned before):

• The Small Business Administration website
• Your local government’s business site – many local governments have checklists and walkthroughs about the specific steps to take in starting a business in that particular place.
• Running Lean  (you can start with  The Lean Startup , but I feel that Running Lean is more “actionable”)
• Rachel Presser’s  The Definitive Guide to Taxes for Indie Developers
• My podcast,  The Legal Moves Podcast , which has a ton of interviews with indie devs who have been where you are now

Hopefully the advice here is helpful for you!

If you have any questions about setting up your indie game company or anything else games-business related,  feel free to contact me . You can also check out my Indie Game Jumpstart Bundle here , for everything you need to start your studio in one package.

Zachary Strebeck

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How to Start a Video Game Company in 14 Steps (In-Depth Guide)

Updated:   February 9, 2024

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The video game development market is on the rise. With an estimated global evaluation of $217.06 in 2022 and a compound annual growth rate (CAGR) of 13.4% from 2023 to 2030, now is the time to get involved. For gaming companies looking to make a mark, this is a great year to put out your first game.

The good news is that today’s tools, technology, and distribution platforms make game development more accessible than ever. With the right mix of creativity, business savvy, and persistence, the opportunity is there.

This guide will walk you through how to start a video game company. Topics include market research, competitive analysis, registering an EIN, obtaining business insurance, opening a business bank account, and more. Here’s everything to know about opening a game development company.

1. Conduct Video Game Market Research

Market research is essential to learning how to start a video game company. It offers insight into developing a business plan, including details on your target market, local market saturation, and trends in products and services.

Some details you’ll learn through market research for your video game company include:

• The most profitable and popular genres are multiplayer online battle arenas (MOBAs), first-person shooters (FPS), sports games, adventure games, and roleplaying games (RPGs).
• Opportunities exist across genres and platforms. The industry rewards creativity, strong visuals and gameplay, and built-in social/community features.

Keys to succeeding in the highly competitive space include:

• Developing innovative, high-quality games with wide appeal
• Creating immersive cross-platform experiences
• Consider creating mobile apps in the form of games and games for handheld devices
• Building a community around your games through streaming, tournaments, social media
• Leveraging free-to-play models, in-game purchases, subscriptions
• Partnering with publishers, platforms, and influencers
• Utilizing data analytics to refine game design and monetization

The key to success in game development is understanding player demand across genres and platforms, crafting quality experiences, and leveraging communities and partners. For developers with unique ideas and the drive to succeed, it is an ideal time to capitalize on this booming, multi-billion-dollar industry.

2. Analyze the Competition

Understanding the competitive landscape is crucial for any new entrant in the video game industry. Performing thorough competitor analysis should be an ongoing process to inform your strategy and positioning.

Some ways to get to know local competitors in game development include:

• For direct competitors, you’ll want to deeply analyze their games across multiple dimensions.
• Examine the genre, platform, and monetization model they are utilizing.
• Study their target audience and demographics.
• Evaluate key features and mechanics, while also looking at strengths and weaknesses in gameplay, graphics, and user experience.
• Review their business model, pricing, and in-app purchases.
• Assess their marketing and distribution strategy, along with their social media and community engagement.
• Consider their branding and messaging, funding and partnerships, company culture, and values.
• Closely analyze competitors’ web presence and digital marketing tactics. Evaluate the website’s functionality, visuals, and content.
• Check SEO optimization and keyword rankings.
• Look at social media followers and engagement. Examine video views and streaming numbers.

Competitor analysis is a key input into strategy, product development, marketing, and operations. It ensures you can craft differentiated, appealing games while converting players into long-term fans.

3. Costs to Start a Video Game Business

Starting a successful video game company requires careful financial planning and budgeting. The initial costs to get up and running can be substantial, and ongoing operating costs pile up quickly. Here is an overview of estimated expenses to factor into your business plan:

Start-Up Costs

• Business entity registration fees – $500-1500 to set up an LLC or corporation
• Legal/accounting fees – $1000-5000 to establish contracts, agreements, accounting systems
• Office space – $2,000-10,000/month to lease office space, depending on location and size
• Computer equipment – $3,000-10,000 for high-end PCs/laptops, servers, accessories
• Game engines and software – $0-$1500/month for licenses of game engines like Unity or Unreal
• Website design and development – $3,000-15,000 for a professional studio website
• Branding and logo design – $500-5,000
• Initial marketing activities – $2,000-10,000 for early promotions and advertising
• Initial hiring – Budget adequate salaries and benefits for early team members, estimate $8,000-12,000/month per employee
• Contingency fund – Set aside at least 10-20% of total budget for unforeseen expenses

Total start-up costs can easily exceed $100,000-500,000 depending on studio size, activities, and location. Fundraising or investors are often needed.

Ongoing Costs

• Rent and utilities – Budget $2,000-15,000 monthly depending on office size
• Salaries – For a small team of 5-10: $50,000-$100,000+ monthly
• Health insurance – $300-800 per employee monthly
• Game engine subscriptions – $0-$5000 monthly depending on team size
• Cloud computing services – $100-$1000 monthly for server capacity
• Software subscriptions – $100-$500 monthly for project management, communication, and design tools from software companies
• Legal and accounting – $2000-$10,000 annually for corporate filings, accounting, contracts
• Marketing and user acquisition – $5000-$500,000+ monthly depending on launch activities
• Customer service/community management – $4000-$15,000 monthly for 1-2 dedicated staff
• Travel and entertainment – $1000-$10,000 monthly for conferences, events, team bonding
• Hardware upgrades – $5000-$15,000 annually
• Ongoing R&D – 10%-50% of revenue reinvested into new games and technology
• Contingency fund – 10%-20% of operating budget for unexpected costs

Annual operating costs often amount to several million dollars for a studio with 5-20 employees. Revenue from game sales and in-app purchases must exceed expenses, requiring financial discipline.

4. Form a Legal Business Entity

When starting a video game business, one of the first legal steps is choosing a business structure. The four main options each have pros and cons to weigh.

Sole Proprietorship

A sole proprietorship is the simplest structure. You operate as an individual with pass-through income and total managerial control. However, you have unlimited personal liability for debts and obligations. This exposes all your assets if sued. For a video game company facing complex regulations and litigation risks, limiting liability is crucial.

Partnership

A general partnership shares control and profit among partners. However, each partner is also personally liable for all partnership liabilities. Disagreements between partners can also impede decision-making. The lack of liability protection makes a general partnership ill-advised.

Limited Liability Company (LLC)

A limited liability company (LLC) offers the best of both worlds – it limits owner liability and allows pass-through taxation like a partnership while providing the limited liability of a corporation. Owners have flexibility in structuring management and profit sharing.

An LLC limits video game developers’ exposure to lawsuits while granting full control over the business. Most startups in the gaming industry opt for an LLC to properly protect the owners’ assets.

Corporation

A corporation shields owners from personal liability but is taxed separately. Income is also taxed twice – at the corporate level and on dividends. There is extensive corporate record keeping and formalities required.

For a small, early-stage video game company, maintaining proper corporate governance can be an unnecessary drain on limited resources. However, large gaming studios often transition to a C corporation structure to prepare for an IPO.

5. Register Your Business For Taxes

One of the key legal steps when forming your video game company is obtaining an Employer Identification Number (EIN) from the IRS. This unique identifier is required to open business bank accounts, apply for licenses and permits, file taxes, and hire employees.

An EIN is essentially your business’s social security number. It allows you to register your company with state and federal agencies. The IRS uses the EIN to track tax obligations like payroll, income, and employment taxes.

Applying for an EIN is free and can be done online via the IRS website . The process only takes a few minutes. You will need to provide basic information about your business entity and ownership structure.

• Navigate to the EIN Assistant and select your business structure.
• Enter the legal name and address of your video game company.
• Select if you will hire employees or file employment tax returns.
• Provide the principal business activity and owner information.
• Review the information and submit the EIN application.

The IRS will process the request immediately and provide your EIN confirmation on screen. Be sure to keep this for your records.

In addition to the federal EIN, most states require registering for sales tax permits and business licenses. Check your state’s website for registration procedures, forms, and minimal costs. Proper legal registrations help legitimize your video game business and keep you compliant as you get up and running.

6. Setup Your Accounting

As a video game startup, meticulous bookkeeping and accounting right from the start is critical. With complex revenue streams from game sales, in-app purchases, subscriptions, and more, you need robust processes to track finances. This ensures taxes are filed properly and the company remains compliant.

Accounting Software

Begin by implementing small business accounting software like QuickBooks . This automates tasks like invoicing, expense tracking, reporting, and reconciliation by integrating with your business bank accounts and credit cards. QuickBooks makes organizing video game company finances easy.

Hire an Accountant

Hiring an accountant provides expertise in filing taxes, preparing financial statements, and advising on accounting practices tailored to the gaming industry. They offer services like:

• Bookkeeping – Recording income and expenses
• Payroll – Calculating wages and tax withholdings
• Cash flow analysis – Monitoring cash coming in and out
• Tax preparation – Filing quarterly estimated payments and annual returns

Expect to invest $1,000-$5,000 annually for an accountant depending on your needs. This upfront expense can prevent costly errors and provide peace of mind at tax time.

Open a Business Bank Account

Maintaining a clear separation of business and personal finances is also critical. Open a dedicated business checking account and credit card solely for company expenses. Never co-mingle personal and company funds.

Apply for a Business Bank Account

Applying for a business credit card is straightforward by providing your EIN, company financial statements, and ownership information. Credit limits are lower than personal cards but sufficient for most expenses.

7. Obtain Licenses and Permits

Before officially launching your video game company, it is crucial to have all required licenses and permits in place. Find federal license information through the U.S. Small Business Administration . The SBA also offers a local search tool for state and city requirements.

On the federal level, you may need to obtain:

• A trademark registration from the US Patent and Trademark Office to protect your studio name, logo, and game titles. This grants exclusive nationwide usage rights and the ability to sue infringers. The process takes 6-12 months and requires submitting an application and legal fees of around $250-$500 per mark.
• Copyright registration from the US Copyright Office to protect unique game characters, stories, graphics, and code. This is obtained by applying and $40 fee along with samples of original work. Registration must occur before any infringement to enable damage recovery in lawsuits.

At the state and local level, typical licenses and permits include:

• A business license that legitimizes your company and allows you to collect sales tax. Applications require a copy of your business formation documents and fees ranging from $50-$500.
• Zoning permits if renovating or leasing office space, costing $75-$500 depending on location. These verify the property is properly zoned and that renovations meet the code.
• Local construction permits for any office fit-out and renovations beyond basic cosmetics. These ensure building safety and proper inspections.
• Fire department permits related to office fire systems, occupancy limits, extinguishers, etc. if mandated for your studio size and layout.
• Health department permits related to employee kitchens, serving food, and other health codes that apply to your office.

Depending on your studio activities, additional documentation may be required such as liquor licenses for game launch events, special venue permits for tournaments, and licenses for warehouse spaces. An attorney can identify all pertinent federal, state, and city-level licenses your particular video game company requires.

The licensing process takes time, so build this into your studio launch plan. Provide detailed business information like legal formation documents, ownership details, office addresses, number of employees, and planned activities. Organizing this information ahead of time expedites obtaining permits.

8. Get Business Insurance

Operating a video game startup without adequate insurance opens the business to major financial risks. The right policies can protect against potential catastrophes that could otherwise bankrupt your company.

Consider a few scenarios: A fire destroys your office and equipment without property insurance to cover damages and rebuilding costs, which leads to permanent closure. Or a visitor slips and falls at your office, sustaining serious injuries.

Without liability insurance, you pay enormous lawsuit settlements out of pocket. Your company could also face a data breach exposing customer information. Lacking cyber insurance means bearing the costs of legal action and regulatory fines yourself.

The right insurance protects against disasters that threaten the company’s survival. Common startup policies include:

• General liability insurance covers legal judgments from bodily injury, property damage, slander, and wrongful termination lawsuits.
• Property insurance reimburses costs to repair or rebuild office space and replace equipment after incidents like fires, floods, or theft.
• Business interruption insurance provides income to continue operations if events force your office to temporarily close.
• Cyber insurance protects against data breaches, network damage, and cyber crimes.
• Errors and omissions insurance covers financial losses from mistakes in services provided.
• Directors’ and officers’ insurance protects individual board members from personal liability in lawsuits.

The process of getting insured involves first determining needed coverage types and limits. Then get quotes from multiple business insurers. Next, select a carrier and policy that meets your needs and budget. Complete applications providing details on your video game company. Finally, pay premiums to activate coverage.

9. Create an Office Space

Having a professional office space lends legitimacy and provides room to grow for a video game startup. It enables collaboration during game development, hosting publishers and partners, and accommodating additional hires. Weigh several options to meet launch needs within budget.

Home Office

A home office cuts costs and offers convenience early on. Dedicate space exclusively for work to avoid distractions. However, limited space can hamper team meetings and expansions. You also sacrifice professionalism meeting clients at home. Expect to invest in a dedicated broadband connection and furnishings.

Coworking Office

Coworking spaces like WeWork provide an instant professional environment with amenities like conference rooms, WiFi, kitchens, and printing. The open layout enables collaboration and networking with other tenants. Monthly costs typically start around $300 per desk. While flexible, Coworking lacks privacy for confidential calls and IP security.

Commercial Office

A traditional office lease provides the most control yet requires upfront capital. Expect to budget $10-$30 per square foot in monthly rent plus taxes, utilities, and other fees. Hire contractors for any desired renovation and furniture purchases.

Signing personally guarantees the lease, so consider forming an entity first. While more expensive initially, a long-term lease enables customization and expansion as your studio scales.

10. Source Your Equipment

Launching a video game studio requires obtaining specialized equipment like high-end computers, servers, software, and furniture. Explore these options to secure needed gear affordably.

Buying new ensures the latest technology and warranty protections. Desktops and laptops fitted for game development run $1,000-$5,000 from vendors like Dell , HP , and Apple depending on specs. Ergonomic desks and chairs cost several hundred per station. Shop smart by waiting for sales events or buying certified refurbished items when available.

Purchasing used equipment through sites like Craigslist , Facebook Marketplace , and eBay can yield major savings, with items discounted by over 50% in some cases. When buying remotely, focus on reputable sellers with detailed listings, maintenance records, and at least a 30-day warranty.

Renting workspaces already outfitted with furniture and computers can also be cost-effective starting. Coworking offices offer move-in ready private offices, potentially saving tens of thousands in upfront investments. However, monthly rental fees still apply for the duration needed.

Leasing business equipment through companies like Dell Financial Services enables paying over 12-48 months. This preserves capital for other startup needs. Lease-to-own plans give the flexibility to upgrade technology before the term ends. Just be sure to negotiate fair monthly rates and avoid predatory terms.

11. Establish Your Brand Assets

Crafting a strong brand identity is crucial for standing out in the competitive gaming industry. Ensure your studio makes a memorable first impression by proactively developing key branding assets.

Get a Business Phone Number

Begin by securing a professional business phone number through a service like RingCentral . Toll-free and local numbers with custom greetings and extensions project legitimacy when prospecting publishers, booking media interviews, and communicating with partners.

Design a Logo

Next, create a logo that encapsulates your studio’s vision. Consider an abstract mark, letterform, or illustrated character logo. Tools like Looka make it easy to develop and iterate ideas. Repeating your logo across websites, game art, merchandise, and promo items trains customers to recognize your brand.

Print Business Cards

To network at conferences and events, business cards from Vistaprint enable sharing contacts quickly. Your founders and developers should also have cards on hand when meeting potential investors and partners.

Don’t forget signage for trade show booths, office wayfinding, and branding exterior entryways. Vistaprint offers fast online ordering of banners, acrylic signs, window graphics, and displays with your logo.

Buy a Domain Name

Securing a domain name is equally important. Aim for yourstudio.com or .game to reinforce branding and trust. Use Namecheap to check availability and register domains affordably.

Design a Website

Building a modern website on platforms like Wix provides a hub for your brand. Showcase games, team bios, job listings, investor info, and contact forms professionally. Or you can hire seasoned developers through Fiverr to handle site construction, saving precious internal resources.

12. Join Associations and Groups

Joining relevant local organizations and online communities can provide invaluable connections and insights for a video game startup. Surround yourself with fellow developers, designers, and gaming entrepreneurs.

Local Associations

Seek out local developer associations like the International Game Developers Association with chapters nationwide. Attend meetups to exchange tips on game engines, monetization, work culture, and more. Conferences like IndieCade enable networking with industry veterans.

Local Meetups

Utilize sites like Meetup to find regular gaming mixers and demo days in your city. These facilitate collaborations, playtesting sessions, and recruiting opportunities. Interacting in person often leads to long-term partnerships.

Facebook Groups

For broader connections, join developer forums and communities on Facebook. The Video Games , Video Game Business Owners – Buy / Sell / Trade , and Video Game Collecting & Discussion have thousands of global members. Share work samples and puzzles to solve. Learn from countless peers simultaneously at any hour.

13. How to Market a Video Game Business

Marketing is indispensable for building awareness and driving sales of your games. Leverage both digital campaigns and real-world promotion to maximize reach across player demographics.

Personal Networking

Start by engaging your personal and professional networks. Existing relationships often convert to early customers for video game companies. Offer exclusive early access or limited edition swag to fans who pre-order or recommend to friends. Word-of-mouth is still a powerful driver.

Digital Marketing

For digital marketing:

• Run Google and Facebook ads targeted using interests like specific game genres, competing titles, and gaming influencers. Geo-target cities with vibrant gaming communities.
• Start a YouTube channel posting trailers, playthroughs, development vlogs, and teasers. Collaborate with influencers.
• Write developer blog posts with behind-the-scenes details to build hype and SEO.
• Promote on Reddit, Discord, and forums related to your game type. Engage authentically with these communities.
• Leverage affiliate marketing partnerships with streamers, sites, and influencers.
• Retarget website visitors with ads and special offers via platforms like Facebook Pixel.
• Optimize for keywords gamers are searching like your genre and platform.

