115 Things to Know About Running Your Company

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The next 115 tips were culled from my own experience as well as that of many of the most successful people in the game industry. Everyone has a different opinion, and every company has different needs, but these were some common themes and advice voiced.

Getting Started

#4 The pitch build is everything, so keep the company stuff like a Web site or a business card and stationery to a minimum until you're one month away from showing your work.

#5 The scale of pitch materials from cheapest to most expensive is: A. Design plus story- boards ; B. Animated game mockup ; C. A rendered .AVI; D. Playable demo with art and music; E. Full level/mission demo.

#6 If you're really strapped and looking to prove yourself, try using a free engine off the Web or modding another game to incorporate yours. Check the licenses to make sure you're allowed to make this use of the software.

#7 Get your attorney and accountant sooner rather than later.

#8 If your landlord wants you to personally guarantee the lease, ask if he'll take a letter of credit from your publisher instead.

#9 There are tools out there to help you build your prototype. Some, like virtools, cost $5K to $10k; others can be found free or under GPL on the Web.

#10 Two excellent resources: www. gamasutra .com and www.igda.org. Game-specific legal tips can be found in the famous last words column at idga.org and at www.gamelawyer.com. Take a look at www.gdconf.com, which always has interesting speeches from the previous Game Developer's Conference. Biz Dev, Inc. has a great series called Publishers Speak that asks major figures in publishing everything you want to know but couldn't get within 10 feet to ask. Check it out at www.bizdev-inc.com under "Publications."

Figure 1.3. The IGDA is dedicated to help ing independent game develop ers.They've got a great Web site at www.igda.org .

#11 Starting on smaller platforms like GBA and wireless is good if you're learning. You can buy GBA emulators and developer tools to experiment. If you're looking to get into level design or programming, handheld and wireless is great; if you're an artist or a team looking to get a PC or console development engagement, your publisher needs to see the ability to handle massive amounts of art assets. If you're more advanced, try doing a PC game demo or buying one of the Linux-based PlayStation 2 developer kits and making a pitch build with that.

#12 If possible, choose co-founders who can roll up their sleeves and program.

#13 Join a successful developer before you do it on your own.

Finance

#14 One pet peeve of publishers is "chasing milestones": A developer overspends on the current project, hunts down another, and takes his best (if not most) people off the first project to get the second one going, leaving the publisher to "chase" the last milestones.

#15 Publishers' missing milestones and late payment is the rule of the biz. If you want to survive, maintain a cash cushion.

#16 If you are building an innovative product or technology into your game, budget at least 1.5 times the expected cost for that component.

#17 You have to impress a game agent as much as you have to impress a publisher.

#18 If you want to be bought out, you'll need a history of good titles that have come out on time, great technology that can be leveraged into other games , and a professional attitude (no shouting at publishers).

#19 You have to be incredibly well-organized to use completion bonding. You can't change your mind about what the game's going to be.

#20 If you do self-fund, expect around 50 percent of net wholesale as a royalty.

Human Resources

#21 Avoid long hours, unclear reporting structure, and unclear decision-making.

#22 If you're hiring a manager, the candidates should be interviewed by everyone they'll be managing. Be sure you've got your employees ' buy-in before hiring anyone .

#23 Hiring for the long run means starting people at reasonable salaries. Many game developers have very low turnover , but you're still expected to give raises, so keep this in mind when setting salaries.

#24 Run it like a company, not a clubhouse. People have to be accountable. Fire those who don't fulfill their responsibilities. Publicize policies and enforce them equally.

#25 Don't poach. At least, don't poach from those with whom your company has good relations.

#26 Have regularly scheduled meetings by team, executive level, and any other logical grouping. Face to face communication is the grease that makes a company's wheels run smoothly.

#27 Always offer people the opportunity to contribute new game ideas at any point.

#28 Pay yourself and your people reasonably but not exorbitantly.

#29 Talent is important, but a compatible personality is just as important. When colleagues like each other, life is a lot easier for everyone.

#30 There are lots of ways to pay people. Try giving an expense account for games. It's a cheap thrill that makes your employees more effective.

