Video game companies design and program games played on PCs, cell phones, consoles, and virtual reality devices. These games are bought online and in brick-and-mortar stores. They often prove quite powerful in connecting people, boosting confidence, providing joy, and improving hand-eye coordination.
So, let’s learn how you can set up a Video Game Development Company and whether it is the perfect fit for you.
10 Crucial Steps To Start A Video Game Development Company
There is more to Starting a Company than just registering it with the state. We have created this simple guide to starting your own Video Game Development Company. These ten steps will ensure that your business is well planned out, properly registered, and legally compliant.
- Plan Your Business
A clear plan is necessary for success as an entrepreneur. It will definitely help you map out the specifications of your business and discover some unknowns. However, a few essential topics to consider are:
- What are the start-up and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will be your business name?
Luckily, we have done a lot of research on this for you.
What Are The Costs Of Opening A Video Game Business?
The business requires many computers, monitors, specialized computer software, video game consoles, printers, insurance, employees, and a facility to develop the games. Plan on investing ten thousand dollars in the initial equipment and facility. However, if you plan on launching a video game development company from your apartment, home, or any other space without the assistance of staff, it is possible to develop a game with a dynamic computer and specialized software. Although this approach will save enough money, it will prove to be an arduous effort unless you have great experience in making video games. So, if you decide on opening a video game business, the average cost will be $12,272 according to Starter Story.
What Are The Ongoing Expenses For A Video Game Business?
You must replace and update the software and hardware. Plan on spending many hundred dollars per month on office sundries, utilities, and high-speed internet. Employees who work on different parts of the game will demand a yearly salary between $40,000 and $100,000 or more. A manager, accountant, or marketing expert will demand a salary of $30,000 to $60,000 per year. A beta tester and receptionist will earn $08 to $15 per hour.
Who Is The Target Market?
The target market is enthusiastic gamers. Everyone from children to middle-aged adults enjoys playing video games. Especially, millennials are passionate about video games. It makes sense to target these youths as they have enough discretionary income to buy video games on a regular basis.
How Does A Video Game Business Make Money?
This type of business makes money by developing fun and interesting video games for PCs, arcades, and video game consoles. These games are sold to the public. Also, there is the possibility of making money through merchandising like creating T-shirts, statuettes, etc.
How Much Can You Charge Customers?
Video games usually cost between $19.99 and $69.99. But high-quality video games are sold for $49.99 to $59.99 when they are brand new.
How Much Profit Can A Video Game Business Make?
This business has the potential to make a hundred or a million dollars. Video games have never been so popular. The rise of online gaming has made them much more appealing to the masses. Therefore, the profit potential is unlimited.
How Can You Make Your Video Game Business More Profitable?
Provide gamers with the option of buying in-game upgrades. For an instance, Activision Blizzard has made millions from in-game upgrades without investing in additional Game Development Services or extensive programming for contemporary games. It is also possible to set up agreements with console providers to save a portion of the proceeds generated by online play fees.
Here is what Ron Carmel the co-creator of World of Goo (the highest-rated mobile game of all time according to Metacritic) thinks about being more profitable.
What Will Be Your Business Name?
Choosing the right name is critical and challenging. If you start a sole proprietorship, you might want to run under a business name rather than your own name.
When registering a business name, we recommend you research it by checking:
- State’s business records
- State and federal trademark records
- Social media platforms
- Web domain availability
It is very important to protect your domain name before someone else does. Search for the domain on GoDaddy.
Form A Legal Entity & Register Your Video Game Company
The most common types of business structures are a partnership, sole proprietorship, corporation, and limited liability company (LLC).
If your video Game Development Company is sued, establishing a legal business entity, such as a corporation or LLC protects you from being held personally liable.
You can form an LLC by yourself and pay only the minimal state LLC costs, or you can hire one of the excellent LLC Services for a small, additional fee.
Register For Taxes
You will need to register for a number of state and federal taxes before you can open your business.
In order to register for taxes, you will have to apply for EIN. It is really easy and free. You can get your EIN for free via fax, through the IRS website, or by mail.
Small Business Taxes
Depending on which business structure you select, you might have various options for how your business will be taxed. For instance, some LLCs can benefit from being taxed as an S corporation. However, there are particular state taxes that might apply to your business.
Open A Business Bank Account And Credit Card
Utilizing dedicated business banking and credit accounts is necessary for personal asset protection.
When your personal and business accounts are combined, your personal assets, like your car, home, and other valuables are at risk in the event your business is sued. Thus, in business law, this is referred to as piercing your corporate veil.
Open A Business Bank Account
When applying for business loans, opening a business bank account besides being a requirement:
- Separates your personal assets from your business’s assets, which is essential for personal asset protection.
- Makes accounting and tax filing easier.