Traditional Marketing

For traditional marketing:

• Attend local gaming conferences and tournaments to demo games and network.
• Distribute flyers and brochures at comic book shops, gaming cafes, and electronics stores.
• Take out ads in gaming magazines and websites tied to your target genre.
• Seek reviews and press via personalized outreach to journalists.
• Utilize billboards, radio spots, and TV ads in specific markets where your game has traction.
• Sponsor esports tournaments and college gaming events to get products used competitively.

Amplify word-of-mouth and digital campaigns through targeted real-world promotion. Analyze data to refine strategies and maximize ROI across channels. Consistent marketing is table stakes for indie studios hoping to break through the noise. Leverage the uniqueness of your games across both digital and traditional avenues to build a fanbase.

14. Focus on the Customer

Providing exemplary customer service must be a priority, even for indie game developers. How you support players builds loyalty that fuels referrals and reviews.

Some ways to improve customer focus in your own video game company include:

• Be available to respond to questions and feedback emails swiftly. A quick turnaround on tech support tickets fixes issues before frustration sets in.
• Monitor forums and social channels to address concerns transparently. Publicly thank users for constructive critiques that improve games.
• Make yourself accessible through Discord chats and Reddit AMAs. Let players feel heard by the studio leadership directly.
• When mistakes happen, offer sincere apologies and make things right. If a release is buggy, gift players free in-game items or currency to rebuild goodwill.
• Surprise inactive users with comeback offers if they churn. Welcome them back warmly if they return.
• Consider refunding dissatisfied purchasers, even if not obligated. Losing some revenue prevents greater reputation damage.
• Thank players who leave positive reviews or endorsements. Spotlight their content across your social channels.
• Service with empathy, patience, and understanding. Gamers are real people, not just metrics.

By providing support as dedicated as the development team, you earn trust. Players become advocates who drive ongoing sales through referrals. They quickly forgive missteps because the relationship is valued. Make customer service not just a cost center, but a profit center, through earned loyalty.

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How To Write a Business Plan for Video Game in 9 Steps: Checklist

By alex ryzhkov, resources on video game.

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan
• SWOT Analysis
• Business Model
• Marketing Plan

Video games have become a multibillion-dollar industry, with the popularity of pay-to-play and buy-to-play models skyrocketing in the US. The ease of access and the ability for developers to generate consistent revenue streams make this business model a lucrative option for those looking to enter the industry. In this blog post, we will walk you through nine essential steps to help you write a business plan for your video game venture, ensuring its success in this thriving market.

Before diving into the nitty-gritty of business planning, let's take a moment to appreciate the rapid growth of the video game industry. According to recent statistics, the global video game market is valued at $159.3 billion in 2020, with a projected growth rate of 9.3% annually. This staggering growth indicates a vast potential for success in this industry, making it an enticing opportunity for aspiring game developers.

To create an effective business plan for your video game, you need to start by identifying your target market and conducting thorough market research. Understanding your audience's preferences, needs, and demands will allow you to tailor your game to their specific interests, giving you a competitive edge in the market.

It's crucial to define your unique selling proposition and competitive advantage to differentiate your game from the sea of existing titles. Analyzing potential competitors will also provide valuable insights into their strategies and help you determine how you can stand out in the crowded gaming landscape.

With a clear vision, mission, and objectives in mind, you can establish a strong foundation for your business. Conducting a feasibility study and assessing the financial viability of your venture will ensure that your game has a solid chance of success.

In addition to determining the required startup costs and securing necessary funding, developing a detailed marketing and sales strategy will help you effectively promote and sell your game. Crafting a comprehensive business plan outline will provide a roadmap for your venture, outlining key milestones, strategies, and financial forecasts.

Lastly, gathering necessary industry insights and staying updated on the latest trends will give you a competitive advantage, allowing you to adapt your business plan to the ever-evolving gaming landscape.

With these nine steps as your checklist, you are well on your way to creating a comprehensive business plan for your video game. By targeting the right market, establishing a unique selling proposition, and staying abreast of industry trends, you can navigate the exciting realm of video game development with confidence.

Identify Target Market And Conduct Market Research

Identifying and understanding your target market is crucial when developing a business plan for a video game. It helps you tailor your product to the right audience, ensuring that your game is appealing and meets their needs. To identify your target market, you must conduct thorough market research to gather valuable insights about the gaming industry.

Start by defining the demographics of your target audience, including age, gender, location, and interests. This information will help you understand who your game is aimed at and how to effectively market it to them. Additionally, consider their gaming preferences and behaviors to ensure that your game aligns with their interests and playing habits.

Market research goes beyond understanding your target audience. It also involves analyzing the current gaming market landscape and identifying potential trends and opportunities. Look at the current market size, growth potential, and any emerging niches or gaps that your game can fill. This will help you position your game effectively, ensuring its competitiveness in the market.

Tips for conducting market research:

• Utilize online surveys, focus groups, and interviews to gather data directly from potential players.
• Study market reports, industry publications, and gaming forums to stay updated on industry trends and players' preferences.
• Participate in gaming conventions and events to network with industry experts and potential customers.
• Monitor social media platforms and online communities to gather insights and feedback from gamers.
• Stay updated on competitor activities and analyze their target audience to identify gaps and opportunities.

By identifying your target market and conducting thorough market research, you can ensure that your video game business plan is well-informed and targeted. This will increase the chances of your game's success in the competitive gaming industry.

Define Your Unique Selling Proposition and Competitive Advantage

Before diving into creating a business plan for your video game, it's crucial to define your unique selling proposition (USP) and competitive advantage. Your USP is what sets your game apart from others in the market, and your competitive advantage is what gives you an edge over your competitors.

To define your USP and competitive advantage, consider the following:

• Research your target market: Understanding the needs, preferences, and expectations of your target audience is essential in determining your USP. Conduct market research to identify gaps in the market and uncover what your potential customers are looking for in a video game.
• Analyze your competitors: Study your competitors to identify their strengths and weaknesses. This analysis will help you identify opportunities to differentiate your game and provide a unique value proposition to your target audience.
• Identify your game's unique features: Take a closer look at the features, gameplay mechanics, graphics, storytelling, or any other elements that make your game stand out. Emphasize these unique aspects when defining your USP.
• Showcase your game's benefits: Clearly communicate the benefits that players will experience by choosing your game over others. Whether it's immersive gameplay, captivating storytelling, or innovative mechanics, highlight how these benefits enhance the gaming experience.
• Fulfill a specific need: Identify a need or problem that your game addresses. Whether it's providing a new genre or catering to a niche audience, focus on how your game satisfies this specific need in the market.
• Always keep your target audience in mind when defining your USP. Understand what they are looking for and tailor your game's unique features and benefits accordingly.
• Stay up-to-date with the latest trends and emerging technologies in the gaming industry. Incorporating these trends into your game can give you a competitive edge.
• Regularly seek feedback from potential players or beta testers to understand their preferences and improve your game's unique selling proposition.
• Continuously analyze and monitor your competitors' strategies to stay ahead of the game and adjust your USP if needed.

By defining your unique selling proposition and competitive advantage, you will not only differentiate your game from others but also create a strong foundation for your business plan. This step is crucial for showcasing the value of your game to potential investors, partners, and customers.

Identify And Analyze Potential Competitors

Identifying and analyzing potential competitors is a crucial step in developing a successful business plan for a video game. By understanding the competitive landscape, you can gain valuable insights into existing products, market trends, customer preferences, and potential opportunities for differentiation.

When identifying potential competitors, it is important to look beyond direct competitors who offer similar video game products. Broaden your scope to include indirect competitors who may provide alternative entertainment options or cater to the same target market. This will give you a comprehensive view of the competitive landscape.

Once you have identified your potential competitors, it is essential to analyze their strengths, weaknesses, and market positioning. This analysis will help you identify opportunities to differentiate your video game and develop a competitive advantage.

• Market Positioning: Assess how your potential competitors position themselves in the market. Identify their target audience, pricing strategies, marketing tactics, and unique selling propositions. This will help you understand how you can differentiate your video game and attract customers.
• Product Features: Analyze the features, gameplay mechanics, and overall quality of your competitors' video games. This analysis will help you identify any gaps in the market that you can capitalize on or find ways to enhance your own game to offer a superior experience.
• Customer Reviews and Feedback: Consider researching customer reviews, forums, and social media discussions to gain insights into what customers like or dislike about your potential competitors' video games. This will help you understand customer preferences and identify areas where you can improve upon existing offerings.
• Competitor's Business Strategies: Investigate the business strategies employed by your potential competitors. Look at their distribution channels, partnerships, marketing campaigns, and pricing strategies. Understanding their strategies will allow you to develop effective countermeasures and identify potential collaboration opportunities.
• Competitor's Financial Performance: Research the financial performance of your potential competitors to assess their stability and growth potential. Look for indicators such as revenue growth, profitability, market share, and investments. This information will help you understand the competitive landscape and make informed decisions about your own financial projections.
• Consider conducting SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis for each potential competitor to gain a comprehensive understanding of their position in the market.
• Regularly monitor the competitive landscape to stay updated on new product releases, marketing strategies, and market trends that may impact your video game's success.
• Always strive to differentiate your video game by offering unique features, innovative gameplay mechanics, or exceptional customer service to stand out from the competition.

Establish A Clear Business Vision, Mission, And Objectives

Establishing a clear business vision, mission, and objectives is a crucial step in creating a successful business plan for your video game. These elements will not only guide your decision-making process but also serve as a solid foundation for your company's identity and future growth. Here are some key points to consider when defining your vision, mission, and objectives:

• Define your vision: Your vision should showcase your long-term aspirations and the direction you want your video game business to take. It should outline your ultimate goals and paint a picture of what success looks like for your company.
• Create a mission statement: Your mission statement communicates the purpose and values of your video game business. It should encapsulate the unique value you aim to provide to your target market and how you plan to do so. It should be concise, memorable, and inspiring.
• Establish clear objectives: Objectives are specific, measurable, and time-bound goals that serve as milestones towards achieving your overall mission. These objectives may include revenue targets, user acquisition goals, or product development milestones.
• When defining your vision, think big and aim for long-term impact in the video game industry.
• Ensure your mission statement aligns with your target market's needs and desires.
• Set SMART (Specific, Measurable, Achievable, Relevant, Time-bound) objectives to ensure clarity and focus.
• Regularly review and update your vision, mission, and objectives as your business evolves and market conditions change.

Establishing a clear business vision, mission, and objectives is essential for not only guiding your company's strategic decisions but also for attracting investors, partners, and potential customers. Take the time to define these elements carefully, as they will shape the overall direction and success of your video game business.

Conduct A Feasibility Study And Assess The Financial Viability Of The Venture

Before diving too deep into the development of your video game business, it is crucial to conduct a feasibility study and assess the financial viability of your venture. This step will help you determine whether your business idea is practical and whether it has the potential to generate the desired profits.

• 1. Research the market potential: Begin by researching the current market for video games and assess the demand for your specific genre or concept. Understand who your target audience is and whether they are likely to purchase and engage with your game.
• 2. Evaluate the competition: Analyze the existing competitors in the video game industry and determine how your game will stand out. Assess their strengths and weaknesses to find gaps in the market that you can capitalize on.
• 3. Calculate the costs: Determine the financial resources required to develop, market, and distribute your game. Consider factors such as development tools, licensing fees, personnel costs, marketing expenses, and any other overhead costs that may arise.
• 4. Estimate revenue potential: Forecast the potential revenue that your game can generate. Consider different revenue streams such as game sales, downloadable content, microtransactions, and potential partnerships or collaborations that may contribute to your bottom line.
• 5. Analyze risks and challenges: Identify any potential risks or challenges that may impact the financial viability of your venture. This could include changes in market trends, legal issues, competition, or any other factors that could hinder the success of your game.
• Collaborate with industry experts or consultants who can provide insights and guidance during the feasibility study process.
• Conduct surveys or focus groups to gather feedback from potential customers to validate your market research.
• Consider creating a prototype or demo version of your game to showcase its potential and attract potential partners or investors.
• Regularly revisit and update your feasibility study as market trends and conditions may change over time.

Determine The Required Startup Costs And Secure Necessary Funding

One of the most crucial steps in writing a business plan for a video game is determining the required startup costs and securing the necessary funding. This will require a careful analysis of all the expenses involved in developing and launching your game, as well as a comprehensive plan for obtaining the funding needed.

To begin, identify all the costs associated with developing and launching your video game. This includes expenses such as hiring a development team, purchasing software and hardware, licensing fees, marketing and advertising expenses, and any other operational costs. It is essential to have a clear understanding of the financial requirements of your venture.

Once you have identified the startup costs, the next step is to assess the financial viability of your video game. This involves evaluating the potential revenue streams and estimating the return on investment. It is important to have realistic projections and understand the market demand for your game.

After assessing the financial viability, you will need to determine the funding sources for your video game. There are various options available, including self-funding, seeking investors, applying for grants or loans, or crowdfunding. It is advisable to explore multiple avenues and consider the pros and cons of each option.

• Prepare a detailed budget that includes all the anticipated expenses and revenue projections.
• Consider seeking guidance from industry experts or consultants who specialize in video game funding and investment.
• Research and apply for grants or funding programs specific to the gaming industry.
• Build a compelling pitch deck or business plan to attract potential investors or lenders.
• Consider leveraging crowdfunding platforms to engage with your target audience and raise funds.

Determining the required startup costs and securing necessary funding is a critical step in the business planning process for a video game. It requires careful analysis, research, and strategic thinking to ensure financial viability and long-term success.

Develop A Detailed Marketing And Sales Strategy

A successful video game requires not only a great product but also an effective marketing and sales strategy to reach your target audience and generate sales. Developing a detailed marketing and sales strategy will help you identify the most effective ways to promote and sell your game. Here are some important steps to consider:

• Identify your target audience: Clearly defining your target market is essential for marketing and sales success. Determine the demographic, psychographic, and behavioral characteristics of your ideal customers, and tailor your marketing efforts accordingly.
• Create a compelling value proposition: Clearly communicate the unique features and benefits of your video game to potential customers. Highlight why your game stands out from the competition and why they should choose to purchase and play it.
• Choose the right marketing channels: Consider the most effective channels to reach your target audience. This may include online advertising, social media marketing, influencer partnerships, content marketing, public relations, and more. Focus on channels that are popular among your target audience and align with your marketing goals.
• Develop a marketing budget: Allocate a portion of your overall budget to marketing and sales activities. Determine how much you can afford to spend on advertising, promotions, events, and other marketing initiatives, while ensuring a return on investment.
• Plan promotional campaigns: Create a calendar of planned promotions, events, and sales to drive interest and demand for your game. Consider offering discounts, bundling options, or limited-time offers to incentivize purchases and generate a sense of urgency.
• Built a strong online presence: Establish a professional website and engaging social media channels to showcase your game and interact with your audience. Regularly update your online platforms with relevant content, teasers, trailers, and user testimonials to build excitement and strengthen your brand.
• Forge partnerships and collaborations: Identify potential partners in the gaming industry, such as influencers, gaming communities, or other game developers, to collaborate on promotional activities. These partnerships can help expand your reach and credibility among your target audience.
• Utilize data analytics tools to track and measure the effectiveness of your marketing campaigns. This will help you optimize your strategies and allocate resources more efficiently for future efforts.
• Consider offering a free demo or trial version of your game to allow potential customers to experience it before making a purchase. This can help generate interest and increase the likelihood of conversions.
• Stay updated with the latest trends and developments in the video game industry. Adapt your marketing and sales strategies to align with changing consumer preferences and emerging technologies.

Create A Comprehensive Business Plan Outline

When it comes to starting a video game business, having a well-structured and comprehensive business plan is essential. This document will serve as a roadmap for your venture, outlining your goals, strategies, and financial projections. Here is a step-by-step guide on how to create a comprehensive business plan outline.

1. Executive Summary: Begin your business plan with an executive summary that provides an overview of your company, its mission, and the key highlights of your plan. This section should grab the reader's attention and concisely summarize your entire plan.

2. Company Description: In this section, provide a detailed description of your video game business, including its legal structure, location, and any unique selling points that differentiate you from competitors.

3. Market Analysis: Conduct a thorough analysis of your target market, identifying its size, demographics, and trends. Include information about the demand for video games, the competition landscape, and any potential barriers to entry.

4. Products and Services: Describe the video games and services you will offer, highlighting their unique features, gameplay mechanics, and any additional content or DLC that will be available.

5. Marketing and Sales Strategy: Outline your marketing and sales tactics, including how you will promote your video games, reach your target audience, and generate revenue. Consider incorporating online advertising, social media campaigns, and partnerships with influencers or gaming communities.

6. Organization and Management: Provide an overview of your organizational structure and the key members of your management team. Include their qualifications, roles, and responsibilities to demonstrate their ability to successfully execute your business plan.

7. Financial Projections: Present comprehensive financial projections, including sales forecasts, operational expenses, and profitability analysis. This section should demonstrate the financial viability of your business and its potential for growth.

8. Funding Request: If you require funding to launch or expand your video game business, clearly state your funding needs in this section. Provide details about how much funding you are seeking, how it will be utilized, and any potential sources of financing.

9. Appendix: Include any supporting documents or additional information that adds credibility to your business plan. This may include market research data, legal documents, resumes of key team members, and any other relevant materials.

• Use clear and concise language throughout your business plan to ensure it is easily understandable for potential investors or lenders.
• Include visual elements such as charts, graphs, or mock-ups of your video game to make your plan more engaging and visually appealing.
• Regularly update and revise your business plan as your video game business evolves and new opportunities arise.
• Seek feedback from industry experts or mentors to ensure your business plan is accurate, realistic, and compelling.

Creating a comprehensive business plan outline is an essential step in setting a solid foundation for your video game business. It will help guide your decision-making, attract potential investors, and serve as a reference point for your future endeavors. Invest the time and effort needed to develop a well-structured and compelling plan, and your chances of success will greatly increase.

