This article will first discuss the motivations and advantages of having a business plan. If you’re launching your first game, then a business plan might not be necessary now. Then, the main sections of a business plan will be detailed and examples of a fictitious studio will be given (in green).
Throughout this guide we cite a fictional video game studio for ease of reading, but all of the entrepreneurial and management mechanics explained are just as relevant and useful for a self-employed person, for an informal group of devs or for any industry organization that does not necessarily see itself as a studio yet. Each plan business is different. This guide is an example of a structure and should be modified based on the reality of your studio and projects.
Table of Contents
You might not need a business plan now
Before starting, I must warn you. A well-crafted business plan can be a valuable tool for your video game studio as you navigate the growth of your business, but it is not always essential, especially for indie game developers launching their first game. Most of the time, I recommend to start building a pitch instead of full-fledged business plan. This article will help you to do so: Mastering the Art of a Successful Video Game Pitch: A Guide for Indie Game Developers.
(If you are still not sure, my contact info are at the very bottom of this page.)
What is a Business Plan in a Video Game Studio Context
A business plan is an essential tool for setting goals and outlining a clear path to achieve them in the context of your video game studio. As the owner or founder of a video game studio that has already launched a first video game, I understand that you are looking for advice on how to create a comprehensive and compelling business plan. The plan not only showcases your game(s) but provides a comprehensive overview of your company, team, resources, finances, marketing strategies, player community, operations, and development processes.
The purpose of a business plan is to present a clear and concise picture of your studio, from its past and current operations to its future plans. It’s an opportunity for you to showcase your vision and drive to potential investors, partners, and stakeholders, demonstrating that you have a solid understanding of your industry and market, as well as the skills and resources necessary to achieve your goals.
Why and When a Video Game Business Plan
As the owner/founder of a video game studio, you may find yourself considering the creation of a business plan at various stages of your business journey. Whether you’re just starting out or have already launched your first game, a well-crafted business plan can help bring clarity and focus to your future plans and projects. Here are some benefits you can expect to gain by creating a business plan:
- Ensure a strong start for your business
- Clearly define your short, medium, and long-term goals
- Attract investors or launch a successful crowdfunding campaign
- Build credibility with partners and employees
- Streamline your development process and manage operations efficiently
- Secure publishing partnerships
- Hire top talent, like an executive director or key employees
- Explore opportunities for acquiring or merging with other businesses
Executive Summary
The executive summary is an important section of your business plan. It provides a condensed overview of the entire plan, including the financial appendices, in a one-page format. This section is usually written last, after all other sections are complete.
For your convenience, I have included examples in this guide that use a fictional video game studio (Emperor’s Studio) and its first game (Empy). You will find these examples written in this color. If you want the .docx template, simply use the contact form at the bottom of this page to request it from me.
Business Overview
In this section, we give an overview of the current business and its past.
Introduction
Start with an introduction paragraph and explain how the studio was founded (if applicable). Describe your tasks, those of your partners and employees if you have any.
Emperor’s Studio is currently managed by two people. Founder 1 & Founder 2 are longtime partners in the game development industry who strive to keep the gameplay, fun and quality at the highest level in their games. The business is a small indie game studio based in [a city]. Founder 2 is the main programmer, developer, and designer while Founder 1 is the concept and pixel artist, scenario writer and community manager.
The company focuses on combining video games, comics with the interactivity and interconnectivity of an ever-expanding multimedia universe called the Empy’s World. The studio released its own previous game on Steam and have collaborated with many [other businesses and influencers] on projects such as [project’s names].
Management team / Our team
Take care to present your team from its best angle. Describe the professional experience of each member and the detailed responsibilities within the studio
Be consistent with the CV of each member and his Linkedin, because these are details that could be verified later by future investors or partners.
A photo of you, your group and your colleagues will make the document warmer. After all… other humans will read you!
A Word From Us
When possible, we suggest that entrepreneurs write a personal message (maximum 100 words) to further personalize the business plan. This is the kind of inspirational and public message that could be found in the “About us” section of your website.
Business Ownership & Structure
Specify whether it is an incorporation, a general partnership, a single self-employed worker, etc.
If applicable, what is the structure of the company’s shares? If you anticipate that the latter will be subject to change in the near future, you can indicate it.
If you don’t know yet, a good start to understand the best structure could start by reading the Wikipedia List of legal entity types by country or to do a quick Search on Google with “Business Structure + [your country]”. Most country have an article about this subject on their website (look for .gov website).
Emperor’s Studio is registered as a limited liability company (LLC) and is 50% owned by Founder 1 and 50% by Founder 2.
Collaborations / partnerships
Have you collaborated with other companies, studios or artists? Whether it is a contract that you have awarded to others or work for which you have been commissioned, in both cases, it is relevant to explain it.
