Hi guys,
As some of you may have gathered from my Maya thread, I'm looking to start my own game development business. I figured maybe there are a few entrepreneurs who visit these forums, who might have some advice. Just a note, I am South Africa, so I'll give monetary values in USD for your convenience. But just note US government entrepreneurial programs obviously do not apply to me.
Some background. I am in permanent employment, as a software developer. Its a cushy job, with a decent salary (equivalent of USD 52500 per annum), but A) I'm tired of working to make someone else rich, B) being in business for the sake of business does not interest me, business for the sake of games does. So I want to start my own game development business.
I have a game in mind. I selected one fairly simple as my first game, but still not Angry Birds simple. Probably the same complexity as Space Pirates vs Zombies. More complex in some ways, simpler in others. But you get the idea. Anyway, I can do the coding no problem. I've been working with the engine of my choice for the past year, so I know it quite well. Working part time on the game just does not cut it - progress is exceedingly slow, and I think if I dont work full time on the game, it will never happen. Regarding artwork and modelling, I need all of that. I've been speaking with a few guys who can do it for me. The highest estimate for what I need, that I've received so far, is about USD 11k. Some estimates are a little lower. For the record, its 24 fairly low poly (by modern standards) animated models, with fairly simple animations. Plus some other static models, some texture work, and some interface work. Also these guys are all willing to lower their fee for a share in the business, however, they still need to eat and support their families. On my side, I estimate that the game will take about 6 months to complete, working full time. So I need living expenses for probably closer to 12 months. Living expenses, at a rough estimate, are about USD 1500 per month, including everything. I dont own a house, so no mortgage, just rent. Car is fully paid off. No debts in other words.
Budget... I have USD 6.75k in shares/stocks. I plan to cash my pension in, which means I should get about 12k. Thats assuming the government taxes that at 33%, which they probably will (South African tax rates are very high unfortunately). So about USD 18k or so in total.
My problem is that the banks wont loan me money without security equal to the value of the loan. So say I wanted to borrow another 18k, I would need another 18k, besides the 18k I already want to contribute, to give to the bank. I would actually have to sign it over to them. In the event that the business goes belly up, the bank simply does not return whatever asset you gave to them. There is a more technical term than simply signing it over, but thats what it amounts to. Can be any asset, or a mortgage, but I think it may have something to do with how much of the mortgage is paid off. So yes, the banks will essentially not take a risk on a new business.
Regarding government help, there are programs, but the biggest one has come back to me and said that they will only lend me money if I can give them a signed contract stating that I have a buyer for the game. And by buyer, I think they mean retailer. I explained to them that this is not how the game industry works, etc etc, nobody will give me a contract without a game to show them, blah blah blah, but they dont want to hear it. Thats the way they evaluate risk. So I need a game to get a contract, to get further financing.
Equity? I know beggars should not be choosers, but I would like to avoid that, if I can. I just dont want anyone owning a part of my business, that is not working for the business 24/7. So I havent pursued this option at all.
Kickstarter/Crowdfunding? Kickstarter is not an option for me, being South African. Regarding the rest, indiegogo etc, as with the contract, we need a game first. At least some screenshots and a demo video. Which we dont have, and probably wont have until I quit my job.
Which leads me to what I'm considering doing - quitting my job, and paying for the artwork guy to make only the stuff needed to make a demo, and surviving on my assets until I can make this demo, and use that demo to get crowdfunding/government finance. I'm going to convert back to South African Rands because its much easier for me to think in Rands. I will have close to R150 000 after I quit. If I spend roughly R50 000 on artwork/modelling, I can have enough done to make a decent demo, and leave two thirds of the budget for living expenses and hosting expenses. Not that hosting expenses are a lot compared to the other expenses, at the moment. Lets say I aim to have a good demo/beta finished in 3 months, that money should let me survive for about 6. So after 3 months, I can start the ball rolling with regards to crowd funding, submitting to Steam, going for government finance, etc etc. If, after 6 months, I am nowhere, I throw in the towel, and get a job. Work shouldnt be that hard to come by. Skilled IT staff are ridiculously short in supply in South Africa. And I'll have close to 6 years of experience by then.
The upside of not using debt is that, should it fail, it fails and I move on. With debt, I could end up paying that back over years. Remember I have no dependents and no debt at the moment. The risk is that the money I have is a little short compared to what I think it might take. Perhaps the time and money I have will be enough. It is a fairly simple game after all.
The obvious question - will I tell you guys about the game? I think I want to play my cards fairly close to my chest, until such time as I have something concrete to show, if thats okay.