Gather Necessary Industry Insights And Trends

Gaining a deep understanding of the video game industry is crucial for the success of your business plan. By gathering necessary industry insights and staying updated on the latest trends, you can make informed decisions and stay ahead of the competition. Here are some key steps to gather the necessary industry insights and trends:

• Stay informed through industry publications and websites
• Subscribe to industry newsletters and forums
• Follow influential game developers and industry experts on social media
• Attend industry conferences and events
• Participate in online gaming communities and engage with players
• Regularly read industry publications such as Game Developer Magazine and Gamasutra to stay updated on the latest industry news and trends.
• Join online forums or communities specific to video game development to engage in discussions and gain insights from experienced professionals.
• Participate in game jams or hackathons to connect with other developers and learn about innovative ideas shaping the industry.
• Follow influential game developers and industry leaders on social media platforms like Twitter and LinkedIn to gain insights into their strategies and stay updated on industry conversations.
• Networking at industry conferences and events can provide invaluable opportunities to meet potential partners, investors, and industry veterans who can offer insights and guidance.

By actively gathering industry insights and staying informed about relevant trends, you can ensure that your business plan is up-to-date and aligned with the current market landscape. This knowledge will help you make informed decisions, adapt to changes, and ultimately increase the chances of success for your video game venture.

In conclusion, writing a business plan for a video game requires careful analysis and planning. By following the steps outlined in this checklist, you can ensure that your business plan is comprehensive and aligned with industry trends and insights. Understanding your target market, defining your unique selling proposition, and assessing the financial viability of your venture are crucial steps in building a successful video game business. Additionally, developing a detailed marketing and sales strategy, securing necessary funding, and creating a comprehensive business plan outline provide a solid foundation for your business to thrive. With the growing popularity of the 'pay-to-play' model and the potential for additional revenue streams through DLC and microtransactions, the video game industry offers exciting opportunities for entrepreneurs and developers.

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How to Start a Video Game Company

Video game businesses design and program video games played on consoles, PCs, cell phones, and virtual reality devices. These games are purchased online and in brick-and-mortar stores. Video games often prove quite powerful in terms of providing joy, boosting confidence, improving hand-eye coordination, and connecting people (particularly with the advent of online gaming).

Learn how to start your own Video Game Company and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services .

Start a video game company by following these 10 steps:

• Plan your Video Game Company
• Form your Video Game Company into a Legal Entity
• Register your Video Game Company for Taxes
• Open a Business Bank Account & Credit Card
• Set up Accounting for your Video Game Company
• Get the Necessary Permits & Licenses for your Video Game Company
• Get Video Game Company Insurance
• Define your Video Game Company Brand
• Create your Video Game Company Website
• Set up your Business Phone System

We have put together this simple guide to starting your video game company. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

• What are the startup and ongoing costs?
• Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Video Game Company Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability .

It's very important to secure your domain name before someone else does.

Want some help naming your video game company?

Business name generator, what are the costs involved in opening a video game company.

The business requires numerous computers, computer monitors, specialized computer software, printers, video game consoles, employees, insurance, and a facility to create the games. Plan on investing tens of thousands of dollars in the initial equipment and facility. However, if you plan on launching a video game business from your home, apartment or other space without the assistance of a staff, it is possible to create a game with a high-powered computer and specialized software. Though this approach will save plenty of money, it will prove to be a Herculean effort unless you have extensive experience making video games.

What are the ongoing expenses for a video game company?

Hardware and software must be replaced and updated. Budget at least $200 to 500 per month for hardware replacements and software upgrades. Plan on spending several hundred dollars per month on utilities, office sundries, and high-speed internet. Employees who work on various parts of the game will command a salary between $40,000 and $100,000 or more per year. A manager, marketing expert and accountant will command a yearly salary of $30,000 to $60,000. A receptionist and beta testers will earn $8 to $15 per hour.

Who is the target market?

The target market is avid gamers. Everyone from kids to middle-aged adults play video games. Millennials are especially passionate about video games. It makes sense to target these young adults as they have enough discretionary income to purchase video games on a regular basis.

How does a video game company make money?

This business makes money by creating fun and intriguing video games for video game consoles, PCs and arcades. These games are sold to the masses. There is also the possibility of generating money through merchandising, like creating statuettes, T-shirts, etc.

Video games typically cost between $19.99 and $69.99. In general, high-quality video games are sold for $49.99 to $59.99 when brand new.

How much profit can a video game company make?

This type of business has the potential to make hundreds of millions of dollars. Video games have never been more popular. The rise of online gaming has made video games that much more appealing to the masses. The profit potential is unlimited.

How can you make your business more profitable?

Give gamers the option of purchasing in-game upgrades. As an example, Activision Blizzard has made millions through in-game upgrades without investing a considerable amount of money in developing additional games or extensive programming for existing games. It is also possible to establish agreements with console providers to secure a portion of the proceeds stemming from fees paid for online play.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your video game company is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a video game company. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

Trademark & Copyright Protection

If you are developing a unique product, concept, brand, or design, it is prudent to protect your rights by registering for the appropriate trademarks and copyrights.

Learn more about trademark and copyright protection

The nature of legal requirements in distance education is ever changing, especially in regards to copyright laws. Here is a frequently updated resource, which can help keep you aware of the legal requirements .

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Video Game Company needs and how much it will cost you by reading our guide Business Insurance for Video Game Company.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a video game company

Connect to prospective game buyers through the channels they are most frequently exposed to. Most gamers are active on the web including social media, YouTube, and game streaming sites. Advertise on these sites and services. Some video game companies have also found success advertising with TV commercials and magazine ads. The promotional method your company settles on will ultimately hinge on the type of game you are attempting to sell. Perform market research to determine the appropriate mediums to best connect with video game players who are most likely to be interested in the particular video game(s) your company creates.

How to keep customers coming back

The best way to attract and retain customers is to create a high-quality video game that proves enjoyable for a long period of time. Plenty of video game players develop an allegiance to specific game-making companies based on their enjoyment of the company's initial games. Strive to develop a deep and meaningful connection with gamers by providing them with enjoyable content and they will become loyal customers. Also, consider offering a free download of one of your game's stages or levels to whet consumers' appetites.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

If you are looking for a way to entertain and provide people with an opportunity to enjoy a shared experience, starting a video game business will prove quite rewarding. Video games bring people together in-person for fun and exciting gaming experiences. They also connect people by way of online gaming experiences. It will certainly help to have a background in electrical engineering, design and/or computer science if you decide to start a video game business.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a video game company?

Each group of specialists works on its unique portion of the game(s). Designers focus on generating aesthetically pleasing game graphics. Programmers write the game's code. Writers create the game's storylines. Testers play the game in-depth to ensure it doesn't have bugs (flaws). The video game company owner often serves as the overarching manager, delegating work and making executive decisions. Meetings are quite common to ensure each group of specialists is on the same page as the game progresses.

What are some skills and experiences that will help you build a successful video game company?

Making video games is a complicated endeavor. It is not enough to simply enjoy video games. The best video game company entrepreneurs have a genuine interest in computer programming, electrical engineering, design, and script writing. Ideally, the business owner will have experience in each of these realms. It will also help to have a business background in which the entrepreneur has established and nurtured relationships with other professionals. The relationships you form in this business will go a long way in determining your company's success.

What is the growth potential for a video game company?

The video game industry is growing at quite the rapid pace. Video games are incredibly popular due to recent improvements in graphics, the rise of online gaming, and the arrival of virtual reality technology. Build a successful game and your company will have the potential to grow quite rapidly. The key is to make a name for your company with one hit game that builds a fan base and generates momentum toward additional titles.

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a video game company?

Network with video game industry experts before launching your business. Find out the exact software and hardware necessary to make state-of-the-art video games. Ideally, you will not attempt to wear numerous "hats". Hire true professionals who have an educational and professional background in various aspects of video game creation, from designing game graphics to programming, physics, script writing and beyond.

Do not assume your first game will be a hit. Oftentimes, it takes years to develop a high-quality video game that reaches a mainstream tipping point. Stick with the business, give your team time to perfect their craft and you will eventually succeed in this competitive business. Above all, the games your company creates should be highly unique. If they are similar to other offerings, generating sales will likely prove difficult.

How and when to build a team

A team is essential to your video game company's success. Even if you are a “jack of all trades” in the context of game-making, creating a game will prove much easier if you add specialists. Hire game designers, programmers and writers to get the company off the ground. You can add beta testers, a manager, an accountant, a marketing expert, a receptionist and other professionals as time progresses.

Useful Links

Industry opportunities.

• International Game Developers Association
• Entertainment Software Association
• Higher Education Video Game Alliance

Real World Examples

• Avalanche Studios

Further Reading

• Five Realistic Steps To Starting A Game Development Company
• Advice From a Successful Video Game Company Owners
• Profile on a Successful Company
• Guide to Entering the Industry

Have a Question? Leave a Comment!

Start a Video Game Company

Unleashing Your Inner Creator: Building Immersive Worlds in a Video Game Company

VIDEO GAME COMPANY

Related business ideas, discover your perfect domain, video game mini business plan, business idea: video game company, expected percent margin:, earnings expectations:, actions to hit those numbers:, game development:, marketing and customer acquisition:, sales and monetization:, cost control:, business operations:, not what you had in mind here are more ideas, grab your business website name, step 1: determine if starting a video game company is right for you, breakdown of startup expenses, breakdown of ongoing expenses, examples of ways to make money, step 2: naming the business, researching the name, registering the name, finalizing the name, step 3: establishing a business structure, registering the business, obtaining licenses and permits, establishing a bank account, step 4: obtaining licenses and permits, applying for licenses and permits, paying for licenses and permits, receiving licenses and permits, step 5: creating a business plan, outlining goals and objectives, establishing a budget, step 6: securing funding, preparing a pitch, negotiating terms, step 7: setting up the office, choosing the right location, purchasing necessary equipment, step 8: hiring employees, establishing a team, setting up a workplace, establishing a salary structure, step 9: marketing the business, leveraging social media, advertising, public relations, analyzing results, explore more categories, take the next steps.

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How to Start a Video Game Company

Back to All Business Ideas

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on March 4, 2022 Updated on May 14, 2024

Investment range

$6,550 - $12,100

Revenue potential

$60,000 - $290,000 p.a.

Time to build

3 – 6 months

Profit potential

$53,000 - $88,000 p.a.

Industry trend

The US is home to millions of gamers, blasting away everyday on top titles like Assassin’s Creed, Grand Theft Auto, Minecraft and Animal Crossing. Video games are booming and will soon be a $300 billion global industry. If you love gaming and have programming experience, you could start your own video game company, give gamers endless hours of fun and grab a sliver of that massive market. Who knows, you might even grow into the next Activision Blizzard or Epic Games. 

Getting there will take a lot of hard work and a good deal of business knowledge. This step-by-step guide can’t help you with the first part, but it does provide all the insight and information you’ll need to develop and launch your own successful video game company.

Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.

Form your business immediately using ZenBusiness LLC formation service or hire one of the Best LLC Services .

Step 1: Decide if the Business Is Right for You

Pros and cons.

Starting a video game company has pros and cons to consider before deciding if it’s right for you. 

• Flexibility – Work from home, when you want
• Good Money – Video games have massive global appeal
• Fun! – Create inventive and enjoyable games
• Experience Required – Online courses are not enough to start a company
• Saturated  Market – Market is full of video game firms

Video game industry trends

Industry size and growth.

• Industry size and past growth – The US video game industry is worth $95.4 billion and has seen strong 13% annual growth for five years.(( https://www.ibisworld.com/industry-statistics/market-size/video-games-united-states/ )) 
• Growth forecast – The global video game market is projected to expand an impressive 80% by 2027, reaching $315 billion.(( https://www.mordorintelligence.com/industry-reports/global-gaming-market )) 
• Number of businesses – In 2022, more than 55,000 video game companies are operating in the US.(( https://www.ibisworld.com/industry-statistics/number-of-businesses/video-games-united-states/ ))
• Number of people employed – In 2022, the video games industry employed 298,077 people in the US.(( https://www.ibisworld.com/industry-statistics/employment/video-games-united-states/ ))

Trends and challenges

Trends in the video games industry include:

• Cloud gaming and streaming are growing fast, and most games today are downloaded or accessed online rather than distributed in physical form . About half of games are “PC games” instead of “console games”, but even Nintendo Switch games are downloaded rather than physically purchased. 
• Steam, a platform to play games online, is another new and popular option for gamers who are moving away from console gaming.
• Mobile gaming has exploded in recent years, accounting for about half of all gaming revenue in 2020. 

Challenges in the video games industry include:

• Fears about the impact violent games have on children persist. There have been many studies on the topic with mixed results, and other studies have shown that gaming leads to isolation and poor academic performance. 
• With over a million games already in existence, coming up with brilliant new game ideas gets more difficult every day. 

Demand hotspots

• Most popular states – The most popular states for game developers are Oregon, Washington, and Massachusetts.(( https://www.zippia.com/game-developer-jobs/best-states/#texas ))
• Least popular states – The least popular states for game developers are Oklahoma, Hawaii, and Iowa.

What kind of people work in Video Games?

• Gender – 24% of video game developers are female, while 76% are male.(( https://www.zippia.com/video-game-developer-jobs/demographics/ ))
• Average level of education – The average video game developer has a bachelor’s degree.
• Average age – The average video game developer in the US is 43.2 years old.

How much does it cost to start a video game business?

Startup costs for a video game company range from $6,500 to about $12,000. Costs include a high-powered computer and game development software.

You can earn a bachelor’s degree in game development online from schools like Southern New Hampshire University . Of course, that will take several years and cost thousands of dollars. You can also take inexpensive courses on sites like Udemy and Coursera. Most courses cost less than $50 and often are self study. You could probably take several courses for a few hundred dollars and finish in less than six months. 

If you want to protect the intellectual property of your games by getting a patent, each patent will cost you about $25,000.

How much can you earn from a video game business?

The average price of a video game is about $50, and the profit margin on actual physically purchased games is about 40%. If you create games to be digitally downloaded, your profit margin will be 90%.

You might, however, want to consider starting with an online game costing about $4, with a profit margin of 90%. Your only costs to develop the game are your time after the cost of the software that you purchase. 

In your first year or two, you could work from home and have 40 players a day, bringing in nearly $60,000 in annual revenue. This would mean almost $53,000 in profit, assuming that 90% margin. As your brand gains recognition, you could build more games and have 200 players a day. At this stage, you’d probably rent out an office and hire staff, including game designers, reducing your profit margin to 30%. Still, with annual revenue of more than $290,000, you’d make a tidy profit of $88,000.

What barriers to entry are there?

There are a few barriers to entry for a video game company. Your biggest challenges will be:

• Extensive skills are required to make video games
• Finding the best game development software

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Step 2: hone your idea.

Now that you know what’s involved in starting a video game company, it’s a good idea to hone your concept in preparation to enter a competitive market.

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research video game companies online to examine their products, price points, and customer reviews, as well as what sells best. You’re looking for a market gap to fill. For instance, maybe the market is missing a video game company that targets women.

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as sports video games, mobile games, or puzzle games.

This could jumpstart your word-of-mouth marketing and attract clients right away.

What? Determine what kind of video games you’ll develop

You may want to start by offering a free game, or at least a game with a free trial. You also need to decide the format of the games you want to develop – PC, mobile, or downloadable to a console. You also need to decide what genre of games to develop – sports, action, zombie games. The options are endless.

How much should you charge for video games?

The average price of an online video game is $3 to $4. You should aim for a profit margin of about 90%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be gamers of all ages. You can find younger game players on TikTok and Instagram, and older gamers on Facebook. But the best way to reach out to gamers is probably on online discussion platforms like Steam’s discussion board.

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. Find commercial space to rent in your area on sites such as Craigslist , Crexi , and Instant Offices .

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Video Game Company Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “video games” or “games”, boosts SEO
• Name should allow for expansion, for ex: “Arcadia Entertainment” over “eSports Interactive Games”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Find a Domain

Powered by GoDaddy.com

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. 

Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Video Game Company Business Plan

Here are the key components of a business plan:

• Executive Summary: Present a concise overview of your video game company, emphasizing its focus on developing engaging, innovative games for various platforms.
• Business Overview: Describe your company’s specialization in video game development, including genres, platforms (like PC, consoles, or mobile), and player experiences.
• Product and Services: Detail the types of games you plan to develop, such as action, strategy, or educational games, and additional services like game updates or community management.
• Market Analysis: Assess the current video game market, identifying trends, target demographics, and consumer preferences in gaming.
• Competitive Analysis: Compare your games and development approach to other gaming companies, focusing on what sets your games apart, like unique gameplay mechanics, storylines, or graphics.
• Sales and Marketing: Outline your strategy for marketing and selling your games, including digital distribution channels, partnerships with publishers, or participation in gaming conventions.
• Management Team: Highlight the qualifications and experience of your team, especially in game development, design, and project management.
• Operations Plan: Describe the game development process, from concept and design to coding, testing, and release.
• Financial Plan: Provide an overview of financial aspects, including development costs, revenue models (like sales or subscriptions), and funding strategies.
• Appendix: Include supplementary documents such as game design documents, market research data, or partnership agreements to support your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to video game companies.

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your video game company will shape your taxes, personal liability, and business registration requirements, so choose wisely.

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC , which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have. 

Form Your LLC

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans : This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans : The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
• Government grants : A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Venture capital : Venture capital investors take an ownership stake in exchange for funds, so keep in mind that you’d be sacrificing some control over your business. This is generally only available for businesses with high growth potential.
• Angel investors: Reach out to your entire network in search of people interested in investing in early-stage startups in exchange for a stake. Established angel investors are always looking for good opportunities. 
• Friends and Family : Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding : Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal : Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a video game business. You might also try crowdfunding if you have an innovative concept. At some point, if your company is poised for high growth, you may be able to attract venture capital or angel investors.

Step 8: Apply for Video Game Company Licenses and Permits

Starting a video game business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your video game business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability : The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property : Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance : Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation : Provides compensation to employees injured on the job.
• Property : Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto : Protection for your company-owned vehicle.
• Professional liability : Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP) : This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business.

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.

You may want to use game development software, such as Unreal Engine , BuildBox , or GameMaker Studio , to develop your games.

• Popular web-based accounting programs for smaller businesses include Quickbooks , Freshbooks , and Xero . 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google.

