The Market, and How You Fit into It


This section of the business plan might be the most important, because it shows why your business should exist in the first place. Avoid the temptation to skimp on it to save pages for the financial forecasts: in the eyes of the shrewd investor, cash flow statements without a credible market opportunity are worthless.

Your Products and Services

First, describe what your company will do, and how it will distinguish itself from the competition. Examples of unique distinguishing characteristics might include:

  • Exceptional talent. Do your partners and yourself have marketable industry credentials, advanced degrees, or unusual backgrounds?

  • Unique intellectual property. Have you developed characters that focus groups have identified as the next Pok mon? Or have you secured an exclusive license to an upcoming film franchise's gaming rights?

  • Financial advantages. Will you be able to develop better games for less money than the competition? Why? Is the cost of living very low in your state or country? Is your national government subsidizing high-tech companies?

  • Geographic specificities. Is your studio located in a high-density game development area, with plenty of competent talent available to be hired? Or are you the only game company in an area teeming with exceptional 3D artists?

Current Market Conditions

Telling the reader that the game industry's total sales have experienced double-digit growth every year since 1980 is not enough: you must also demonstrate knowledge of the specific segment(s) you are attacking. Who are your customers? Are they used to buying what you propose to sell? If so, is there room for additional suppliers? If not, how will you convince them of the benefits of leaving their current partners to do business with you?

The best way to do this is to identify an obvious need in the marketplace. For example, if you want to start a game programming school, ask local companies how long it takes to fill an opening, how many technical positions they have available, and how many more art and production jobs they would be able to create if there were enough qualified programmers to fill the team. (In some countries, the answer to that last question might help you secure funding from government agencies.)

You must also identify trends that support your approach. If you want to develop games for publishers on a work-for-hire basis, show that licensed properties account for an ever-increasing percentage of the best-sellers list on your platform of choice. If you prefer to create your own characters, show that the market for intellectual property of their kind is large, growing, and/or underserved. Be precise, and aim where the competition isn't too strong: while there is a seemingly inexhaustible demand for fantasy, the teenage-wizard-at-boarding-school-in-England sub-genre is probably saturated until at least 2010.

Your Marketing Strategy

Finally, demonstrate how you will carve your own niche in the difficult game development market. Have you secured the services of a reputed agent? Will you begin by developing a low-cost, low-risk title that can be played on personal digital assistants (PDAs), and use it as a calling card? Will you focus on a narrow segment and establish yourself as an unquestioned leader—like id Software for first-person shooters and Maxis for simulations—or will you develop an entire line of complementary sports games and distribute them on all major consoles?




Secrets of the Game Business
Secrets of the Game Business (Game Development Series)
ISBN: 1584502827
EAN: 2147483647
Year: 2005
Pages: 275

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