#31 Do you tell your employees about trouble? Most developers tell their employees what is going on when their actions can help solve the problem but try to avoid distracting employees with other issues.

#32 Don't forgetpeople are not machines. Employees have spiritual and emotional needs as well as financial ones, and part of your job as manager is to meet those needs (or hire someone who can).

#33 There are two camps when it comes to office design: those who like open bullpen styles and those who believe in having a door that can be closed. The bullpen almost guarantees sufficient team communication, and the individual office almost guarantees greater productivity. One effective compromise: bullpens with quiet rules.

Figure 1.4. If you've got a bullpen- style office, noise- canceling headphones can help developers stay in the alpha state (tie optional).

#34 Delegate. Just because you can do it yourself doesn't mean that you should .

#35 Don't get emotional. When someone says something that makes you want to rip her head off, stop and ask yourself, "WHY did she say that" and "What is my GOAL." That will keep you calm and help you find the solution.

#36 Just because you're the CEO, don't think you get a big salary before you've earned anything.

#37 Stress is very hard on your health. You can only go one month at crazy hours before you start to lose your health and your judgment.

#38 Starting a company in an area far from talent will make it difficult to attract and retain employees.

#39 If you have to have layoffs, make sure you go far enough to save the company.

#40 Hire a full time office manager and IS person at your earliest convenience, which probably shouldn't be any later than hiring your sixteenth employee.

#41 Everyone should be an at-will employee.

#42 If you think there's a problem, there's a problem.

#43 The boss should get an annual review by the employees.

Publisher Relations

#44 If you want to work in a platform that you haven't shipped, your best bet is to make a prototype that is functional on that platform.

#45 Self-funding can backfire: If a manager at the publisher took a $4M bet on a project, he'll be very concerned with recouping because that product reflects on him personally. The publisher might not put as much money behind your product if it doesn't have to worry about recouping on it.

#46 Pitch materials for next game four to eight months before production starts.

#47 Don't fight for every inch with your publisherit can poison the relationship.

#48 If you are signing a long- term contract, put some thought into your share of revenue from subscription services, wireless games, and digital distribution.

#49 The more risk the publisher takes, the less lucrative your deal is.

#50 If you stop development, it's considered a hostile act. A hostile act amounts to shooting yourself in the foot .

#51 Self-funding your games is only so appealing to a publisher because its financial risk comes from two ends: developing the game and spending the money to market and distribute it. As one publisher said: "Even if we get a free product, getting it out the door is expensive."

#52 While you can contract for some kind of marketing minimum, marketing dollars are generally decided after a product is developed. What makes a publisher want to throw down for your product? 1. A good game; 2. For which they own the sequel and franchise rights; 3. That had a sexy E3 demo; and 4. Has gotten consumers and retail buyers interested.

#53 Publishers want to see experience developing for a given platform; if you are trying to break into a new platform, make it easier for the publisher to say yes by getting yourself licensed by the manufacturer.

#54 When a publisher is evaluating your company, it wants to see a tool that enables non-technical staff to put an asset into the game, hit a button, and be able to see that asset running in-game on a console, without having to run to a programmer.

#55 Publishers look at the compatibility of your technology to the product: does your renderer match the art style the project needs, is your animation motion-capture if it's a realistic fighting game, and so on.

#56 Console manufacturers want publishers to release games that show off their console's unique properties. Publishers want to see that you understand the peccadilloes of each platform and have ideas for how you're going to highlight those unique properties with your game.

#57 If you want to work on consoles, publishers like to see low-level microcode skills, which often help optimize the code for the console.

#58 Remember the international and the port market when making your game. Build your game to be modular and port-friendly, and you increase the odds of getting into other platforms. For international: Schedule your localizations so that U.S. and international releases can happen concurrently. During development isolate all localizable elements, including audio and video. QA needs to test on different hardware running different local preferences. Don't forget that it's not just your game that gets localized; you'll need to translate the box, sales material, and anything else used to sell the game. Check out Octagon's white paper on maximizing international revenue from games: http://www.octagon1.com/resources/wtpapersframe.htm.