Here are some powerful marketing strategies for your future business:

• Engage Influencers: Leverage the power of social media influencers to showcase your game. Collaborate with gaming influencers and streamers to create buzz, generate excitement, and reach a wider audience.
• Interactive Demos and Beta Testing: Offer interactive demos and beta testing opportunities to build anticipation and gather feedback. This not only involves the gaming community but also creates a sense of exclusivity and involvement.
• Strategic Partnerships: Form partnerships with other businesses in the gaming industry, such as hardware manufacturers, gaming accessory companies, or even esports organizations. Cross-promotions can significantly broaden your game’s reach.
• Community Building: Foster a strong online community around your game. Utilize forums, social media groups, and Discord channels to connect players, share updates, and create a loyal fan base that becomes your game’s advocate.
• Storytelling and Content Creation: Craft compelling stories around your game and its development. Share behind-the-scenes content, developer diaries, and engaging narratives to create a deeper connection with your audience.
• Participate in Gaming Events: Attend and showcase your game at gaming conventions, conferences, and events. This provides an excellent platform to interact with potential players, receive real-time feedback, and create a memorable presence.
• Targeted Advertising: Use targeted advertising on platforms like Google Ads and social media to reach specific demographics interested in your game genre. Tailor your ad content to highlight unique features and gameplay experiences.
• In-Game Events and Challenges: Create in-game events and challenges to keep players engaged. Encourage user-generated content, share highlights on social media, and reward participants to enhance community involvement.
• Localized Marketing: Tailor your marketing efforts to specific regions and cultural preferences. Localized campaigns, translations, and understanding regional gaming trends can make your game more appealing to diverse audiences.
• Leverage User Reviews: Encourage players to leave reviews and testimonials. Positive user reviews act as powerful endorsements, influencing potential players and building trust in the gaming community.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your video game company meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your video game business could be:

• Our sports games will make you the MVP
• You’ve never seen game graphics like this 
• The best games for gamer girls! 

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a video game business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in video games for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in video games. You’ll probably generate new customers or find companies with which you could establish a partnership.

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a video game business include:

• Designers – video game design
• Developers – develop the game technology
• General Manager – staff management, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.

Step 13: Run a Video Game Company – Start Making Money!

Video games are exploding, so if you’re a gamer with some programming experience, now is the perfect time to open your own game shop and ride the wave. You could start from home, launch with a free game, and build some buzz before going big. 

Now that you know what to do, it’s time to start designing games and begin your entrepreneurial journey to success!

• Video Game Business FAQs

Video games can be incredibly profitable, but the key is creating a hit game that stands out from the crowd and goes viral.

Starting a video game company can be challenging due to the highly competitive and rapidly evolving nature of the industry. It requires a significant investment in resources, including talent, technology, and funding, and a clear understanding of the market demand and trends.

Yes, it is possible to publish a game without a company, especially with the advent of digital distribution platforms such as Steam, App Store, or Google Play. However, forming a company can provide benefits such as liability protection, access to funding and resources, and the ability to establish a brand identity and reputation.

The duration of video game copyright varies depending on the country and the type of copyright protection. In the United States, video games are typically protected by copyright for 70 years after the death of the author or the last surviving author in the case of multiple creators.

The process of designing and developing a video game can involve several stages, including concept ideation, prototyping, pre-production, production, testing, and release. It typically involves a multidisciplinary team of professionals, such as game designers, programmers, artists, musicians, writers, and testers, who collaborate to create a compelling and engaging gaming experience.

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• Decide if the Business Is Right for You
• Hone Your Idea
• Brainstorm a Video Game Company Name
• Create a Video Game Company Business Plan
• Register Your Business
• Register for Taxes
• Fund your Business
• Apply for Video Game Company Licenses and Permits
• Open a Business Bank Account
• Get Business Insurance
• Prepare to Launch
• Build Your Team
• Run a Video Game Company - Start Making Money!

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Indie Game Studio Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Entertainment Sector

Do you want to start a game studio and need to write a plan? If YES, here is a sample indie game studio house business plan template & feasibility report.

If you are interested in the video games industry and you don’t have the capacity to attract and work with mainstream video games publishers, the good news is that you can still start a business in the industry. One of such businesses is to start an indie game studio.

Indie games are developed by individuals, small teams, or small independent companies that are often specifically formed for the development of one specific game. Typically, indie games are smaller than mainstream titles.

Although you might not make a lot of money like mainstream video games publishing companies, but trust me, with the advent of social networking sites, there are loads of opportunities for you to make good money from this line of business. Below is a sample indie game studio business plan template that will help you write yours within record time.

A Sample Indie Game Studio Business Plan Template

1. industry overview.

In the video game industry, an independent (indie) game refers to games created by individuals or smaller development teams (small teams of video game developers) without the significant financial support of a video game publisher or other outside source.

Indie games studio is grouped under the social network game development industry a sub industry under the video games industry. Companies in this industry develop video games played on a social network platforms, including websites such as Facebook and smartphone applications.

The games developed within this industry are free to play and do not require the user to own any software or console to participate. Companies earn revenue through the sale of virtual goods within a game as well as through advertisements.

Since its inception, the Social Network Game Development industry has grown rapidly. Revenue is anticipated to grow at an annualized rate of 16.7 percent to $3.9 billion over the five years to 2018. The surging adoption of the internet and the popularity of social networks, including social networking websites and mobile apps, have driven revenue growth during the period. Industry revenue is anticipated to rise 14.3 percent in 2018 alone.

The industry’s growth has been stimulated by the emergence of new markets that have embraced social gaming. Social networks and their accompanying technology have placed gaming within reach of the average computer or mobile phone user.

As a result, consumers who have not previously played video games are beginning to participate According to a report published by IBISWorld, the Video Games industry has experienced strong returns to spending on industry products during the latter half of the five-year period to 2018.

While the emergence of low-cost games for mobile devices has slowed demand for other games and may continue to temper growth opportunities in the foreseeable future, industry revenue has picked up amid stronger sales in games, downloadable content (DLC), consoles and their corresponding products.

Over the five years to 2018, industry revenue increased at an annualized rate of 7.2 percent. In 2018, revenue is expected to total $43.7 billion. This growth was assisted by growing consumer incomes and the releases of the revised Xbox One and PlayStation 4, as well as the Nintendo Switch, throughout the five-year period.

The Social Network Game Development Industry is indeed a very large industry and pretty much thriving in all parts of the world especially in developed countries.

Statistics has it that in the united states of America alone, there are about 5,554 licensed and registered social network game development companies (indie games studios inclusive) responsible for employing about 12,593 employees and the industry rakes in a whooping sum of $4 billion annually with an annual growth rate projected at 16.7 percent between 2013 and 2018.

It is important to state that the companies holding the largest market share in the Social Network Game Development industry include Zynga Inc. and King Digital Entertainment PLC. The need to be creative with funding this business is key to the success of the business because indie games are smaller than mainstream video games.

Indie game developers are generally not financially backed by video game publishers, who are risk-averse and prefer “big-budget games”. Instead, indie game developers usually have smaller budgets, usually sourcing from personal funds or via crowdfunding.

2. Executive Summary

David Lance® Indie Game Studio, Inc. is a licensed indie game development studio that will be located in New Orleans – Louisiana. We have been able to secure a standard facility in a central and easy to locate area in New Orleans.

David Lance® Indie Game Studio, Inc. is going to be involved in the development of a wide genre of video games played on a social network platform, including websites such as Facebook and smartphone applications. The games developed are free to play and do not require the user to own any software or console to participate.

We conducted a thorough market research and feasibility studies and we were able to come to the conclusion that New Orleans – Louisiana is the right place to start our indie game development studio. Our client’s best interest would always come first, and everything we do is guided by our values and professional ethics. We will ensure that we hire professionals who are well experienced in the industry.

Our workers are going to be selected from a pool of talented and highly creative game developers in and around New Orleans – Louisiana and also from any part of the world as the business grows. We will make sure that we take all the members of our workforce through the required trainings that will position them to meet the expectation of the company and to compete with leading studios in the United States.

David Lance® Indie Game Studio, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a business, by actively participating in our communities and integrating sustainable business practices wherever possible.

We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely. David Lance® Indie Game Studio, Inc. is a private business that is owned and managed by David Lance and other team members. David in has a Degree in Computer Engineering from the University of Illinois.

This Arlington, Virginia native originally attended college to become a video game developer and he has Advanced Professional Certificate in Animation, Graphic Design or Illustration, Certified Professional Animators, Toon Boom Certification and 3D Modeling, Art & Animation Certification.

3. Our Products and Services

David Lance® Indie Game Studio, Inc. is established with the aim of maximizing profits in the social network game development Industry.

We want to compete favorably with the leading indie game studios in the United States of America which is why we have put in place a competent quality assurance team that will ensure that all our games surpass our customers’ expectations and match-up with international best practices.

We will work hard to ensure that David Lance® Indie Game Studio, Inc. is not just accepted in New Orleans – Louisiana but also throughout the United States of America and the all over the world via the internet. These are the services and products that will be made available to our clients;

• Developing a wide genre of video games and social network games such as puzzle games, role-playing and gambling games et al
• Maintaining social network games
• Expanding existing social network games
• Contracting third-party advertisers to reach target demographics

4. Our Mission and Vision Statement

• Our Vision of starting David Lance® Indie Game Studio, Inc. is to build a world – class indie game studio that will operate with no creative restrictions.
• We will be known for innovation, creativity, and artistic experimentation.
• Our mission for establishing David Lance® Indie Game Studio, Inc. is to build a world class indie game studio that will be known to produce top-notch video games and to become the number one choice for social networking sites.
• We want to build an indie game studio that can favorably compete with other leading brands in the industry.

Our Business Structure

David Lance® Indie Game Studio, Inc. intends starting small in New Orleans – Louisiana, but hopes to grow big in order to compete favorably with leading indie game studios in the industry both in the United States and on a global stage. We are aware of the importance of building a solid business structure that can support the kind of world class business we want to own.

At David Lance® Indie Game Studio, Inc. we will ensure that we hire people that are qualified, hardworking, creative, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders.

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the board of trustees of the company. In view of the above, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer
• Creative Director
• Human Resources and Admin Manager
• Sales and Marketing Executive

Video Games Designers and Developers

Client Service Executive

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
• Responsible for providing direction for the business
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization

Creative Director:

• Serves as project manager of the organization; works directly with employees
• Responsible for designing and approving concepts for video games production for client
• Develops strategic plan by studying technological and financial opportunities; presenting assumptions; recommending objectives.
• Maintains quality service by establishing and enforcing organization standards.
• Maintains professional and technical knowledge by attending educational workshops; reviewing professional publications/journals; establishing personal networks; benchmarking state-of-the-art practices; participating in professional societies.
• Makes certain that production and development department perform efficiently, coordinate employee efforts, and facilitate communications between management and staff
• Ensures that the organization works in line with international best practices.

Admin and HR Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defines job positions for recruitment and managing interviewing process
• Carries out staff induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversees the smooth running of the daily office activities.

Sales and Marketing Manager

• Manage external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer
• Identifies development opportunities; follows up on development leads and contacts
• Responsible for handling business research, market surveys and feasibility studies for clients
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Creates new markets cum businesses for the organization
• Empowers and motivates the sales team to meet and surpass agreed targets

Accountant/Cashier:

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting for one or more properties.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for David Lance® Indie Game Studio, Inc.
• Serves as internal auditor for David Lance® Indie Game Studio, Inc.
• Designing the layout of the game
• Making edits based on feedback
• Writing code to turn the designer’s concepts into a playable game
• Programming the game’s terrain
• Programming artificial intelligence for non-player characters within the game
• Creating code, editing code, incorporating artwork into the game, enabling online access and creating game menus
• Balance and adjust gameplay experiences to ensure the critical and commercial success of the product.
• Solicit, obtain, and integrate feedback from design and technical staff into original game design.
• Welcomes clients and visitors by greeting them in person or on the telephone; answering or directing inquiries.
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to potential clients when they make enquiries
• Receives parcels / documents for the company
• Distributes mails in the organization
• Handles any other duties as assigned by the human resources and admin manager.

6. SWOT Analysis

David Lance® Indie Game Studio, Inc. employed the services of a core professional in the area of business consulting and structuring to assist our organization in building a well – structured indie games studio that can favorably compete in the Video Games Development industry in the United States.

Part of what the team of business consultant did was to work with the management of our organization in conducting a SWOT analysis for David Lance® Indie Game Studio, Inc. Here is a summary from the result of the SWOT analysis that was conducted on behalf of David Lance® Indie Game Studio, Inc.;

Our core strength lies in the power of our team; our workforce. We have a team of creative and highly proficient animation artists, a team with excellent qualifications and experience in various niche areas in video games design and development.

Aside from the synergy that exists in our carefully selected workforce, we have some of the latest and efficient software apps and equipment and of course our work output and services will be guided by international best practices in the industry.

As a new indie game studio in New Orleans – Louisiana, it might take some time for our organization to break into the market and gain acceptance especially from high paying video games players in the already saturated Video games development industry; that is perhaps our major weakness. Another weakness is that we may not have the required cash to promote our business the way we would want to.

• Opportunities:

Video games players must have internet access to join social networks and play games. Increased broadband coverage translates to more potential industry customers and higher revenue. The number of broadband connections is also a good proxy for the number of households that join social networking websites.

A higher number of people connected to the internet drives increases in social network adoption. The number of broadband connections is expected to increase in 2018, representing a potential opportunity for the industry.

Leading into 2015, there was a concern that the rise of easy-to-use tools to create and distribute video games could lead to an oversupply of video games, this was termed the “indiepocalypse” which will likely pose a threat to us. With increase in the numbers of consumers that access social networks through their smartphones, game developers that optimize games for mobile devices can boost revenue by encouraging game use on the go.

An increased number of mobile internet connections facilitates this kind of use. The number of mobile internet connections is expected to rise over 2018, but it is quickly approaching saturation, which indicates a potential threat to the strong revenue growth of the past five years.

7. MARKET ANALYSIS

• Market Trends

If you conversant with happenings in this line of business, you will agree that the nature of indie game development had existed since the rise of the personal computer in the 1980s through shareware. Indie gaming saw a rise in mainstream popularity in the latter half of the 2000s, due to new online distribution methods and widely available game development tools.

The rise was also spurred on by several influential games released during the 2010s, such as Super Meat Boy, Fez, Braid, Minecraft, Undertale, and Cuphead. Indie development saw a resurgence in the early 2000s, principally driven by the availability of online distribution, allowing game developers to sell directly to players and bypassing limitations of retail distribution.

Software technologies used to drive the growth of the World Wide Web, like Adobe Flash, were available at low cost to developers, and provided another means for indie games to grow. The new interest in indie games led to middleware and game engine developers to offer their products at low or no cost, in addition to open source libraries and engines.

Dedicated software like GameMaker Studio and tools for unified game engines like Unity and Unreal Engine removed much of the programming barriers needed for a prospective indie developer to create these games.

Lastly, while direct online distribution helped indie games to reach players, the arrival of online digital game storefronts such as Steam and GOG.com further boosted awareness of indie games, as these storefronts allowed developers to publish, update, and advertise their games directly, and players to download the games anywhere.

8. Our Target Market

When it comes to indie games studio business, there are no exemption to who you can market your services to especially finished video games. Your video games can be marketed to a wide range of video game players especially via the internet.

In view of that, we have created strategies that will enable us reach out to a wide demography of video game players who we know will need our services. We have conducted our market research and survey and we will ensure that our indie game studio attracts of popular game players all across the globe via the internet.

Our Competitive Advantage

The competition in the video games development industry is getting stiffer by the day, you have to be highly creative and come up with creative games, concepts and good interface in order to survive in the industry. The video games development industry is indeed a profitable and at the same time a highly competitive industry.

We are quite aware that to be highly competitive in the video games development industry means that you are not only expected to be able to deliver consistent and highly creative video games, but you must be able to meet set targets.

Our Competitive Advantage lies in the power of our team; our workforce. We have a team of creative and highly proficient video games designers and developers, a team with excellent qualifications and experience in various niche areas in the video games development industry.

Aside from the synergy that exists in our carefully selected workforce, we have some of the latest and efficient software and equipment and of course our work output and services will be guided by international best practices in the industry.

Lastly, all our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and achieve all our business aims and objectives.

9. SALES AND MARKETING STRATEGY

• Sources of Income

David Lance® Indie Game Studio, Inc. is established with the aim of maximizing profits in the video games development industry and we are going to do all it takes to meet and surpass the expectations of our clients. David Lance® Indie Game Studio, Inc. will generate income by offering the following services and products;

• To fund the game, we will rely on or start a crowd-funding campaign, finding a publisher, and building community support while in development
• Developing a wide genre of video games and social network games such as puzzle games, role-playing games and gambling games et al

10. Sales Forecast

One thing is certain, there would always be social networking sites who would want an indie game development studio to develop games and host on their platforms, and of course there would always be game lovers looking for creative video games to play.

We are well positioned to take on the available market in the video games development industry, and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operation and grow our indie game studio to enviable heights.

We have been able to examine the indie games development market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projections for David Lance® Indie Game Studio, Inc., it is based on the location of our business and of course the wide range of our services and target market;

• First Fiscal Year (FY1): $250,000
• Second Fiscal Year (FY2): $400,000
• Third Fiscal Year (FY3): $750,000

N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Video game distribution is shifting towards online marketing. For developers, online marketing is much more profitable and more readily available than retail marketing, although distribution portals have been criticized for collecting a large portion of game revenue.

Our sales and marketing team will be recruited based on their vast experience in the Video games development industry and they will be trained on a regular basis so as to be well equipped to meet their set targets.

Our goal is to grow David Lance® Indie Game Studio, Inc. to become one of the leading indie game studios in the United States of America which is why we have mapped out strategies that will help us take advantage of the available market and grow to become a major force to reckon with not only in New Orleans – Louisiana but also in other cities in the United States of America.

David Lance® Indie Game Studio, Inc. is set to make use of the following marketing and sales strategies to attract clients and win animation videos contracts;

• Leverage on the internet to promote our video games
• Engage direct online marketing and internet digital distribution options of our games
• Encourage word of mouth marketing from loyal and satisfied people who have played our video games
• Market video games at various indie game trade shows, such as Independent Games Festival and IndieCade.
• Pitch our business at Indie Game Jam (IGJ) (Indie Game Jam (IGJ) is an annual event that allows indie game developers to experiment and present ideas without publisher restrictions).