Open Net 30 Accounts
Net 30 accounts are used to build business credit as well as increase the cash flow. With a net 30 account, businesses purchase goods and repay the full balance within 30 days.
NetMany net 30 credit vendors inform the major business credit agencies (Experian Business, Equifax Business Credit, Dun, and Bradstreet). This is how businesses establish business credit so they can be eligible for credit cards and other lines of credit.
Get A Business Credit Card
Getting a business credit card helps you:
- Separate personal and company expenses by putting your company’s expenses all in one place.
- Build your business’s credit history, which can be useful to increase money later on.
Set Up Business Accounting for Video Game Company
Recording your multiple expenses and sources of income is crucial to understand the financial performance of your business. Also, keeping detailed and accurate accounts greatly simplifies your annual tax filing.
Obtain Necessary Permits And Licenses
Failure to obtain necessary licenses and permits can result in hefty fines or even make your business shut down.
State And Local Business Licensing Requirements
You may need certain permits and licenses to operate a video game development company.
Hence, Know more about licensing requirements in your state by visiting “sba.gov” to state permits and licenses.
For information about local permits and licenses:
- Check with your city or town clerk’s office.
- Get help from one of the local associations listed in the US Small Business Associations directory of local business resources.
Trademark And Copyright Protection
If you are creating a new brand, concept, design, or product, it is wise to protect your rights by registering for the appropriate copyrights and trademarks. The nature of legal requirements in far education is ever-changing, especially regarding copyright laws.
Get Business Insurance
Just as with permits and licenses, your business needs insurance to operate the Video Animation Services and Game Development Company safely and lawfully. Business insurance protects your company’s financial well-being in the event of a covered loss.
There are many types of insurance policies created for various types of businesses with various risks. However, if you are unsure of the types of risks your business may face, start with General Liability Insurance. This is the most common coverage small businesses need, so it is an excellent place to start for your business.
Another noteworthy insurance policy that numerous businesses need is Workers’ Compensation Insurance. If your business has employees, it is a great chance that your state will ask you to carry Workers’ Compensation Coverage.
Define Your Video Game Brand
Your brand is what your company stands for and how it is perceived by the public. Therefore, a powerful brand will help your business stand out from the competition.
Create the best unique logo for your business. If you already have it, you can add it to a QR code. Also, create a code for your business cards and publications in order to spread awareness for your new website.
How To Promote And Market Your Game Development Company?
Connect to potential game buyers through the channels they are mostly exposed to. Most gamers are active on the web, including YouTube and game streaming sites. Advertise on these websites. Also, some video game companies have found success in advertising with magazine ads and TV commercials. The promotional method of your company will ultimately hinge on the game you are trying to sell. Perform market research to determine the appropriate channels to best connect with video game players who are likely to be interested in the specific video games your company creates.
How To Keep Customers Coming Back?
The best way to retain customers is to develop a high-quality video game that turns out to be enjoyable for a long time. Many video game players build loyalty to specific video game companies based on their enjoyment of the company’s preliminary games. Strive to create a deep yet meaningful connection with gamers by providing enjoyable content, and they will eventually become loyal customers. Like a free game Development Company, also offer a free download of one of your game’s levels or stages to whet customers’ appetite.
Build Your Video Game Company Website
Once you have defined your brand and got Professional Logo Design Services, the next step is to build a website for your Video Game development company.
While building a website is an important step, some may fear that it is out of their reach because they don’t have any website-creating experience. While this may have been a reasonable fear in 2015, web technology has seen big advancements in the last few years that make the lives of start-up owners much simpler.
Here are the main reasons why you should not delay creating your website:
- All legitimate businesses have websites. The industry or size of your business does not matter when it comes to starting your business online.
- Social media accounts like LinkedIn profiles or Facebook pages are not a replacement for a company website that you own.
- Website builder tools, like GoDaddy, have made developing a basic website extremely simple. Other popular website builders are WIX, WordPress, Weebly, Shopify, and Squarespace.
Set Up Your Business Phone System
Setting up a business phone system is one of the best ways to keep your personal and business lives separate and private. That is not the only benefit. It also gives your business legitimacy, helps you make your business more automated, and easier for prospective customers to find and contact you.
Thankfully, there are many top companies offering their Best Services to Entrepreneurs who desire to set up a business phone system.
Is This Business Right For You?
If you are looking for a way to entertain and provide the public with an opportunity to enjoy a shared experience, setting up a video game business will prove quite beneficial. Video games bring people together for fun and excitement. They also connect them by way of online gaming experiences. It will surely help to have a background in designing, computer science, or in electrical engineering if you decide to start a video game business. Also, your company can provide the Best Mobile Application Development Services to help other businesses create appealing console games, mobile gaming apps, and AR/VR gaming experiences.