Collaborator 1 is a veteran book cover and sequential artist who has been working with us since 20xx on Project 1 to help develop our artistic vision. Collaborator 2 and 3 are experienced pixel artists that we have worked with on since 20yy. Collaborator 4 is a skilled and versatile musician that has been able to adapt and implement the audio vision that we wish to execute within our games.
Key planned hires
Explain the type of employee you will need to hire in the near future. Detail each profile sought.
Previous games and collaborations
Showcase your already launched games. If you have collaborated on the development and release of a game, it is relevant to present it as well, without forgetting to explain how your studio was involved in it.
Current Development : Empy
(Empy is the name of the fictional game)
Talk about the current development. If it is not started but you have plans or an idea of the main aspects that will make it up, demonstrate them.
Some aspects that could be mentioned:
- Game mechanics
- Visual
- Gameplay
- Progression
- Story
- Preview Video (trailer)
- Player Experience
- Your future gaming community, but rather briefly, as this section will be scrutinized in much more detail in the sections that follow.
- A website for this game
Other merchandise
If you are going to create and sell promotional merchandise, it would be a good idea to indicate so. For example:
- Figurine
- T-Shirts
- Mugs
- Comics
- …
If you have a visual elements, it’s perfect to show them.
Market Analysis
This section presents and analyzes the market. It is very useful if you plan to present it to potential investors or partners who are not in the same industry as us. It allows you to define trends that are specific to your game / studio, for example, a specific game category such as Survival RPGs.
Global Video Game Market
The global video game market value was estimated at xxx USD for the year yyyy. It is also estimated that the market will reach zzz gamers in yyyy and a market value of xxx USD.
Industry Trends
As the owner/founder of a video game studio, it’s important to keep a pulse on the industry trends that may impact your business. In the “Industry Trends” section of your business plan, you should aim to provide a comprehensive overview of the current state of the video game industry, including market size, key players, and any significant trends or shifts that are likely to affect your game(s) and target customers.
Make sure to provide data and research to support your claims, such as industry reports or data from trusted sources. This will demonstrate to potential investors and stakeholders that you have a deep understanding of the industry and that you have taken the time to thoughtfully consider the competitive landscape.
I recommend reading this article I wrote about tools that can help searching video game market data for market size and trends.
RPG & Survival RPG
Survival games encourage the exploration of an open world and keep the survival parts of these games a central aspect of the player’s experience, while in RPG, the player controls the actions of a character immersed in some well-defined world .
Based on market research made from X games available on Steam, Y are tagged both as a RPG and a survival game.
(Include all your sources)
Competition analysis
It’s important to understand the market environment you’ll be operating in, which includes not only supply and demand but also the competition. That’s why in your business plan, it’s crucial to analyze your direct competitors – studios that have already released or are planning to release a game similar to yours. This will give you a better understanding of the products and development studios in your market.
RPG + Survival Games
Among the best rated games having both RPG and Survival tags, we can find:
- Yuppie Psycho
- Darkwood
- Don’t Starve
- World of Horror
- Terraria
- FTL: Faster Than Light
- Starbound
- The Riftbreaker: Prologue
- Risk of Rain
- The Binding of Isaac
- Fallout Series
- Kenshi
- STALKER: Call of Pripyat
- Dig or Die
- Foraging
- Craft In Abyss
Development Studios
The company anticipates moderate competition from development studios of all sizes specializing in Survival RPG game development.
The table below present notable studios that have released at least one game of this genre.