11. Publicity and Advertising Strategy

We have been able to work with brand and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. We are set to become the number one choice in the whole of the New Orleans and beyond which is why we have made provisions for effective publicity and advertisement of our indie game studio.

Below are the platforms we intend to leverage on to promote and advertise David Lance® Indie Game Studio, Inc.;

• Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, YouTube, Google + et al to promote our products and services
• Install our Billboards on strategic locations all around New Orleans – Louisiana
• Distribute our fliers and handbills in target areas
• List our indie game studio in local directories / yellow pages
• Advertise our indie game studio in our official website and employ strategies that will help us pull traffic to the site.
• Ensure that all our staff members wear our branded shirts and all our vehicles and trucks are well branded with our company logo et al.

12. Our Pricing Strategy

At David Lance® Indie Game Studio, Inc. we will adopt the pricing system that is obtainable in the industry but we will ensure that we keep the prices of our video games a little below the average market rate by keeping our overhead low and by collecting payment in advance. In addition, we will also offer special discounted rates to all our customers at regular intervals.

• Payment Options

The payment policy adopted by David Lance® Indie Game Studio, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that David Lance® Indie Game Studio, Inc. will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via online bank transfer
• Payment via mobile money
• Payment via Point of Sales Machines (POS Machines)
• Payment via check

In view of the above, we have chosen banking platforms that will enable our client make payment for video games and sponsorship without any stress on their part.

13. Startup Expenditure (Budget)

The cost of setting up an indie game development studio can be relatively expensive for new entrepreneur especially if you are all out to start a standard indie game studio. Aside from the money required to purchase the latest software, gadgets and production equipment, you would also need a huge cash base to be able to attract and pay professional video games designers and developers

Essentially, this are the area we are looking towards spending our start – up capital on;

• The Total Fee for incorporating the Business in the United States of America – $750.
• The budget for liability insurance, permits and license – $2,500
• The amount needed to acquire a suitable Office facility with enough space for standard indie game studio in a business district 6 months (Re – Construction of the studio facility inclusive) – $100,000.
• The cost for equipping the office (computers, laptops, projectors, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $2,000
• The cost of launching our official website – $600
• Budget for paying at least 5 employees for 2 months and utility bills – $50,000
• Additional expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
• Miscellaneous – $10,000

Going by the report from the market research and feasibility studies conducted, we will need about three hundred and fifty thousand (350,000) U.S. dollars to successfully set up a medium scale but standard indie game studio in the United States of America.

Generating Funds/Startup Capital for David Lance® Indie Game Studio, Inc.

David Lance® Indie Game Studio, Inc. is a private business that will be owned by David Lance and some partners. They decided to restrict the sourcing of the startup capital for the business to just three major sources.

• Generate part of the startup capital from personal savings and sale of his stocks
• Generate part of the startup capital from friends and other extended family members
• Generate a larger chunk of the startup capital from the bank (loan facility).

N.B: We have been able to generate about $100,000 (Personal savings $85,000 and soft loan from family members $15,000) and we are at the final stages of obtaining a loan facility of $250,000 from our bank. All the papers and documents has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting David Lance® Indie Game Studio, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to develop highly creative and interesting video games and to offer sponsorship or our video games a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.

David Lance® Indie Game Studio, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner of our business strategy.

We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Incorporation: Completed
• Opening of Corporate Bank Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Securing a standard office facility plus renovation of the facility and construction of a standard indie game development studio: Completed
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Conducting Feasibility Studies: Completed
• Generating part of the startup capital from the founders: Completed
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents: In Progress
• Design of Logo for the business: Completed
• Secure trademark for our products: In Progress
• Printing of Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of the needed computers, laptops and other video games development gadgets: Completed
• Purchase of the needed furniture, office equipment, software applications, electronic appliances and facility facelift: In progress
• Creating Official Website for the business : In Progress
• Creating Awareness for the business: In Progress
• Health and Safety and Fire Safety Arrangement : In Progress
• Establishing business relationship with vendors and key players in the industries: In Progress

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Mobile Game Business Plan

The mobile gaming industry is booming and is expected to grow even more rapidly in the coming years.

Developers and people with financial bandwidth are trying to capture this highly saturated market space to reap exceptional financial rewards. One needs a comprehensive business plan outlining every possible detail of the mobile gaming business to raise funds and work on its scalability.

Need help writing a business plan for your mobile game business? You’re at the right place. Our mobile game business plan template will help you get started.

Free Business Plan Template

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• Fill in the blanks – Outline
• Financial Tables

How To Write A Mobile Game Business Plan?

Writing a mobile game business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Here are a few key components to include in your executive summary:

Introduce your Business:

Start your executive summary by briefly introducing your business to your readers.

Market Opportunity:

Products and services:.

Highlight the mobile game services you offer your clients. The USPs and differentiators you offer are always a plus.

Marketing & Sales Strategies:

Financial highlights:, call to action:.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

Business Description:

Describe your business in this section by providing all the basic information:

Describe what kind of mobile game company you run and the name of it. You may specialize in one of the following mobile game businesses:

• Independent game development
• Mobile game development studio
• Niche mobile game business
• Describe the legal structure of your mobile game company, whether it is a sole proprietorship, LLC, partnership, or others.Explain where your business is located and why you selected the place.

Mission Statement:

Business history:.

If you’re an established mobile game service provider, briefly describe your business history, like—when it was founded, how it evolved over time, etc.

Future Goals

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

Target market:

Start this section by describing your target market. Define your ideal customer and explain what types of services they prefer. Creating a buyer persona will help you easily define your target market to your readers.

Market size and growth potential:

Competitive analysis:, market trends:.

Analyze emerging trends in the industry, such as technology disruptions, changes in customer behavior or preferences, etc. Explain how your business will cope with all the trends.

Regulatory Environment:

Here are a few tips for writing the market analysis section of your mobile game business plan:

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Products And Services

The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:

Describe your services:

Features & functionality:.

Highlight the key features and functionalities of the game. This may include unique features like,

• Multiplayer access
• In-app purchases
• virtual currency system
• Social interaction

Describe your products

: Mention the products you sell through your mobile game business. It can be merchandise like apparel, collectibles, or accessories to increase the fandom and brand value.

Quality measures

: This section should explain how you maintain quality standards and consistently provide the highest quality service.

Additional Services

In short, this section of your mobile game plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

Unique Selling Proposition (USP):

Define your business’s USPs depending on the market you serve, the equipment you use, and the unique services you provide. Identifying USPs will help you plan your marketing strategies.

Pricing Strategy:

Marketing strategies:, sales strategies:, customer retention:.

Overall, this section of your mobile game business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your mobile game business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

Staffing & Training:

Operational process:, technology & equipment:.

Include the list of equipment and machinery required for mobile game business, such as computer systems, development technology, office equipment, etc.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your mobile game business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

Founders/CEO:

Key managers:.

Introduce your management and key members of your team, and explain their roles and responsibilities.

Organizational structure:

Compensation plan:, advisors/consultants:.

Mentioning advisors or consultants in your business plans adds credibility to your business idea.

This section should describe the key personnel for your mobile game services, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

Profit & loss statement:

Cash flow statement:, balance sheet:, break-even point:.

Determine and mention your business’s break-even point—the point at which your business costs and revenue will be equal.

Financing Needs:

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the mobile game industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your mobile gaming business plan should only include relevant and important information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

This sample mobile game business plan will provide an idea for writing a successful mobile game plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our mobile game business plan pdf .

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Frequently asked questions, why do you need a mobile game business plan.

A business plan is an essential tool for anyone looking to start or run a successful mobile game business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your mobile game company.

How to get funding for your mobile game business?

There are several ways to get funding for your mobile game business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

• Bank loan – You may apply for a loan in government or private banks.
• Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
• Crowdfunding – The process of supporting a project or business by getting a lot of people to invest in your business, usually online.
• Angel investors – Getting funds from angel investors is one of the most sought startup options.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your mobile game business?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your mobile game business plan and outline your vision as you have in your mind.

How detailed should the financial projections be in my mobile game business plan?

The level of detail of the financial projections of your mobile game business may vary considering various business aspects like direct and indirect competition, pricing, and operational efficiency. However, your financial projections must be comprehensive enough to demonstrate a comprehensive view of your financial performance.

Generally, the statements included in a business plan offer financial projections for at least the first three or five years of business operations.

What key components should a mobile game business plan include?

The following are the key components your mobile game business plan must include:

• Executive summary
• Business Overview
• Market Analysis
• Products and services
• Sales and marketing strategies
• Operations plan
• Management team
• Financial plan

Can a good mobile game business plan help me secure funding?

Indeed. A well-crafted mobile game business will help your investors better understand your business domain, market trends, strategies, business financials, and growth potential—helping them make better financial decisions.

So, if you have a profitable and investable business, a comprehensive business plan can certainly help you secure your business funding.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How to Start a Profitable Board Game Business [11 Steps]

By Nick Cotter Updated Feb 05, 2024

Business Steps:

1. perform market analysis., 2. draft a board game business plan., 3. develop a board game brand., 4. formalize your business registration., 5. acquire necessary licenses and permits for board game., 6. open a business bank account and secure funding as needed., 7. set pricing for board game services., 8. acquire board game equipment and supplies., 9. obtain business insurance for board game, if required., 10. begin marketing your board game services., 11. expand your board game business..

To begin a board game business, performing a comprehensive market analysis is crucial. This step will help you understand the competitive landscape, identify your target audience, and uncover trends that can inform your business strategy. Here's how to approach this vital first step:

• Research the industry: Look at market size, growth trends, and industry reports to grasp the health of the board game sector.
• Identify your competitors: Analyze existing board game companies, focusing on their product offerings, pricing, marketing strategies, and customer reviews.
• Understand your customers: Determine who your potential customers are, what they value in board games, and where they can be reached.
• Spot market trends: Stay informed about emerging themes, technologies, and design innovations that are shaping board games today.
• Assess the retail landscape: Explore how board games are sold, whether through brick-and-mortar stores, online platforms, or both, and consider the implications for your distribution strategy.
• Regulatory considerations: Investigate any regulations or standards relevant to board game production and sales in your target markets.

Are board game businesses profitable?

Yes, board game businesses can be highly profitable depending on the individual business’s model. Board game businesses can generate revenue from sales of the games, as well as from related merchandise such as expansions, cards, and other accessories. Additionally, many successful board game businesses also offer gaming events and other organized activities that can generate additional revenue.

Creating a board game business plan is a crucial step toward turning your passion into a profitable venture. It serves as a roadmap, detailing your vision, strategies, and the practical steps needed to make your business a success. Below are key elements to consider when drafting your business plan.

• Executive Summary: Summarize your business concept, target market, and unique selling points.
• Business Description: Outline the scope of your business, types of board games offered, and your mission statement.
• Market Analysis: Research the board game industry, identify your target audience, and analyze competitors.
• Marketing Plan: Develop strategies for branding, promotion, and distribution channels.
• Operations Plan: Describe your creation process, manufacturing, and logistics.
• Management Team: Highlight the expertise and roles of your team members.
• Financial Projections: Provide detailed revenue forecasts, budget estimates, and funding requirements.
• Risk Assessment: Identify potential challenges and outline mitigation strategies.

How does a board game business make money?

Board game businesses make money by selling physical copies of their products to customers. They also make money from selling digital copies of their games through online stores such as Steam or the App Store. Additionally, these businesses can make money from merchandise related to their games such as t-shirts and posters. Finally, board game businesses often sell licenses allowing others to make derivative works or use their games in a different context. For example, a board game business may target gamers aged 15-30 as their target market for a business like air duct cleaning.

Creating a strong brand for your board game is crucial to distinguish it in a competitive market and build a loyal customer base. Your brand should reflect the unique personality of your games and resonate with your target audience. Here are some key points to consider when developing your board game brand:

• Identify your niche: Understand the specific segment of the market your games appeal to, whether it's strategy enthusiasts, families, or party gamers.
• Define your brand personality: Decide on the voice and tone of your brand. Will it be whimsical, serious, educational, or adventurous?
• Create a memorable name and logo: Your brand name and logo should be distinctive and memorable, making it easy for customers to recall and recognize your products.
• Develop a visual identity: Choose colors, fonts, and imagery that consistently convey your brand’s personality across all marketing materials and product packaging.
• Build a brand story: Craft a compelling narrative about the origins of your company, the inspiration behind your games, and what sets you apart from the competition.
• Engage with your community: Foster a community around your brand through social media, events, and conventions to create a loyal customer base and receive valuable feedback.

How to come up with a name for your board game business?

Coming up with a name for your board game business can be a fun and creative process! First, take some time to brainstorm words that represent the types of games you sell and the values you want your business to embody. Make sure to keep it simple – shorter names are easier to remember and pass along. Once you have a few ideas in mind, try them out on friends and family to see what resonates with people. Finally, make sure the name is available by doing an online search to make sure no one else has already claimed it. With these steps, you should be able to come up with a great name for your board game business!

Once you've laid the groundwork for your board game business, formalizing your business registration is a crucial step to legitimizing your endeavor and ensuring legal compliance. This process differs by country and region, but here are some general steps you can follow to get your business up and running.

• Choose a business structure: Decide whether your business will be a sole proprietorship, partnership, limited liability company (LLC), or corporation. Each structure has different legal and tax implications.
• Register your business name: Select a unique name for your business and make sure it's not already in use. Register it with the appropriate state or local agency.
• Obtain necessary licenses and permits: Depending on your location and business type, you may need specific licenses or permits to operate legally.
• Apply for an Employer Identification Number (EIN): If applicable, get an EIN from the Internal Revenue Service (IRS) for tax purposes.
• Register for state and local taxes: Register with your state to obtain a tax identification number, workers' compensation, unemployment, and disability insurance.
• File the necessary paperwork: Submit all required documents to your local, state, or federal government to officially register your business.

Resources to help get you started:

Explore crucial resources designed specifically for board game entrepreneurs, offering deep dives into market trends, operational excellence, and strategies for successful business expansion:

• BoardGameGeek (BGG) : A comprehensive database and community for board game enthusiasts, providing insights into trends, popular mechanics, and consumer preferences. Website .
• ICv2 : Offers industry reports and news covering the business side of board games, including sales data and market analysis. Website .
• The Dice Tower : A media network providing reviews, interviews, and advice that can help understand what makes a board game successful. Website .
• Cardboard Edison : Aims at assisting board game designers with advice, resources, and community support, beneficial for understanding the design process and industry standards. Website .
• GAMA (The Game Manufacturers Association) : Provides resources for publishers, including trade shows, industry reports, and networking opportunities, crucial for market entry and expansion. Website .

Securing the appropriate licenses and permits is a critical step in setting up a board game business to ensure legal compliance. The specifics can vary based on your location, the nature of your business, and other factors. Below is a general guide to help you get started:

• Business License: Register for a general business license with your local city or county government to operate legally.
• Sales Tax Permit: If you're selling products, a sales tax permit from your state's department of revenue might be required.
• Employer Identification Number (EIN): Obtain an EIN from the IRS for tax purposes, especially if you plan to hire employees.
• Certificate of Occupancy: If operating from a physical location, you need a certificate of occupancy from your local government to confirm the space meets building codes and zoning laws.
• Trademark: Consider applying for a trademark for your board game's name and logo to protect your brand identity.
• Product Safety Testing: Ensure compliance with the Consumer Product Safety Commission (CPSC) for safety standards if your game is intended for children.

It's essential to consult with a legal professional or your local business bureau to ensure you meet all regulatory requirements for your specific board game business.

What licenses and permits are needed to run a board game business?

The exact license and permits required to run a board game business can vary greatly by location, so it's important to do research and find out the laws specific to your area. Depending on the type of board game business you will be running, you may need a special sales tax permit, food or liquor license, or a license issued by your city or township. Additionally, you may have to register your business with the department of revenue in your state.

Starting a board game business requires careful financial management, and one of the key steps is to establish a separate business bank account to keep your company's finances organized. Additionally, securing adequate funding is crucial to ensure a smooth launch and operation of your business. Here's how you can accomplish these essential tasks:

• Research local banks and credit unions that offer business banking services. Look for accounts with low fees, easy access, and good customer support.
• Gather the necessary documentation to open a business bank account, such as your business license, EIN (Employer Identification Number), and articles of incorporation or organization.
• Consider different funding options, including business loans, lines of credit, investors, crowdfunding platforms, or personal savings to finance your initial inventory and operating expenses.
• Develop a solid business plan to present to potential lenders or investors, showcasing market research, financial projections, and a clear strategy for your board game business.
• Keep track of all your business transactions through your new account to maintain a clear financial record, which will be helpful for budgeting, tax purposes, and future funding needs.

Setting the right pricing for your board game services is crucial to attract customers while ensuring your business remains profitable. Consider the value you're providing, your target market's budget, and the prices of your competitors. Here are some tips to guide you in pricing your board games:

• Cost-Plus Pricing: Calculate the total cost of providing your service, including production, overhead, and labor, then add a markup to ensure a profit margin.
• Competitive Analysis: Research what similar businesses are charging and position your prices in a way that offers value while staying competitive.
• Value-Based Pricing: Set prices based on the perceived value to the customer, not just the cost of production. Offer premium services at higher rates if they provide a unique experience or superior quality.
• Discounts and Packages: Create pricing structures that encourage bulk purchases or longer-term engagements, such as memberships, to increase customer loyalty and upfront revenue.
• Dynamic Pricing: Consider flexible pricing models that can change based on demand, special events, or promotions to maximize earnings and market interest.
• Customer Feedback: Gather feedback from initial customers to understand how they perceive your pricing and adjust accordingly to meet market expectations.

What does it cost to start a board game business?

Initiating a board game business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $42000 for launching such an business. Please note, not all of these costs may be necessary to start up your board game business.

