I know this question so dumb … but I’m an indie developer in Asia.
Wages in Asia are growing markedly at about the same rate as those of Europe and America .
I’m wondering : how can a European and American company survive when the cost of selling games is unlikely to cover the salary loss?
This is quite risky if a product failure can kill a company. Big companies can bear the loss for get a Hit product in the future but … what about startups company ?
Good developers will choose work for big company instead of startup because will be too risky when the cost of living in European - American countries is too high and staff salaries are also too high.
You’re asking the wrong question because you’ve already made the assumption that “the cost of selling games is unlikely the cover the salary loss.” You should ask “Does the cost of selling games cover salary loss?” and “Why or why not?”
There will be many answers. Popularity of gameplay (defining market size), amount of bespoke content, marketing, sheer luck…the potential complexity of developing a game seems to eclipse most mediums.
“Good developers” won’t work for game companies because the pay is less than for regular development jobs.
…except they do, because there’s more to a career choice than just money and stability.
(opinion)
They survive by having realistic goals. Basically, a GTA game would mean GTA budget, and if you haven’t got it, then you don’t start a GTA scale project.
You do what every startup in history has ever done: you find some way to give prospective employees something that they consider worth their investment.
Just remember, an employee is not the person that takes on risk (unless they are compensated in some other way such as revenue share). That’s why they get paid by the hour. You, on the other hand, get somewhere between less than nothing and a whole lot of money.
This isn’t new, it’s the way things have always been in the startup world. Just because cheap labor is a bit less available doesn’t change the dynamics of the situation at all - in fact all the cheap labor could be gone tomorrow and well-built, well-managed game startups wouldn’t even notice. Because for them, the investment in good, reliable skill, and their trust in their own capability to succeed, makes it worth getting not-so-cheap labor from the start.
I believe in the idea that if someone is not capable of reliably breaking even in an industry, they are not ready to be there. Game development is not gambling in any way, shape or form. If you can’t make a small break-even game solo, hiring anybody is a waste of time and money. You can bootstrap your way from an endless runner clone up to an RPG made by a ten person studio, but if you believe that your games, on average, will lose money then you need to step down a few rungs and work your way up slowly.
A lot of game studios take on work for hire. It’s not their money at risk but they don’t get to build the game they want. That’s how they survive… Not glamorous but at least they live to fight another day.
Eventually with enough completed and well produced work for hire games a bigger publisher with a bigger license game may take notice. This is how startups get into development of titles like Call of Duty. They start building extra content and DLC and then progress up the development ranks for a publisher.
Another option is to convince venture capitalists to invest in you. They have a lot of cash and can often be a bit loose with it in my opinion. A good sales pitch and a bit of ambition can net you some large sums of money that will keep your business afloat until it can float itself.
Money is a tool and getting access to it is a challenge. But like any challenge there’s usually many different strategies to win success.
On the other hand. It’s good to hear us in the west won’t be undercut so easily in future! A lot of my friends have lost work this way. hopefully they’ll start to return.
Where you see risks that must be avoided we see rewards like being part of a company that is just getting started, being part of a team where everyone knows each other and every member can have an impact on the game, etc. Yes, there are risks associated with that, but money is not the only reward for a passionate game developer.
What if I told you that Unity Technologies has never once made more than they’ve spent? To quote the article below, “it has consistently lost money ever since it was first founded as Over the Edge Entertainment in 2004”.
The games industry makes billions plenty for the successful companies and many more. The trouble is that individual games companies and even more so individual game projects are super risky. You need to mitigate that risk as much as you can and have a fallback plan if it all goes south.
We are a small consultant company, we charge 200 USD an hour for our day job. We are 3 guys working full time so it generates alot of money to fall back on. Sadly it leaves very little time for our passion project.
No its corporate stuff, game dev consulting is much lower fees. We did try to get into Tobii (Eye tracking company) but they thought we were too expensive
The other dirty secret is that most indie game developers either aren’t really indie, or they aren’t really making money off games. There is often a big company footing the bill. Or there is a partner/parents/independent wealth paying the rent.
Here is a comment that I feel the best
There are only a few options that a startup can choose
Some people live by their parent company while others work from outsourcing to maintain human resources
In short, if developing products and then building from scratch, it will be very difficult to make profits
capital of 100,000 USD if human resource development for 5 person
salary per person 2000 USD / month
the company can only maintain 10 months ( not including rental costs and initial investment )
Trust me … 10 months will very hard to finished project and release the game
And after its release, it will definitely not collect enough 100,000 usd in the first year
Companies start because some people invest in them in exchange for a chance of profits later. That either means investors giving the money in exchange for ownership, the people working there doing it for cheap/free in exchange for ownership, or the government giving grants to help the economy in general.
That still happens in countries with “high” wages - see the entirety of western Europe - so obviously high wages does not prevent startups from happening.
I couldn’t disagree more with your posts. For starters, if the game doesn’t make $100,000 USD in the first year then to be blunt it was a failure. Understand that $100,000 USD is only 6,500 copies at $20 each with the typical 30% fee of most stores taken into account. If you can’t achieve that there were major problems somewhere with your process.
I’m currently contracted to a small studio that is developing a game for another studio with a shorter deadline than you just stated and in the first two months we’ve already made fantastic progress. If a company is struggling to release a game with a deadline of ten months they were simply aiming too high to begin with.
Said studio will be provided with way more than that over the lifetime of the project, and it’s a studio with no releases of its own. Yet it was able to find a publisher willing to take a chance and if for some reason they decide to stop part of the way through the project we’ve had interest from others too.
I can’t believe that anyone would expect 5 skilled people to work for 10 months on something that will ‘definitely not make $100,000’. Are you starting a charity or a business?
Also, rental costs? Why do you need to rent an office?
I think you have only looked at the very surface of the problem you are trying to tackle. You need to start asking a lot of deeper questions about how you can use the resources you have now to maximize access to more money and skill.
For example, what are the things you can spend 10k on right now that will net you 20k worth of either investment money or access to skill? If you made a prototype and validated it properly, would capable people still be wary of jumping on board with revenue share? Could you use it for a kickstarter? Could you take it to publishers or investors to secure more funds?
Here in Brisbane last year they were handing out 40k in grants to anyone who could show a good prototype and a solid plan (which seems to be quite rare in game dev). That’s just what I happened to hear about, I never researched the topic. There’s probably a lot more like it, and that’s the low-hanging fruit.
But to be perfectly honest, none of this will make the slightest difference as long as you believe that you are in the business of gambling people’s time and money. That’s a self-defeating perspective that will make all the people you need to be on board with you run for the hills.
I’m willing to bet there are fewer incentives from the government too. I haven’t looked too deeply into the business side of things but there are numerous incentives for small businesses in America including things like tax breaks and assistance for providing health care and retirement plans to your employees.
Are you a business owner or are you an employee?
Have you released any project on steam or not and can you share about how do you manage the resources ( Time - salary - expenses) and revenue of that project?
I don’t think working on a rental project for another studio and doing the project on your own will be the same !