#59 Don't make a game that copies another game; you should be able, in one sentence , to persuade the publisher and the consumer of your game's unique selling properties. Maybe two sentences.

#60 Extra features don't always make a game better.

#61 Always have the ability to audit.

#62 Own your technology. Full stop.

#63 Publishers want teams with experience, but what they really want is teams with experience together (experience meaning shipped product). As one executive put it: "I don't even care if they put it out with a small publisher; I want to see a team get through one battle before we sign them."

#64 Publishers will generally only develop a game that has sequel and franchise potential (and where they own the rights to those sequels/franchises).

#65 The decision to produce your game happens by committee, and usually that committee is international. In other words, the European product development/sales and marketing group has to look at the sell sheet and say, "I think we can sell 60K of this game." From there, it is often a cost-benefit analysis: how many copies in total does the company think it can sell, at what marketing, distribution, and development cost, and how much profit does that leave?

#66 Publishers, developers, and retailers are all feeling similar pain right now: the cost of development is going up, team size is going up, the price for games probably won't go up, and shelf space is bursting with too much product.

#67 Contract terms may not translate to behavior.

#68 If the deal sounds too good to be true, it might be. Find out if the publisher has been paying milestones.

#69 Even when your publisher is stepping on your toes, try to avoid the adversarial legal approach if possible. That said, sometimes the adversarial legal approach is the only one that works.

#70 A publisher doesn't want to feel like its milestone payment is all that stands between your company and bankruptcy. If you do find yourself in this position, some developers advocate letting the publisher know so that they understand a late milestone payment equals no payroll equals no game. Other developers think it is best to camouflage this as best you can because it may negatively impact your ability to get other development assignments from the publisher.

#71 Many developers create a pitch build based on an original idea, but with an eye toward working on a license. One developer noted that, frequently, the purported reason for the meeting is to show the latest prototype, but it's really to talk about what license the publisher needs developed.

#72 Why go with a publisher at all? Publishers are a huge help managing the worldwide retail channel. They add value to that processthey have the relationship with manufacturing, logistical support in simultaneous launch, managing receivables from buyers. This isolates the developer from the publishing risk.

#73 Piracy is a big problem, and it's getting bigger.

Production

#74 Consider outsourcing.

#75 Many developers cautioned against spending beyond your budget because you think you will make it back in royalties. "Never happens," was one successful developer's terse dismissal.

#76 Constantly set your external producer's expectations. Most problems with external producers are the result of mismatched expectations. Easy example: If you're going to be late, or later, the consequences will be immeasurably better if you are honest with yourself and your producer (instead of deluding yourself that you'll catch up).

#77 Corollary: Bad news probably shouldn't go from producer to external producer. It may make more sense and reduce miscommunication by having the CEO or executive producer communicate the news directly to the external producer's boss.

#78 When your external producer changes more than once during a project, that may mean you should be communicating with his boss and having the boss review the milestones to ensure continuity for your company.

#79 It's important to expect things to go wrong during production because it's human nature to be optimistic and underbudget/underschedule.

#80 Have one person, a good communicator, designated as the initial point of contact for all publishing side personnel (production, sales and marketing, and others).

#81 Have clear deliverables with objective standards (where possible). Be sure you and the publisher know exactly what the deliverables are.

#82 At this point, developers need to have at least a passing knowledge of all platforms.

Figure 1.5. Developers may want to think about how to share revenue from subscription services such as Xbox Live.

Figure 1.6. A developer should aspire to proficiency with all available platforms.

#83 If you're developing a new toolset, it may not be best to make the tools sequentially. Try building a prototype, which requires taking a first pass at most of those tools and will help you figure out how much time and money it will take to build those tools.

#84 Eat your vegetables before dessert. Pre-production can make or break a development. Plan it out, make benchmarks, devise visual tools to track progress, give everything a contingency plan.

#85 When pacing the milestones, put the hardest work up front. The back end is always difficult, so do what you can to make it easier.

#86 Ask for a seasoned external producer, even if it means sharing him or her with another project. As one developer put it: "If the person you're negotiating with doesn't respect that desire , you're talking to the wrong publisher."