Starting a board game business requires careful selection of equipment and supplies to ensure that the final product is of high quality and appealing to customers. Here's a guide to help you acquire the necessary items for your venture:

• Game Components: Source materials like dice, pawns, tokens, and miniatures, ensuring they are durable and well-crafted. Consider custom designs for a unique touch.
• Printed Materials: Find a reliable printer for game boards, cards, and instructions. Choose high-quality paper and finishes for a professional look.
• Boxes and Packaging: Invest in sturdy boxes for your games. Custom branding can make your product stand out on the shelf.
• Prototyping Supplies: Get blank cards, boards, and pieces for testing game mechanics before final production.
• Art Supplies: If creating original artwork, purchase quality art supplies or software for digital designs.
• Manufacturing Partners: Research and partner with a board game manufacturer that aligns with your quality expectations and budget.
• Storage Solutions: Secure a clean, dry space for storing inventory to maintain product quality.

List of software, tools and supplies needed to start a board game business:

• Board Game Manufacturing Software – $800-$1,000
• Gaming Website Builder – $50-$300
• Graphic Design Software – $99-$299
• Inventory Management Software – Starting at $1,000
• Business Plan Template – $25-$99
• Bookkeeping Software – Starting at $9 per month
• Marketing Materials – Starting at $500 for initial set up cost
• Tables for Retail Sales – Around $100 each
• Shelving Units for Storage of Board Games - Around $80 each
• Insurance Coverage - Starting at around $600 a year

Securing the right business insurance is a crucial step when starting a board game business, as it helps protect your investment from potential risks. Depending on the nature of your business, different types of insurance may be required or recommended. Below are key points to consider when obtaining business insurance:

• General Liability Insurance: Protects against financial loss due to bodily injury, property damage, or advertising injury claims made by third parties.
• Product Liability Insurance: Covers legal and court costs in case your board games cause harm or injury to users.
• Commercial Property Insurance: Provides coverage for your physical assets, including inventory, equipment, and facilities, against damage or loss.
• Business Interruption Insurance: Helps compensate for lost income and covers operating expenses if your business is temporarily unable to operate.
• Intellectual Property Insurance: Shields your board game designs and content from infringement or theft.
• Workers’ Compensation Insurance: Mandatory in many places, it covers medical costs and lost wages for employees injured on the job.
• Consult with an insurance broker or agent who specializes in small businesses or the gaming industry to tailor an insurance package that fits your specific needs.

Marketing is critical in creating buzz and attracting customers to your board game services. A strategic approach will help you reach your target audience effectively and establish your brand in the market. Consider these tips as you embark on promoting your business:

• Identify Your Audience: Tailor your marketing efforts to appeal to your specific demographic, whether they are families, hardcore gamers, or casual players.
• Utilize Social Media: Leverage platforms like Instagram, Twitter, and Facebook to showcase your games, share news, and engage with the community.
• Build a Website: Create a professional website with an online store, game tutorials, and customer reviews to give your business credibility and accessibility.
• Engage with Communities: Participate in board game forums, attend conventions, and host events to network and spread the word about your services.
• Collaborate with Influencers: Partner with board game influencers and reviewers to reach a wider audience and gain trust through their endorsements.
• Offer Promotions: Incentivize first-time purchases with discounts, bundle deals, or loyalty programs to encourage players to try your services.
• Utilize Paid Advertising: Invest in targeted ads on Google, social media, and relevant gaming sites to drive traffic and conversions.
• Collect Feedback: Use customer feedback to improve your offerings and show potential customers that you value their input and are always improving.

As you reach Step 11 in your journey to expand your board game business, it's critical to focus on scaling up while maintaining the quality and uniqueness that brought your company success. Strategic expansion can take many forms, from broadening your product line to reaching new markets. Consider these key tactics to effectively grow your business:

• Explore partnerships with established brands or designers to create co-branded games, tapping into their existing customer bases.
• Diversify your product range by introducing expansions for existing games, or developing new game genres that appeal to a wider audience.
• Invest in online marketing, using targeted ads and social media campaigns to reach a global audience and drive traffic to your online store.
• Participate in international board game fairs and conventions to showcase your products and network with industry professionals.
• Consider crowdfunding for new projects to gauge interest and secure funding while creating a buzz around upcoming releases.
• Expand your retail presence by working with distributors to get your games into more brick-and-mortar stores.
• Engage with your community through events, tournaments, or playtesting sessions to build a loyal fanbase and receive valuable feedback.

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The Complex World of the Video Game Company

Published Mar.10, 2014

Updated Apr.24, 2024

By: Noor Muhammad

Average rating 5 / 5. Vote count: 1

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Table of Content

Tread lightly in the video game industry in terms of trying to startup too fast. These types of companies come and go because of the high risk of the market not liking the developed product or the risk of problems developing with the games. Video games today represent complex software developed by technology experts . Many versions can be played online by virtual communities, while others are played alone or only with others in the same room. Games target different markets, like children under 12 years old or teenager. Markets are also segmented by interest, like sports, military, or science fiction.

Startups have two options in business models

In the first model, the company develops the software, usually using a team of developers. Another business path that can be taken is selling licensed video games developed by other companies. Either way, it requires a significant amount of capital to get a video game business up and running. Other things to keep in mind during the development of a business plan for a video game company include the following:

• The amount of capital raised needs to cover the cost of software development, online or storefront setup, development team expenses, and the first few years of operations or expected profitability, whichever comes first • The staff must have specialized expertise in software development and in-depth knowledge of video game marketing and the video game industry • Extensive market research is mandatory because this is a highly competitive industry; conduct research on the types of video games the target gaming community is hoping to see in new releases in the near future

• Business developed video games need extensive testing; many companies have failed because they did not thoroughly test their product before release • Development of the product distribution channels is critical, and include game retail chains, business owned brick-and-mortar stores, and online stores; if selling online, games can be sold as downloads or shipped as DVDs • The business needs to develop clear-cut policies on game exchanges, returns, and upgrades. • Prepare a video game business plan that includes a marketing plan, pro-forma income statements, balance sheets, and cash flow projections

Careful and in-depth business planning will go a long way towards convincing venture capitalists or other types of investors to commit funds to a risky business. The gaming industry is volatile and changes rapidly as technology advances. Video games are getting increasingly sophisticated, so the games most likely to sell are filled with features like interactive play and virtual community capacity.

Developing a business plan for a video game company requires close attention to a number of details that are important to success in a competitive industry. OGS Capital professional business plan writers can provide critical assistance to business owners who need a highly professional business plan that engages potential investors.

Download The Complex World of the Video Game Company in pdf

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Sample Game Business Plan

• November 15, 2023

GAME COMPANY BUSINESS PLAN SAMPLE

Game companies create interactive and digital entertainment products designed to be played on a wider range of platforms, platforms like personal computers, smartphones, Gameboard, video game platforms like the popular Sony’s PlayStation 1, 2, 3, 4, Xbox and a host of others.

The game industry in its league has been in a steady state of evolution ever since its creation, giving room for innovative and new players in the highly patronized gaming space.

So, if you have an interest in the gaming business and you want to start a game company, let’s move down to the security steps you can take to have a successful game company.

Here is a sample business plan for starting a mobile game company.

• Create a Clear and Solid Business Plan

Having decided to start a game company, the first thing required of you is to come up with a plan. The business plan needs to explain how you mean to manage your game company.

Be clear and be as realistic as possible while writing this. Remember, it is advantageous you underestimate your desired profits and be pleasantly amazed than overestimating your abilities and end up being disappointed.

During drawing the game company business plan, ensure you have a clear and solid description of the game company to give people an insight of what your game company is about, what makes you stand tall, and differentiates amidst your competitors and the various markets you intended to gain a firm foothold in.

All these are very crucial and you need to take cognizance of them if you are to start a game company.

• Carry out a Market Research

Another guide for you before you start a game company is, you need to know who are your present and likely future competitors and target your market.

You need to know how much you can sell your game designs to retail and at wholesale levels.

You can only know all these through market surveys. Ask around and get feedback. Find a prototype of games that are similar to what your company will be dealing with, and learn where and how much those games sell.

This will surely give you a high up when you are ready to develop your own.

• Register your Game Company

Before you register your game company with the state, it is very paramount you decide on the business structure you will be building. Is it LLC, corporation, or partnership?

Game companies can thrive well as a partnership business, likewise as a sole proprietorship.

But if you are going to take a loan for the game company in the early stages, consider registering your game company as an LLC to prevent personal liability for debts.

However, it is left to you to decide on the game company’s business structure. Registration of the game company under the government is a must, do handle it diligently.

• Gather your Team

If you are starting a game company, you need to put together several teams to make the company a successful one. Running a game company all alone is nearly not possible.

Find at least one or two graphic artists, programmers, and at a minimum, an expert on marketing and finance to join you in the game design company. If you have this squad of brains and talents at your disposal, the sky is the beginning for your game company for it will grow big.

• Source for Enough Finance

Look for ways to source for the fund while your business team develops and designs their first product so that the game company wouldn’t burn much capital at the early or developmental stage.

Unlike other types of businesses, game companies do employ a business model that demands a fairly large beforehand investment, capital, and labor before the products can be marketed out to the general public.

• Develop your First Product

It is high time you create your first product for your game company. Carry out extensive research while conceptualizing your game company’s first product.

Dispatch your team and find out what are those things that please gamers in new releases, and the game industries inside publications to have an idea of the kinds of games they are developing for future releases. Ensure your first product (game) is fully complete and tested before you market it out.

• Market your First Product

Adopt creative marketing strategies to create awareness about your game. Allow game downloads on your company website, and spread the news of your new game on several game forums and online community discussion forums.

Also, create a smooth relationship with local game stores across the state so that they can stock your products directly.

However, if you carefully follow and apply these 7 steps discussed above, your game company is bonded to experience a free flow of financial income in its early and later stages.

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A Sample Video Game Store Business Plan Template

Are you about starting a video game store? If YES, here is a complete sample video game store business plan template & feasibility report you can use for FREE . Okay, so we have considered all the requirements for starting a video game store. We also took it further by analyzing and drafting a sample video game store business marketing plan template backed up by actionable guerrilla marketing ideas for video game stores. So let’s proceed to the business planning section.

Why Start a Video Game Store?

Starting a video game store business is just like starting any other retail business, and it will require startup capital, planning (feasibility studies, market survey, budgeting), and of course time.

A video game store retails different types of video games and accessories. If you are considering starting this type of business, then you must hunt for the right location, a location with the right demographic composition. With the right location, items in stock, and good pricing structure, you can start making profit as soon as possible after opening your business.

If you are sure this type of business is what you truly want to do after you must have conducted your feasibility studies and market research, then the next step to follow is to write a good business plan; a detailed blue print of how you intend raising your seed capital, setting up the business, managing the flow of the business, sorting out tax and marketing your products .

The truth is that it is one thing to have a fantastic idea cum business plan, it is another thing for the business plan to translate to money, which is why it is important to assemble a team of dedicated workers to work with if you want to be successful with your video game store business.

Below is a sample video game store business plan template that will help you successfully write yours without much stress.

1. Industry Overview

Video game store business is categorized under the video game retail store industry and businesses in this industry retail a wide range of toy and hobby goods, such as traditional dolls and toys, electronic toys (including video and electronic games), board games, hobby kits and craft supplies et al. These goods are retailed to the general public after they are purchased from local and international manufacturers and wholesalers.

In recent time, the video game retail store industry has done brilliantly, growing in line with economic recovery. On the other hand, competition from discount department stores and e-commerce channels has absorbed much of the demand for industry products by offering low prices and one-stop-shop convenience. In view of that, discount stores have become the leading hobby and toy retailers in the united states.

IBISWorld projected that despite an extremely competitive environment both internally and externally, hobby and toy retailers are expected to experience growth over the five years to 2022.

The Video game retail stores industry is indeed a very large industry and pretty much thriving in all the parts of the world. Statistics has it that in the United States of America alone, there are about 21,563 legally registered video game retail stores responsible for employing about 158,296 employees and the industry rakes in a whooping sum of $20bn annually.

It is important to state that; the industry experienced a 1.1 percent growth between 2013 and 2018. Hobby Lobby Stores Inc. and Michaels Stores have the lion shares in the USA market.

A recent research conducted by IBISWorld shows that the Video game retail stores industry has crafted moderate revenue growth over the past five years. Operators in this industry retail a variety of toys and hobby goods, including dolls, electronic toys, games, hobby kits and craft supplies.

The research also shows that over the five years to 2018, industry operators steadily recovered from recessionary lows, in line with improving economic conditions. As consumer income rose during the period, competition intensified and operators both within and external to the industry fought to win over consumers.

Increased competition from discount department stores and online retailers stifled industry sales and profitability, as lower-priced comparable products increasingly lured customers away from traditional industry operators.

In summary, video game store business is evergreen and thriving. In response to the ever-growing demand for video games and accessories, players in the industry are now opening additional stores thereby creating chains of stores across different cities. They are always ready to expanded into new markets and of course adapt to the changing trend in consumer tastes and increase sales.

2. Executive Summary

Planet Excel™ Video Game Store, Inc. is a neighborhood video game retail store that will be located in a growing community in Lake Street, Petoskey – Michigan. We conducted our feasibility studies and market survey and we came to the conclusion that Lake Street, Petoskey is the right location for us to launch our video game retail store.

We are in the video game store line of business to make profits at the same time to give our customers value for their money. We want to give people who patronize our video games the opportunity to choose from a wide range of video games and other related products. We will leverage on all major retail channels, including specialty stores, merchandisers and online store.

We are aware that there are several video game stores and even toy and hobby chains of stores that also retail video games and accessories all around Petoskey – Michigan, which is why we spent time and resources to conduct our feasibility studies and market survey so as to enable us locate the business in an area that will support the growth of the business

We ensured that our facility is easy to locate and our outlet is equipped with the various payment of options available in the United States of America Much more than retailing quality and affordable video games and related products, we will ensure that our customer care is second to none in the whole of Lake Street, Petoskey – Michigan.

We know that our customers are the reason why we are in business which is why we will go the extra mile to get them satisfied whenever they visit our store. Planet Excel™ Video Game Store, Inc. will ensure that all our customers are given first class treatment whenever they visit our store.

We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large they may grow to. We will ensure that we get our customers involved in the selection of brands that will be on our racks and also when making some business decisions that will directly or indirectly affect them.

Planet Excel™ Video Game Store, Inc. is owned by Joel Anderson and his immediate family members. Joel Anderson has successfully managed several video game retail stores both in Petoskey and Dallas – Texas prior to opening his own video game store. Joel Anderson has a Degree in Business Administration and he will run the business alongside his immediate family members.

3. Our Products and Services

Planet Excel™ Video Game Store, Inc. is going to operate a registered neighborhood video game store that will retail a wide range of video games and video games accessories. We are in the video game retail industry to make profits and give our customers value for their money.

These are some of the products that we will retail in our video game retail store;

• A wide range of video games from top flight video games companies like Microsoft Corporation, Nintendo Co. Ltd., Activision Blizzard Inc., GameStop Corp., Sony Corporation and Electronic Arts Inc.
• Video games renting services
• Sale of Video games and accessories

4. Our Mission and Vision Statement

• Our vision is to establish a one stop video game store business in Lake Street, Petoskey – Michigan.
• Our mission is to establish a video game retail store that will make available a wide range of video games and accessories from top brands at affordable prices to the residents of Lake Street, Petoskey.

Our Business Structure

Our intention of starting a video game store is to build a standard video game retail store that will be a one – stop shop, which is why we will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business.

We will ensure that we only hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all our stake holders. As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of five years or more especially when we start selling our franchise or running chains of video game retail stores.

In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)
• Store Manager

Merchandize Manager

Sales and Marketing Manager

• Accountants/Cashiers
• Store Attendant/Customer Services Executive

5. Job Roles and Responsibilities

Chief Executive Officer – CEO (Owner) :

Grows management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinion

Accountable for fixing prices and signing business deals

Responsible for providing direction for the business

Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.

Responsible for signing checks and documents on behalf of the company

Assesses the success of the organization

Store Manager:

• Responsible for managing the daily activities in the store
• Ensures that the store facility is in tip top shape and conducive enough to welcome customers
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Carries out induction for new team members
• Responsible for training, evaluation and assessment of employees
• Ensures that goods and products are properly arranged
• Handles any other duty as assigned by the CEO
• Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Helps to ensure consistent quality of video games and video games accessories on our rack
• Responsible for the purchase of video games and video games accessories for the organization
• Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer purchases
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps increase sales and growth for the company

Accountant/Cashier

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Store Attendant/Client Service Executive

• Ensures that all contacts with customer (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the store manager in an effective and timely manner
• Consistently stays abreast of any new information on products, promotional campaigns etc. to ensure accurate and helpful information is supplied to our customers when they make enquiries
• Provides information about warranties, manufacturing specifications, care and maintenance of merchandise and delivery options
• Bags or packages purchases
• Responsible for cleaning the store facility at all times
• Ensures that toiletries and supplies don’t run out of stock
• Handle any other duty as assigned by the store manager.

6. SWOT Analysis

Our plan of starting just one outlet of our video game retail store is to test run the business for a period of 3 to 5 years to know if we will invest more money, expand the business and then open other video games and accessories stores all over Michigan.

We are quite aware that there are several video game retail stores all over Petoskey – Michigan and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business. We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be welled equipped to confront our threats.

Planet Excel™ Video Game Store, Inc. employed the services of an expert HR and Business Analyst with bias in retailing to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.

This is the summary of the SWOT analysis that was conducted for Planet Excel™ Video Game Store, Inc.

Our location, the business model we will be operating, varieties of payment options, wide range of video games and video games accessories from local and international manufacturing brands and our excellent customer service culture will definitely count as a strong strength for Planet Excel™ Video Game Store, Inc.

A major weakness that may count against us is the fact that we are a new video game retail store in Lake Street, Petoskey – Michigan and we don’t have the financial capacity to engage in the kind of publicity that we intend giving the business.

• Opportunities:

The fact that we are going to be operating our video games and accessories store in one of the huge residential estates with the right demographic composition in Lake Street, Petoskey – Michigan provides us with unlimited opportunities to sell our video games to a large number of people.

We have been able to conduct thorough feasibility studies and market survey and we know what our potential customers will be looking for when they visit our retail store. We are well positioned to take on the opportunities that will come our way.

