Understanding Financial Issues in the Games Industry

Understanding Financial Issues in the Games Industry


In this article I will be writing about games which commercially failed and commercially succeeded and the costs involved in creating games, how it’s funded and issues facing small and indie studios.

Costs involved in creating a game

In this part I will explain the costs of developing a game and why some games were financial failures. When creating a game there will be costs. For example you will need to pay the production team for creating and coding the game, maybe rent out a building, buy hardware which will be compatible, buy software (but now game engines are becoming free.)
Some games get crowdfunding to help with costs, websites like Kickstarter, Indiegogo and GoFundMe are all crowdfunding sites. But some games like Mighty No. 9 received a massive income from Kickstarter but the game got delayed many times and didn’t live up to the expectations of the supporters and fans.
The advantages of crowdfunded games are that you are getting supported by fans who will be loyal to you/the company. The advantages for the supporters will be happy if the game takes off. Also if a backer’s reward or a lower price is offered the supporters will be thankful as they are given a reward for supporting a crowdfunded game.
The disadvantages of crowdfunded games are that they might not reach their initial money goal. If the game reaches a particular goal the fans expectations may be too high and expect feedback on the game’s progress. However a fan’s ambition may often be clouded due to the ability of the developer to deliver. Also there’s no chance that all backers will get the game that they thought they pledged for. For example Broken Age backers were disappointed in the lack of difficulty in the first act of the game.
In the Indie business there are many, many problems for example most indie companies can’t support themselves financially. Most indie businesses tend to work in small teams, this creates some major problems. These problems are long development times, unable to react in fast changing markets and no parallel tasking (running a full marketing campaign whilst the game is still in development.) Another problem facing small indie businesses are that most of the developers are relatively young. Some older developers try to cling onto their childhood, with retro styling or remaking the games they played as kids. Poor working conditions and pay deter young and old people. If the indie developers are making a game about WWII it could lack historical accuracy as they have insufficient information about the events which took place.
In conclusion it is easy to create the game but getting the essential tools is hard to acquire as there are many roadblocks in the way. But there are alternatives for example using free game engines like UE4 (Unreal Engine 4) and Unity, starting a successful Kickstarter project and getting a loyal company to support you.


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