#87 Prototypes beat 100-page design documents any day; it's hard to predict fun on paper.

#88 Keep the timeline visual, with graphs. Video game developers hate to read and hate to read repetitive documents. Speak their language; make it visual.

#89 Pre-production should articulate all of the assets and have contingency plans. If you've designed for 60 widgets, but it's taken you nine months to build 7 widgets, the pre-production plan should dictate that the widget count is cut or widget production is outsourced.

#90 Keep an eye on other games coming out, and delegate this responsibility to your team. Don't get caught where your game is redundant.

#91 Always make your technology modular and scalable.

#92 Consider having an in-house sound studio when you can afford it.

#93 Put in a high fringe benefit amount.

#94 Put in more software and hardware maintenance and expense fees than you can imagine. Everyone always ends up buying more hardware.

#95 1.25 to 1.5 times what you think you need is what you'll use.

#96 Keep your external producer updated because the decision to cancel or fund further if you're in trouble is heavily influenced by the producer. Get to know them well as people.

#97 Ninety percent of the budget is personnel.

#98 Before expanding into more teams, remember that managing two projects can be 6 times as hard, and three projects can be 20 times as hard.

#99 If you make a prototype for your pitch build, you can save yourself time and money by making it scalable into the full game.

#100 It is hard to hear criticism about your product when you are working so hard to get it made, but there are three groups to take seriously, even if you don't implement their advice: developer relations at the console manufacturer, developer relations at the publisher, and consumer testing (which can start at around 30 percent). Every suggestion deserves a rational response, at the very least: "I hear you and this is why we aren't doing/can't do that."

#101 Nobody knows what didn't make it into the game at the end of the day. If you're falling behind, be ruthless : cut length and scope, like missions, levels, and characters .

Licensing

#102 If you're working on a licensed film or television property, see what kind of assets you can get from the producer to incorporate in your game.

#103 Strategy guides are a huge part of the licensing revenue.

Figure 1.7. Strategy guides are a big part of licensing revenue.

#104 If you're hiring an entertainment agent, have someone make a realistic assessment of opportunities for your property, devise a strategy for pursuing them, and assess the time and resources it will take to pursue them. You only have so much time to spend chasing opportunities, so beware the agent who blows sunshine up your skirt.

#105 Many developers create their own technology and decide not to go to the effort of marketing it for licensing (which has an uncertain return) and instead create it with an eye toward recycling it through three or four games (which is a more predictable return).

#106 Be careful if you're making original properties that you realize the potential for licensing into OEM and entertainment.

#107 Be proactive if there's a license you really want. Movie companies are interested in your ideas. Your most persuasive pitch will have funding (or bonding) and a publisher behind it.

#108 If you want to work with Hollywood, get hip-waders and a damn good lawyer..

#109 If you are releasing a product abroad and don't know the market, get a distributor you can trust. Look at who else they distribute, contact trade associations like the IDGA to see if they've been the subject of an enforcement action. You can also try asking local counsel specializing in the field.

#110 Include mod license language and restrictions in the game's end user license agreement as well as with any tool kits.

Wireless

#111 The lack of standardization in mobile devices is a problem, but not necessarily an expensive one. The main difference is usually re-sizing your graphics, changing the I/O, and porting to the applicable language (like Brew, J2ME, or Simbian).

Figure 1.8. The lack of standardiza tion in mobile headsets makes wireless game development somewhat more complex.

#112 External producers for wireless games may not be as seasoned as those you are used to.

#113 Hardware testing used to be expensive, but the trend now is for carriers to subsidize the testing houses , bringing the cost down dramatically.

#114 Expect the carriers to be very involved in the process.

#115 Carriers worldwide are providing content providers with up to 80 percent of purchase revenue. It is unclear if this will be the profit split in the future.

#116 The publisher's role in wireless gaming: 1. Provide development fees ($10K to 60K) against royalties and 2. provide an "in" with the carrier. Many carriers won't listen to pitches from independent developers because of high volume of submissions.

#117 Standardization of technology is unlikely anytime soon.

#118 The market for licensed product is still germinal, and prices have yet to settle .

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