We are quite aware that the rising popularity of e-commerce poses a significant threat to the video games business, as consumers may substitute goods purchased online for goods purchased at video game stores due to the affordability and convenience of e-commerce and the wider range of goods that are available online.

E-commerce sales are expected to rise in 2018, posing a potential threat to the industry. Another threat that may likely confront us is the arrival of a new video games and video games accessories are retailed.

7. MARKET ANALYSIS

• Market Trends

If you are close observer of the toys and hobby goods industry, you will agree that during the last five years, the intensely competitive environment has driven many small players to exit the industry. Due to their size, large companies are able to offer competitively priced goods and the number of children under the age of nine is projected to grow.

Please note that spending on hobby goods and toys is generally discretionary; therefore, a rise in household disposable income would increase the propensity for customers to purchase more industry goods, leading to growth in demand. Per capita disposable income is expected to increase in 2018, creating a potential opportunity for the industry.

Although these trends are forecast to continue over the next 5 years, some video game retail stores will benefit from increasing demand for new technologies, such as video games. Beyond every reasonable doubt, the video game retail store that can successfully flow with the trend and keep up with consumer and technology trends will definitely fare well in the coming years

It is now a common phenomenon for video game retail stores to leverage on technology to effectively predict consumer demand patterns and to strategically position their store to meet their needs; in essence, the use of technology helps retailers to maximize supply chain efficiencies. No doubt data collected from customers goes a long way to help retail stores serve them better.

8. Our Target Market

When it comes to selling items that are found in video game retail stores, there is indeed a wide range of available customers. In essence, our target market can’t be restricted to just a group of people, but all those who reside in the locations where we intend opening our video game retail store. One thing is certain, we will ensure that we only retail quality and affordable items in our video game retail store.

In view of that, we have positioned our video game retail store to service residents of Petoskey – Michigan and every other location where our video game retail store will be located in the United States of America. We are in business to retail video games and video games accessories to the following groups of people;

• Schools and Students
• Households (parents)
• Video game lounge owners
• Video game rental business owners

Our competitive advantage

The competitive advantages that will help us standout from our competitors is not restricted to having an exclusive sales contract, stocking seasonal products and access to highly skilled workforce. Planet Excel™ Video Game Store, Inc. is launching a standard video game retail store that will indeed become the preferred choice in Lake Street, Petoskey – Michigan.

Our video game retail store is located in a corner piece property on a busy road directly opposite one of the largest residential estates in Petoskey – Michigan. One thing is certain, we will ensure that we have a wide range of quality and affordable items in our store at all times. It will be difficult for customers to visit our store and not see the items that they are looking for.

Our highly experienced and qualified management, customer service culture, online store, various payment options and highly secured facility with enough packing space will also serve as a competitive advantage for us.

Lastly, all our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and achieve all our business aims and objectives.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Planet Excel™ Video Game Store, Inc. is established with the aim of maximizing profits in the industry and we are going to go ensure that we do all it takes to sell a wide range of video games to a wide range of customers. Planet Excel™ Video Game Store, Inc. will generate income by;

• Retailing a wide range of video games from top flight video games companies like Microsoft Corporation, Nintendo Co. Ltd., Activision Blizzard Inc., GameStop Corp., Sony Corporation and Electronic Arts Inc.
• Sale of video games accessories
• Retailing traditional entertainment and learning games

10. Sales Forecast

It is important to state that our sales forecast is based on the data gathered during our feasibility studies, market survey and also some of the assumptions readily available on the field.

One thing is common with video game retail store, the larger the store, the larger the number of customers that will patronize them. Although we may not be as large as Hobby Lobby Stores Inc.and Michaels Stores, but we will ensure that within our capacity we make available a wide range of items from different brands in our store.

Below are the sales projections that we were able to come up with for the first three years of operations;

• First Fiscal Year: $120,000
• Second Fiscal Year: $250,000
• Third Fiscal Year: $450,000

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and the arrival of a competitor in same location as ours within the period stated above. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Prior to choosing a location for Planet Excel™ Video Game Store, Inc. we conduct a thorough market survey and feasibility studies in order for us to penetrate the available market and become the preferred choice in Petoskey – Michigan.

We hired experts who have good understanding of the video game retail stores industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Lake Street, Petoskey – Michigan.

In summary, Planet Excel™ Video Game Store, Inc. will adopt the following sales and marketing approach to win customers over;

• Introduce our video game retail store by sending introductory letters to schools, residence, and other key stake holders in and around Lake Street, Petoskey – Michigan
• Open our video game retail store with an open house party for children in the community
• Advertise our business in community based newspapers, local TV and radio stations
• List our business on yellow pages’ ads (local directories)
• Attend trade fairs and relevant exhibitions to sell our video game and video game accessories
• Leverage on the internet to promote our business
• Engage in direct marketing
• Encourage word of mouth marketing (referrals) from satisfied and loyal customers

11. Publicity and Advertising Strategy

Despite the fact that our video game retail store is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our video game retail store.

Planet Excel™ Video Game Store, Inc. has a long-term plan of opening chains of video game retail stores in various locations, which is why we will deliberately build our brand to be well accepted in Lake Street, Petoskey – Michigan before venturing out.

Here are the platforms we intend leveraging on to promote and advertise Planet Excel™ Video Game Store, Inc.;

• Place adverts on both print (community based newspapers and magazines) and electronic media platforms
• Sponsor relevant community programs
• Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, et al to promote our brand
• Install our billboards in strategic locations all around Lake Street, Petoskey – Michigan
• Distribute our fliers and handbills in target areas in the community where our video game retail store is located
• Position our Flexi Banners at strategic positions in the location where our video game retail store is located.
• Ensure that all our workers wear our branded shirts and all our vehicles are well branded with our organization’s logo et al.

12. Our Pricing Strategy

Pricing is one of the key factors that gives leverage to video game retail stores, it is normal for consumers to go to places where they can get items at cheaper price which is why big players in the industry attract loads of consumers.

We know we don’t have the capacity to compete with other video game retail stores, but we will ensure that the prices of all the video games and accessories that are available in our store are competitive with what is obtainable amongst video game retail stores within our level and in our location.

• Payment Options

The payment policy adopted by Planet Excel™ Video Game Store, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Planet Excel™ Video Game Store, Inc. will make available to her clients;

• Payment with cash
• Payment via credit cards
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer

In view of the above, we have chosen banking platforms that will enable our clients make payment for our video games and video game accessories without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.

13. Startup Expenditure (Budget)

When it comes to starting a video game retail store business, the major areas that you will spend the bulk of your cash is in renting or leasing a standard store facility. Aside from that, you are not expected to spend much except for paying of your employees and the stocking of your store with a wide range of video games and accessories.

These are the key areas where we will spend our startup capital;

• The total fee for registering the Business in the United States of America – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $1,300.
• Marketing promotion expenses for the grand opening of Planet Excel™ Video Game Store, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of – $3,580.
• The cost for hiring business consultant – $2,500.
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
• The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $55,240.
• The cost for shop remodeling (construction of racks and shelves) – $20,000.
• Other start-up expenses including stationery ($500) and phone and utility deposits – ($2,500).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
• The cost for Start-up inventory (stocking with a wide range of both locally and imported quality video games and video game accessories from different manufacturing brands) – $70,000
• The cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The cost of purchase and installation of CCTVs – $5,000
• The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
• The cost of Launching a Website – $600
• The cost for our opening party – $7,000
• Miscellaneous – $10,000

We would need an estimate of $200,000 to successfully set up our video game retail store in Lake Street, Petoskey – Michigan.

Generating Fund/Startup Capital for Planet Excel™ Video Game Store, Inc.

Planet Excel™ Video Game Store, Inc. is owned and financed by Joel Anderson and his immediate family members. They do not intend to welcome any external business partners which is why they decided to restrict the sourcing of the startup capital to 3 major sources.

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B : We have been able to generate about $100,000 (Personal savings $75,000 and soft loan from family members $25,000) and we are at the final stages of obtaining a loan facility of $100,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business close shop.

One of our major goals of starting Planet Excel™ Video Game Store, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to sell our video games and video game accessories a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.

Planet Excel™ Video Game Store, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our organizations’ corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check : Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and remodeling the store: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Stocking our store with a wide range of video games and video game accessories: In Progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party/launching party planning: In Progress
• Compilation of our list of products (video games and video game accessories) that will be available in our store: Completed
• Establishing business relationship with vendors – wholesale suppliers of various brands of products (video games and video game accessories) that we intend retailing: In Progress

More on Wholesale & Retail

Gaming Lounge Business Plan Template

Written by Dave Lavinsky

Gaming Lounge Business Plan

Over the past 10+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their gaming lounge companies.

If you’re unfamiliar with creating a gaming lounge business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a gaming lounge business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Gaming Lounge Business Plan?

A business plan provides a snapshot of your gaming lounge business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Gaming Lounge

If you’re looking to start a gaming lounge business or grow your existing gaming lounge company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your gaming lounge business to improve your chances of success. Your gaming lounge business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Gaming Lounge Businesses

With regards to funding, the main sources of funding for a gaming lounge business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan (hand it to them in person or email to them as a PDF file) and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for gaming lounge companies.

Finish Your Business Plan Today!

How to write a business plan for a gaming lounge business.

If you want to start a gaming lounge business or expand your current one, you need a business plan. The guide and sample below details the necessary information for how to write each essential component of your gaming lounge business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of gaming lounge business you are running and the status. For example, are you a startup, do you have a gaming lounge business that you would like to grow, or are you operating a chain of gaming lounge businesses?

Next, provide an overview of each of the subsequent sections of your plan. 

• Give a brief overv iew of the gaming lounge industry. 
• Discuss the type of gaming lounge business you are operating. 
• Detail your direct competitors. Give an overview of your target customers. 
• Provide a snapshot of your marketing strategy. Identify the key members of your team. 
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of gaming lounge business you are operating.

For example, you m ight specialize in one of the following types of gaming lounge businesses:

• Gaming lounge membership club : While the lounge is dedicated to serious video game play, the members-only club creates a community of friends and hours of enjoyment. Members pay monthly dues for unlimited access to video gaming, virtual reality and class video slot machine play.
• Board game cafe: Board gaming cafes are dedicated to board game aficionados who join any games that appeal to them. Appetizers and beverages may be offered.
• Arcade gaming lounge: For video arcade diehards, the arcade gaming lounge represents the classic arcade games much beloved by players. Games are video slot machine-play.
• Gaming bar and grill: For players who like to combine the latest video games, virtual reality and high-end technology, gaming bars are the go-to place. Players typically have a choice of beer, wine or cocktails with favorite foods, such as burgers and fries, from the grill. 

In addition to explaining the type of gaming lounge business you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of gamers served, the number of large gaming events held, or, reaching X number of lounges opened, etc.
• Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the gaming lounge industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the gaming lounge industry educates you. It helps you understand the market in which you are operating. 

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your gaming lounge business plan:

• How big is the gaming lounge industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your gaming lounge business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your gaming lounge business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, club members, event partygoers, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of gaming lounge business you operate. Clearly, individuals would respond to different marketing promotions than event partygoers, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers. Ideally you can speak with a sample of your target customers before writing your plan to better understand their needs.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are othe r gaming lounge businesses. 

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes bowling alleys with pinball machines, at-home gaming, or gambling with casino-play. You need to mention direct competition, as well.

For each direct competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of customers do they serve?
• What type of gaming lounge business are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide rewards for frequent players?
• Will you offer events, such as video tournaments, that your competition doesn’t?
• Will you provide the newest technology in gaming consoles?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a gaming lounge business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type o f gaming lounge company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide gaming tournaments, rewards for frequent players, themed parties, club membership perks and extended gaming hours on special occasions?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of yo ur plan, yo u are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your gaming lounge company. Document where your company is situated and mention how the site will impact your success. For example, is your gaming lounge business located in a popular restaurant and theater district, a standalone building or in a “destination” setting? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your gaming lounge marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in gaming magazines
• Reach out to gaming websites 
• Distribute flyers for special gaming events
• Engage in email marketing
• Advertise to club members on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your gaming lounge business, including adding and maintaining video machines and equipment, planning and providing tournaments and special events, restocking food inventory, etc. 

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to book your Xth gaming tournament, or when you hope to reach $X in revenue. It could also be when you expect to expand your gaming lounge business to additional locations.

Management Team

To demonstrate your gaming lounge business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company. 

Ideally, you and/or your team members have direct experience in managing gaming lounge businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a gaming lounge business or successfully running a video arcade or casino gaming room.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance s heet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you see 10 new video club memberships per day, or develop new ways to enhance video gamer play areas ? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your gaming lounge business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. 

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a video game room business:

• Cost of gaming equipment and maintenance
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and foodstuffs, board games, barware, or restaurant equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or a list of club memberships generating steady income.

Writing a business plan for your gaming lounge business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert and understand how to start a gaming lounge business. You will understand the gaming lounge industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful gaming lounge business.

Gaming Lounge Business Plan FAQs

What is the easiest way to complete my gaming lounge business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your gaming lounge business plan.

How Do You Start a Gaming Lounge Business?

Starting a gaming lounge business is easy with these 14 steps:

• Choose the Name for Your Gaming Lounge Business
• Create Your Gaming Lounge Business Plan
• Choose the Legal Structure for Your Gaming Lounge Business
• Secure Startup Funding for Your Gaming Lounge Business (If Needed)
• Secure a Location for Your Business
• Register Your Gaming Lounge Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Gaming Lounge Business
• Buy or Lease the Right Gaming Lounge Business Equipment
• Develop Your Gaming Lounge Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Gaming Lounge Business
• Open for Business

Where Can I Download a Free Business Plan Template PDF?

Click here to download the pdf version of our basic business plan template.

Our free business plan template pdf allows you to see the key sections to complete in your plan and the key questions that each must answer. The business plan pdf will definitely get you started in the right direction.

We do offer a premium version of our business plan template. Click here to learn more about it. The premium version includes numerous features allowing you to quickly and easily create a professional business plan. Its most touted feature is its financial projections template which allows you to simply enter your estimated sales and growth rates, and it automatically calculates your complete five-year financial projections including income statements, balance sheets, and cash flow statements. Here’s the link to our Ultimate Business Plan Template.

Don’t you wish there was a faster, easier way to finish your Gaming Lounge business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.  

Click here to see how Growthink’s business plan professional services can help you create a winning business.

Other Helpful Business Plan Articles & Templates

The meme-stock rally is dead as reality sets in amid GameStop's warning on revenue and plan to sell 45 million shares

• GameStop's meme-stock rally officially ended on Friday after the company announced plans to sell 45 million shares.
• The struggling video game retailer also said it expects a 29% decline in first-quarter revenue compared to last year.
• GameStop said the extreme rally in its stock does "not appear to be based on the underlying fundamentals of our business."

It was fun while it lasted. 

This week's meme-stock rally that sent shares of GameStop surging as much 271% is done. 

GameStop stock plunged as much as 29% on Friday to $19.70, down 70% from its intra-day high on Tuesday, and trading at the levels seen last Friday before the @TheRoaringKitty X account posted a meme that sparked a resurgence in the stock.

The rally in GameStop shares came to its sputtering conclusion on Friday when the struggling video game retailer announced plans to sell 45 million shares in an at-the-market offering, which could result in massive dilution for existing shareholders.

This type of share sale allows GameStop to, at its discretion, sell shares directly in the open market to willing buyers to raise capital, with an upside limit of 45 million shares. This is the same type of share sale agreement that allowed AMC Entertainment to take advantage of this week's meme-stock rally and raise $250 million in capital.

The only problem for GameStop is it appears too late for the company to take advantage of this week's meme stock rally, with all of its stock gains having been evaporated.

In a filing made with the SEC, GameStop said it expects first-quarter revenue to decline nearly 30% year-over-year to a range of $872 million to $892 million, and that it expects to see a net loss of $27 million to $37 million.

GameStop also said the company has experienced no fundamental change in its business that would explain the week's massive price surge.

"We did not experience any material changes in our financial condition or results of operations that would explain such price volatility or trading volume. Furthermore, since January 2021 through the date hereof, the market price of our common stock has seen extreme price fluctuations that do not appear to be based on the underlying fundamentals of our business or results of operations," GameStop warned investors in the prospectus tied to its share offering.

The company offered a sobering note to anyone interested in its stock: 

"Investors that purchase shares of our common stock in this offering may lose a significant portion of their investments if the price of our common stock subsequently declines," GameStop said. 

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Meme Stocks:

GameStop Rout Reaches $8 Billion After Plan to Sell Shares

• Video-game retailer’s 271% rally dwindled through the week
• Retail investor purchases show ‘significant’ decline: Vanda

A GameStop store in West Hollywood.

GameStop Corp. tumbled after filings opened the door for it to sell more equity, furthering a rout that erased most of the meme-fueled rally that had sent the stock soaring 271% at the start of the week.

The shares plunged 20% on Friday, as the video game retailer entered a pact to potentially offer up to 45 million shares and reported a drop in preliminary first-quarter net sales. The stock has shed more than $8 billion in value over the three-day retreat, as its weekly advance dwindled to 27%.

Exclusive: Corporate climate watchdog document deems carbon offsets largely ineffective

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US stock settlement switch faces early resilience test

Participants in the United States' multitrillion-dollar securities markets face an early test of their ability to cope with regulatory reforms to speed up trade settlement, as a major index rebalance scheduled to occur just days after the planned switch risks causing a spike in failed trades.

Top Japanese companies agreed to pay increases of an average 5.58% at annual labour talks that wrapped up in March, the Keidanren business lobby's preliminary data showed on Monday.

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The Possible Collapse of the U.S. Home Insurance System

A times investigation found climate change may now be a concern for every homeowner in the country..

This transcript was created using speech recognition software. While it has been reviewed by human transcribers, it may contain errors. Please review the episode audio before quoting from this transcript and email [email protected] with any questions.

From “The New York Times,” I’m Sabrina Tavernise. And this is “The Daily.”

[MUSIC PLAYING]

Today, my colleague, Christopher Flavelle, on a “Times” investigation into one of the least known and most consequential effects of climate change — insurance — and why it may now be a concern for every homeowner in the country.

It’s Wednesday, May 15.