As some of you may have gathered from my Maya thread, I'm looking to start my own game development business. I figured maybe there are a few entrepreneurs who visit these forums, who might have some advice. Just a note, I am South Africa, so I'll give monetary values in USD for your convenience. But just note US government entrepreneurial programs obviously do not apply to me.
Some background. I am in permanent employment, as a software developer. Its a cushy job, with a decent salary (equivalent of USD 52500 per annum), but A) I'm tired of working to make someone else rich, B) being in business for the sake of business does not interest me, business for the sake of games does. So I want to start my own game development business.
I have a game in mind. I selected one fairly simple as my first game, but still not Angry Birds simple. Probably the same complexity as Space Pirates vs Zombies. More complex in some ways, simpler in others. But you get the idea. Anyway, I can do the coding no problem. I've been working with the engine of my choice for the past year, so I know it quite well. Working part time on the game just does not cut it - progress is exceedingly slow, and I think if I dont work full time on the game, it will never happen. Regarding artwork and modelling, I need all of that. I've been speaking with a few guys who can do it for me. The highest estimate for what I need, that I've received so far, is about USD 11k. Some estimates are a little lower. For the record, its 24 fairly low poly (by modern standards) animated models, with fairly simple animations. Plus some other static models, some texture work, and some interface work. Also these guys are all willing to lower their fee for a share in the business, however, they still need to eat and support their families. On my side, I estimate that the game will take about 6 months to complete, working full time. So I need living expenses for probably closer to 12 months. Living expenses, at a rough estimate, are about USD 1500 per month, including everything. I dont own a house, so no mortgage, just rent. Car is fully paid off. No debts in other words.
Budget... I have USD 6.75k in shares/stocks. I plan to cash my pension in, which means I should get about 12k. Thats assuming the government taxes that at 33%, which they probably will (South African tax rates are very high unfortunately). So about USD 18k or so in total.
My problem is that the banks wont loan me money without security equal to the value of the loan. So say I wanted to borrow another 18k, I would need another 18k, besides the 18k I already want to contribute, to give to the bank. I would actually have to sign it over to them. In the event that the business goes belly up, the bank simply does not return whatever asset you gave to them. There is a more technical term than simply signing it over, but thats what it amounts to. Can be any asset, or a mortgage, but I think it may have something to do with how much of the mortgage is paid off. So yes, the banks will essentially not take a risk on a new business.
Regarding government help, there are programs, but the biggest one has come back to me and said that they will only lend me money if I can give them a signed contract stating that I have a buyer for the game. And by buyer, I think they mean retailer. I explained to them that this is not how the game industry works, etc etc, nobody will give me a contract without a game to show them, blah blah blah, but they dont want to hear it. Thats the way they evaluate risk. So I need a game to get a contract, to get further financing.
Equity? I know beggars should not be choosers, but I would like to avoid that, if I can. I just dont want anyone owning a part of my business, that is not working for the business 24/7. So I havent pursued this option at all.
Kickstarter/Crowdfunding? Kickstarter is not an option for me, being South African. Regarding the rest, indiegogo etc, as with the contract, we need a game first. At least some screenshots and a demo video. Which we dont have, and probably wont have until I quit my job.
Which leads me to what I'm considering doing - quitting my job, and paying for the artwork guy to make only the stuff needed to make a demo, and surviving on my assets until I can make this demo, and use that demo to get crowdfunding/government finance. I'm going to convert back to South African Rands because its much easier for me to think in Rands. I will have close to R150 000 after I quit. If I spend roughly R50 000 on artwork/modelling, I can have enough done to make a decent demo, and leave two thirds of the budget for living expenses and hosting expenses. Not that hosting expenses are a lot compared to the other expenses, at the moment. Lets say I aim to have a good demo/beta finished in 3 months, that money should let me survive for about 6. So after 3 months, I can start the ball rolling with regards to crowd funding, submitting to Steam, going for government finance, etc etc. If, after 6 months, I am nowhere, I throw in the towel, and get a job. Work shouldnt be that hard to come by. Skilled IT staff are ridiculously short in supply in South Africa. And I'll have close to 6 years of experience by then.
The upside of not using debt is that, should it fail, it fails and I move on. With debt, I could end up paying that back over years. Remember I have no dependents and no debt at the moment. The risk is that the money I have is a little short compared to what I think it might take. Perhaps the time and money I have will be enough. It is a fairly simple game after all.
The obvious question - will I tell you guys about the game? I think I want to play my cards fairly close to my chest, until such time as I have something concrete to show, if thats okay.
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