Business Idea

Start A Game Development Business

About

Starting a game development business requires a great deal of effort, dedication, and most importantly passion.

If you're interested in how to sell game development, or selling game development online, you can use this page as a guide for everything you'll need to know.

Want to learn more? You can check out our full guide on how to start a game development business ➜

Key stats

market size
$159B
starting costs
$17.2K
gross margin
40%
avg product price
$300000000
time to build
12 months
work from home?
Yes

About

Starting a game development business requires a great deal of effort, dedication, and most importantly passion.

If you're interested in how to sell game development, or selling game development online, you can use this page as a guide for everything you'll need to know.

Want to learn more? You can check out our full guide on how to start a game development business ➜

Key stats

market size
$159B
starting costs
$17.2K
gross margin
40%

 

avg product price
$300000000
time to build
12 months
work from home?
Yes

Startup Costs

Min Startup Costs Max Startup Costs
Office Space Expenses $750 $7,000
Employee & Freelancer Expenses $151 $352
Equipment & Supply Expenses $563 $5,200
Website Costs $303 $7,215
Business Formation Fees $600 $5,400
Software Expenses $162 $3,094
Advertising & Marketing Costs $0 $2,750
Other Expenses $0 $800
Total Startup Costs $2,529 $31,811

Successful Businesses

Business URL Rank
Overwolf overwolf.com #16,911
The Business Strategy Game bsg-online.com #65,349
Ais Technolabs aistechnolabs.com #107,355
HacknPlan hacknplan.com #115,344
Kansas State University ksu.edu #123,341
Appknock appknock.co #313,863
Zatun zatun.com #477,948
Game Connection game-connection.com #713,887
Zab Technologies zabtechnologies.net #887,888
Carina Softlabs Inc. carinasoftlabs.com #958,577
High 5 Games high5games.com #978,079

Pros & Cons

Pros Description
Flexibility You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own.
Rewarding work Starting a game development business can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about.
Scalable With businesses and processes changing daily, there will always be demand for new features, products and services for your business. Additionally, there are several different business models and pricing tiers you can implement that will allow you to reach all types of customers.
Meaningful business connections You never know who you will meet as a game development business. This could be the start of an incredible business opportunity!
High customer retention rates Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer.
Easy to encourage "impulse buy" In the game development business, you have a much higher chance of encouraging your customers to buy on impulse - you can easily alter the price, placement, packaging, and promotional value to influence the decision of your buyer.
Cons Description
Motivation of employees If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees.
Low margins The gross margins for your game development business are typically around 40%, which can make it more challenging to incur new expenses and maintain profitability.
High employee turnover In the game development business, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment.
Stressful work This line of work can be stressful for both you and your clients. This type of transaction is a significant financial decision for your client, so expectations are very high for you. Although this career path can be very rewarding, it also comes with its challenges and stressful moments.
High overhead expenses With starting a game development business, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below.
You may need to charge sales tax If you are selling your products in various states, you may be required to charge sales tax. Although this may not impact your financials specifically, it can be a headache to create a process and procedure for this. To learn more about sales tax, check out [this article](https://www.thebalancesmb.com/do-i-need-to-collect-sales-taxes-in-my-state-398913)

Marketing Ideas

  • 1

    Affiliate Program

    Affiliate marketing is a great way to bring in a new revenue stream, especially when you don't sell products or services.

    Simply put, an affiliate program is an agreement where a business pays another business or influencer ("the affiliate") a commission for sending traffic and/or sales their way.

    The affiliate typically gets a unique link where clicks and conversions can be tracked.

  • 2

    Direct Sales

    Direct sales strategy implies a direct contact between a seller and a consumer without the involvement of any third party. Direct selling is popular in sectors where sellers communicate with their clientele personally. The sales technique occurs at non-store locations which include at home, work, or online.

    For direct selling to succeed, hire a few (or many) salespeople to support the sales conversion process. It's critical that you assign them specific roles and responsibilities to nurture the client and provide excellent support.

  • 3

    Word of mouth

    Word of mouth is when a consumers reflects their interest in a company’s product or service in their daily dialogues.

    Therefore, word of mouth advertising is essentially a free advertising triggered by the customers experience.

    According to Nielsen, 92% of people trust recommendations from friends and family.

    Therefore, in today’s hyper-connected world, a single recommendation through a word of mouth can have a huge impact to your business.