So, Chris, you and I talked a while ago about how climate change was really wreaking havoc in the insurance market in Florida. You’ve just done an investigation that takes a look into the insurance markets more broadly and more deeply. Tell us about it.

Yeah, so I cover climate change, in particular the way climate shocks affect different parts of American life. And insurance has become a really big part of that coverage. And Florida is a great example. As hurricanes have gotten worse and more frequent, insurers are paying out more and more money to rebuild people’s homes. And that’s driving up insurance costs and ultimately driving up the cost of owning a home in Florida.

So we’re already seeing that climate impact on the housing market in Florida. My colleagues and I started to think, well, could it be that that kind of disruption is also happening in other states, not just in the obvious coastal states but maybe even through the middle of the US? So we set out to find out just how much it is happening, how much that Florida turmoil has, in fact, become really a contagion that is spreading across the country.

So how did you go about reporting this? I mean, where did you start?

All we knew at the start of this was that there was reason to think this might be a problem. If you just look at how the federal government tracks disasters around the country, there’s been a big increase almost every year in the number and severity of all kinds of disasters around the country. So we thought, OK, it’s worth trying to find out, what does that mean for insurers?

The problem is getting data on the insurance industry is actually really hard. There’s no federal regulation. There’s no government agency you can go to that holds this data. If you talk to the insurers directly, they tend to be a little reluctant to share information about what they’re going through. So we weren’t sure where to go until, finally, we realized the best people to ask are the people whose job it is to gauge the financial health of insurance companies.

Those are rating agencies. In particular, there’s one rating company called AM Best, whose whole purpose is to tell investors how healthy an insurance company is.

Whoa. So this is way down in the nuts and bolts of the US insurance industry.

Right. This is a part of the broader economy that most people would never experience. But we asked them to do something special for us. We said, hey, can you help us find the one number that would tell us reporters just how healthy or unhealthy this insurance market is state by state over time? And it turns out, there is just such a number. It’s called a combined ratio.

OK, plain English?

Plain English, it is the ratio of revenue to costs, how much money these guys take in for homeowner’s insurance and how much they pay out in costs and losses. You want your revenue to be higher than your costs. If not, you’re in trouble.

So what did you find out?

Well, we got that number for every state, going back more than a decade. And what it showed us was our suspicions were right. This market turmoil that we were seeing in Florida and California has indeed been spreading across the country. And in fact, it turns out that in 18 states, last year, the homeowner’s insurance market lost money. And that’s a big jump from 5 or 10 years ago and spells real trouble for insurance and for homeowners and for almost every part of the economy.

So the contagion was real.

Right. This is our first window showing us just how far that contagion had spread. And one of the really striking things about this data was it showed the contagion had spread to places that I wouldn’t have thought of as especially prone to climate shocks — for example, a lot of the Midwest, a lot of the Southeast. In fact, if you think of a map of the country, there was no state between Pennsylvania and the Dakotas that didn’t lose money on homeowner’s insurance last year.

So just huge parts of the middle of the US have become unprofitable for homeowner’s insurance. This market is starting to buckle under the cost of climate change.

And this is all happening really fast. When we did the Florida episode two years ago, it was a completely new phenomenon and really only in Florida. And now it’s everywhere.

Yeah. And that’s exactly what’s so striking here. The rate at which this is becoming, again, a contagion and spreading across the country is just demolishing the expectations of anyone I’ve spoken to. No one thought that this problem would affect so much of the US so quickly.

So in these states, these new places that the contagion has spread to, what exactly is happening that’s causing the insurance companies to fold up shop?

Yeah. Something really particular is happening in a lot of these states. And it’s worth noting how it’s surprised everyone. And what that is, is formally unimportant weather events, like hailstorms or windstorms, those didn’t used to be the kind of thing that would scare insurance companies. Obviously, a big problem if it destroys your home or damages your home. But for insurers, it wasn’t going to wipe them out financially.

Right. It wasn’t just a complete and utter wipeout that the company would then have to pony up a lot of money for.

Exactly. And insurers call them secondary perils, sort of a belittling term, something other than a big deal, like a hurricane.

These minor league weather events.

Right. But those are becoming so frequent and so much more intense that they can cause existential threats for insurance companies. And insurers are now fleeing states not because of hurricanes but because those former things that were small are now big. Hailstorms, wildfires in some places, previous annoyances are becoming real threats to insurers.

Chris, what’s the big picture on what insurers are actually facing? What’s happening out there numbers-wise?

This is a huge threat. In terms of the number of states where this industry is losing money, it’s more than doubled from 10 years ago to basically a third of the country. The amount they’re losing is enormous. In some states, insurers are paying out $1.25 or even $1.50 for every dollar they bring in, in revenue, which is totally unsustainable.

And the result is insurers are making changes. They are pulling back from these markets. They’re hiking premiums. And often, they’re just dropping customers. And that’s where this becomes real, not just for people who surf balance sheets and trade in the stock market. This is becoming real for homeowners around the country, who all of a sudden increasingly can’t get insurance.

So, Chris, what’s the actual implication? I mean, what happens when people in a state can’t get insurance for their homes?

Getting insurance for a home is crucial if you want to sell or buy a home. Most people can’t buy a home without a mortgage. And banks won’t issue a mortgage without home insurance. So if you’ve got a home that insurance company doesn’t want to cover, you got a real problem. You need to find insurance, or that home becomes very close to unsellable.

And as you get fewer buyers, the price goes down. So this doesn’t just hurt people who are paying for these insurance premiums. It hurts people who want to sell their homes. It even could hurt, at some point, whole local economies. If home values fall, governments take in less tax revenue. That means less money for schools and police. It also means people who get hit by disasters and have to rebuild their homes all of a sudden can’t, because their insurance isn’t available anymore. It’s hard to overstate just how big a deal this is.

And is that actually happening, Chris? I mean, are housing markets being dragged down because of this problem with the insurance markets right now?

Anecdotally, we’ve got reports that in places like Florida and Louisiana and maybe in parts of California, the difficulty of getting insurance, the crazy high cost of insurance is starting to depress demand because not everyone can afford to pay these really high costs, even if they have insurance. But what we wanted to focus on with this story was also, OK, we know where this goes eventually. But where is it beginning? What are the places that are just starting to feel these shocks from the insurance market?

And so I called around and asked insurance agents, who are the front lines of this. They’re the ones who are struggling to find insurance for homeowners. And I said, hey, is there one place that I should go if I want to understand what it looks like to homeowners when all of a sudden insurance becomes really expensive or you can’t even find it? And those insurance agents told me, if you want to see what this looks like in real life, go to a little town called Marshalltown in the middle of Iowa.

We’ll be right back.

So, Chris, you went to Marshalltown, Iowa. What did you find?

Even before I got to Marshalltown, I had some idea I was in the right spot. When I landed in Des Moines and went to rent a car, the nice woman at the desk who rented me a car, she said, what are you doing here? I said, I’m here to write a story about people in Iowa who can’t get insurance because of storms. She said, oh, yeah, I know all about that. That’s a big problem here.

Even the rental car lady.

Even the rental car lady knew something was going on. And so I got into my rental car and drove about an hour northeast of Des Moines, through some rolling hills, to this lovely little town of Marshalltown. Marshalltown is a really cute, little Midwestern town with old homes and a beautiful courthouse in the town square. And when I drove through, I couldn’t help noticing all the roofs looked new.

What does that tell you?

Turns out Marshalltown, despite being a pastoral image of Midwestern easy living, was hit by two really bad disasters in recent years — first, a devastating tornado in 2018 and then, in 2020, what’s called a derecho, a straight-line wind event that’s also just enormously damaging. And the result was lots of homes in this small town got severely damaged in a short period of time. And so when you drive down, you see all these new roofs that give you the sense that something’s going on.

So climate had come to Marshalltown?

Exactly. A place that had previously seemed maybe safe from climate change, if there is such a thing, all of a sudden was not. So I found an insurance agent in Marshalltown —

We talked to other agents but haven’t talked to many homeowners.

— named Bobby Shomo. And he invited me to his office early one morning and said, come meet some people. And so I parked on a quiet street outside of his office, across the street from the courthouse, which also had a new roof, and went into his conference room and met a procession of clients who all had versions of the same horror story.

It was more — well more of double.

A huge reduction in coverage with a huge price increase.

Some people had faced big premium hikes.

I’m just a little, small business owner. So every little bit I do feel.

They had so much trouble with their insurance company.

I was with IMT Insurance forever. And then when I moved in 2020, Bobby said they won’t insure a pool.

Some people had gotten dropped.

Where we used to see carriers canceling someone for frequency of three or four or five claims, it’s one or two now.

Some people couldn’t get the coverage they needed. But it was versions of the same tale, which is all of a sudden, having homeowner’s insurance in Marshalltown was really difficult. But I wanted to see if it was bigger than just Marshalltown. So the next day, I got back in my car and drove east to Cedar Rapids, where I met another person having a version of the same problem, a guy named Dave Langston.

Tell me about Dave.

Dave lives in a handsome, modest, little townhouse on a quiet cul-de-sac on a hill at the edge of Cedar Rapids. He’s the president of his homeowners association. There’s 17 homes on this little street. And this is just as far as you could get from a danger zone. It looks as safe as could be. But in January, they got a letter from the company that insures him and his neighbors, saying his policy was being canceled, even though it wasn’t as though they’d just been hit by some giant storm.

So then what was the reason they gave?

They didn’t give a reason. And I think people might not realize, insurers don’t have to give a reason. Insurance policies are year to year. And if your insurance company decides that you’re too much of a risk or your neighborhood is too much of a risk or your state is too much of a risk, they can just leave. They can send you a letter saying, forget it. We’re canceling your insurance. There’s almost no protection people have.

And in this case, the reason was that this insurance company was losing too much money in Iowa and didn’t want to keep on writing homeowner’s insurance in the state. That was the situation that Dave shared with tens of thousands of people across the state that were all getting similar letters.

What made Dave’s situation a little more challenging was that he couldn’t get new insurance. He tried for months through agent after agent after agent. And every company told him the same thing. We won’t cover you. Even though these homes are perfectly safe in a safe part of the state, nobody would say yes. And it took them until basically two days before their insurance policy was going to run out until they finally found new coverage that was far more expensive and far more bare-bones than what they’d had.

But at least it was something.

It was something. But the problem was it wasn’t that good. Under this new policy, if Dave’s street got hit by another big windstorm, the damage from that storm and fixing that damage would wipe out all the savings set aside by these homeowners. The deductible would be crushingly high — $120,000 — to replace those roofs if the worst happened because the insurance money just wouldn’t cover anywhere close to the cost of rebuilding.

He said to me, we didn’t do anything wrong. This is just what insurance looks like today. And today, it’s us in Cedar Rapids. Everyone, though, is going to face a situation like this eventually. And Dave is right. I talked to insurance agents around the country. And they confirmed for me that this kind of a shift towards a new type of insurance, insurance that’s more expensive and doesn’t cover as much and makes it harder to rebuild after a big disaster, it’s becoming more and more common around the country.

So, Chris, if Dave and the people you spoke to in Iowa were really evidence that your hunch was right, that the problem is spreading and rapidly, what are the possible fixes here?

The fix that people seem most hopeful about is this idea that, what if you could reduce the risk and cause there to be less damage in the first place? So what some states are doing is they’re trying to encourage homeowners to spend more money on hardening their home or adding a new roof or, if it’s a wildfire zone, cut back the vegetation, things that can reduce your risk of having really serious losses. And to help pay for that, they’re telling insurers, you’ve got to offer a discount to people who do that.

And everyone who works in this field says, in theory, that’s the right approach. The problem is, number one, hardening a home costs a fantastic amount of money. So doing this at scale is hugely expensive. Number two, it takes a long time to actually get enough homes hardened in this way that you can make a real dent for insurance companies. We’re talking about years or probably decades before that has a real effect, if it ever works.

OK. So that sounds not particularly realistic, given the urgency and the timeline we’re on here. So what else are people looking at?

Option number two is the government gets involved. And instead of most Americans buying home insurance from a private company, they start buying it from government programs that are designed to make sure that people, even in risky places, can still buy insurance. That would be just a gargantuan undertaking. The idea of the government providing homeowner’s insurance because private companies can’t or won’t would lead to one of the biggest government programs that exists, if we could even do it.

So huge change, like the federal government actually trying to write these markets by itself by providing homeowner’s insurance. But is that really feasible?

Well, in some areas, we’re actually already doing it. The government already provides flood insurance because for decades, most private insurers have not wanted to cover flood. It’s too risky. It’s too expensive. But that change, with governments taking over that role, creates a new problem of its own because the government providing flood insurance that you otherwise couldn’t get means people have been building and building in flood-prone areas because they know they can get that guaranteed flood insurance.

Interesting. So that’s a huge new downside. The government would be incentivizing people to move to places that they shouldn’t be.

That’s right. But there’s even one more problem with that approach of using the government to try to solve this problem, which is these costs keep growing. The number of billion-dollar disasters the US experiences every year keeps going up. And at some point, even if the government pays the cost through some sort of subsidized insurance, what happens when that cost is so great that we can no longer afford to pay it? That’s the really hard question that no official can answer.

So that’s pretty doomsday, Chris. Are we looking at the end of insurance?

I think it’s fair to say that we’re looking at the end of insurance as we know it, the end of insurance that means most Americans can rest assured that if they get hit by a disaster, their insurance company will provide enough money they can rebuild. That idea might be going away. And what it shows is maybe the threat of climate change isn’t quite what we thought.

Maybe instead of climate change wrecking communities in the form of a big storm or a wildfire or a flood, maybe even before those things happen, climate change can wreck communities by something as seemingly mundane and even boring as insurance. Maybe the harbinger of doom is not a giant storm but an anodyne letter from your insurance company, saying, we’re sorry to inform you we can no longer cover your home.

Maybe the future of climate change is best seen not by poring over weather data from NOAA but by poring over spreadsheets from rating firms, showing the profitability from insurance companies, and how bit by bit, that money that they’re losing around the country tells its own story. And the story is these shocks are actually already here.

Chris, as always, terrifying to talk to you.

Always a pleasure, Sabrina.

Here’s what else you should know today. On Tuesday, the United Nations has reclassified the number of women and children killed in Gaza, saying that it does not have enough identifying information to know exactly how many of the total dead are women and children. The UN now estimates that about 5,000 women and about 8,000 children have been killed, figures that are about half of what it was previously citing. The UN says the numbers dropped because it is using a more conservative estimate while waiting for information on about 10,000 other dead Gazans who have not yet been identified.

And Mike Johnson, the Speaker of the House, gave a press conference outside the court in Lower Manhattan, where Michael Cohen, the former fixer for Donald Trump, was testifying for a second day, answering questions from Trump’s lawyers. Trump is bound by a gag order. So Johnson joined other stand-ins for the former president to discredit the proceedings. Johnson, one of the most important Republicans in the country, attacked Cohen but also the trial itself, calling it a sham and political theater.

Today’s episode was produced by Nina Feldman, Shannon Lin, and Jessica Cheung. It was edited by MJ Davis Lin, with help from Michael Benoist, contains original music by Dan Powell, Marion Lozano, and Rowan Niemisto, and was engineered by Alyssa Moxley. Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly.

That’s it for “The Daily.” I’m Sabrina Tavernise. See you tomorrow.

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• May 16, 2024   •   30:47 The Make-or-Break Testimony of Michael Cohen
• May 15, 2024   •   27:03 The Possible Collapse of the U.S. Home Insurance System
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• May 3, 2024   •   25:33 The Protesters and the President

Hosted by Sabrina Tavernise

Featuring Christopher Flavelle

Produced by Nina Feldman ,  Shannon M. Lin and Jessica Cheung

Edited by MJ Davis Lin

With Michael Benoist

Original music by Dan Powell ,  Marion Lozano and Rowan Niemisto

Engineered by Alyssa Moxley

Listen and follow The Daily Apple Podcasts | Spotify | Amazon Music | YouTube

Across the United States, more frequent extreme weather is starting to cause the home insurance market to buckle, even for those who have paid their premiums dutifully year after year.

Christopher Flavelle, a climate reporter, discusses a Times investigation into one of the most consequential effects of the changes.

On today’s episode

Christopher Flavelle , a climate change reporter for The New York Times.

Background reading

As American insurers bleed cash from climate shocks , homeowners lose.

See how the home insurance crunch affects the market in each state .

Here are four takeaways from The Times’s investigation.

There are a lot of ways to listen to The Daily. Here’s how.

We aim to make transcripts available the next workday after an episode’s publication. You can find them at the top of the page.

Christopher Flavelle contributed reporting.

The Daily is made by Rachel Quester, Lynsea Garrison, Clare Toeniskoetter, Paige Cowett, Michael Simon Johnson, Brad Fisher, Chris Wood, Jessica Cheung, Stella Tan, Alexandra Leigh Young, Lisa Chow, Eric Krupke, Marc Georges, Luke Vander Ploeg, M.J. Davis Lin, Dan Powell, Sydney Harper, Mike Benoist, Liz O. Baylen, Asthaa Chaturvedi, Rachelle Bonja, Diana Nguyen, Marion Lozano, Corey Schreppel, Rob Szypko, Elisheba Ittoop, Mooj Zadie, Patricia Willens, Rowan Niemisto, Jody Becker, Rikki Novetsky, John Ketchum, Nina Feldman, Will Reid, Carlos Prieto, Ben Calhoun, Susan Lee, Lexie Diao, Mary Wilson, Alex Stern, Dan Farrell, Sophia Lanman, Shannon Lin, Diane Wong, Devon Taylor, Alyssa Moxley, Summer Thomad, Olivia Natt, Daniel Ramirez and Brendan Klinkenberg.

Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly. Special thanks to Sam Dolnick, Paula Szuchman, Lisa Tobin, Larissa Anderson, Julia Simon, Sofia Milan, Mahima Chablani, Elizabeth Davis-Moorer, Jeffrey Miranda, Renan Borelli, Maddy Masiello, Isabella Anderson and Nina Lassam.

Christopher Flavelle is a Times reporter who writes about how the United States is trying to adapt to the effects of climate change. More about Christopher Flavelle

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