| Developer | Location | Website | Number of games | Twitch Followers | Steam Follower | Facebook Likes | Youtube Followers | Hit | Copy Sold |
|---|---|---|---|---|---|---|---|---|---|
| Baroque Decay | Worldwide | https://baroquedecay.com/ | 2 | 0 | 2,100 | 0 | 2,200 | Yuppie Psycho | 100-200K |
| Klei | Vancouver, Canada | https://www.klei.com/ | 10 | 21,150 | 161,102 | 56,500 | 98,600 | Don’t Starve | 5-10M |
| Acid Wizard Studio | Poland | acidwizardstudio.com | 1 | 4,700 | 2,300 | 4,400 | 3,700 | Darkwood | 500-1000K |
| Panstasz | Poland | https://panstasz.itch.io/ | 1 | 0 | 0 | 0 | 0 | World of Horror | 100-200K |
| Re-Logic | Indiana, USA | re-logic.com | 3 | 5,000 | 31,000 | 17,000 | 147,000 | Terraria | 10-20M |
| Subset Games | Shanghai, China | subsetgames.com/ | 2 | 0 | 11,000 | 0 | 700 | FTL: Faster Than Light | 2-5M |
| Chucklefish | London, England | chucklefish.org/ | 11 | 10,000 | 91,000 | 16,000 | 52,000 | Starbound | 2-5M |
| Exor Studios | Poland | exorstudios.com/ | 3 | 800 | 2,600 | 4,200 | 900 | The Riftbreaker: Prologue | 100-200K |
| Hopoo Games | Washington, USA | hopoogames.com/ | 3 | 0 | N/A | 19 | 0 | Risk of Rain | 500-1000K |
| Edmund McMillen | California, US | N/A | 7 | 0 | 34,100 | 0 | 0 | The Binding of Isaac | 2-5M |
| Obsidian | California, US | Obsidian.net | 15 | 14,000 | 29,000 | 77,000 | 104,000 | Fallout Serie | 10-20M |
| Lo-Fi Games | Bristol, UK | ofigames.com/ | 2 | 0 | 8,700 | 10,500 | 0 | Kenshi | 1-2M |
| GSC Game World | Kyiv, Ukraine | gsc-game.com | 12 | 131 | 12,000 | 11,000 | 75,000 | S.T.A.L.K.E.R.: Call of Pripyat | 1-2M |
| Gaddy Games | Paris, France | gaddygames.com | 1 | 0 | 267 | 400 | 300 | Dig or Die | 100-200K |
| HopFrog | N/A | hopfrogsa.net/ | 1 | 0 | 0 | 0 | 0 | Forager | 500-1000K |
| Firepillar2 | Hong Kong | firepillar2.com/ | 2 | 0 | 36 | 0 | 0 | Craft In Abyss | 1-20K |
Execution
This is where we get into the nitty-gritty details of your plan. I believe that all of the following sections are critical to your success, as they will outline exactly how you plan to achieve your goals. These sections will likely be the focus of discussions and questions with your readers.
Development Schedule and Budget
In this section, you will want to detail the projects you are currently working on or plan to work on soon. Start with a high-level overview and then break down each project into smaller, more manageable parts, providing time estimates for each step.
Milestones (Tied to the Development Schedule)
This section is similar to the previous one, but focuses on milestones that are not directly related to the development process.
- Create a detailed plan for communication, presence and visibility on the company’s social networks, but also through influencers.
- Create a detailed budget explaining the allocation of funds for each of the projects and subprojects required for the development of the game.
- Setup accounting ledgers
- Plan the necessary hiring and projects (if required)
- Create a detailed budget
- Month 1: Start of development
- Game Development / Project / Hiring Milestones
- Half of year 2: game launch
- Net sales of 270K$ during year 2
- First 1,000 positive reviews during year 3
- Net sales of $ 2.6M$ during year 3
Technology, Software and Tools
This part allows you to list the software, technologies and tools that you use.
Location & Facilities
Indicate your offices and premises if applicable and if you think this would be relevant for the reader. For example, to explain a future business expansion, you can indicate the number of square feet as well as the price of the rent.
We plan to move into a room of approximately xxx square meters very soon, which will cost YYY $ per month. This new space will allow us to carry out the expansion we desire, to hire staff and for everyone to work and meet physically.
Distribution and Sales Plan
As the owner of a video game studio, it’s crucial to have a clear plan for distributing and selling your games. Whether you choose to sell your games exclusively through online distribution platforms like Steam or through physical merchandise, it’s important to outline the details in this section.
If your sales model is entirely digital, simply state that fact in this section. But if you also plan to sell physical products, such as collectibles, you can use this section to explain your approach.
Regardless of your distribution and sales channels, be sure to include the selling price of your game and any other products you offer in this section of your business plan.
Empy will be on sale exclusively through the Steam platform at a price of 19.99 US.
Marketing Plan
marketing plan is a pillar for the success of your business, and in some cases, it may be wise to start with this section before moving on to the rest of your business plan.
The marketing plan section should answer the question, “How do I market my game?” by covering traditional marketing tactics and personalizing them to the video game industry. This section will summarize your marketing objectives, which will be detailed further below.
It’s worth noting that marketing is often the reason why many game developers fail to reach their goals. To ensure that your marketing plan is as comprehensive as possible, you may consider reading our guide “Indie Video Game Marketing Plan: Stand Out in a Crowded Marketplace” in parallel with working on this section of your business plan.
Marketing Objectives
We summarize here the objectives of the marketing plan which will be detailed below.
Emperor’s Studio ‘marketing objectives are to:
- Solidify brand identity as a notable studio in the specific genre of Survival-RPG
- Secure sales of the games and products
- Highlight the company’s commitment to continuous product improvements that meet the specific needs of its community and customers
- Increase and maintain the number of players within the community of Emperor’s Studio
- Start and increase the fan email list
Video Game Marketing Campaign Strategy
To effectively reach as many players as possible and achieve a successful return on investment, your marketing strategy should take into account multiple aspects.
A strong website will showcase your latest news, provide text content and articles that help you stand out in search engines for your games and products, and serve as a hub for press releases. By doing so, bloggers, journalists, and media outlets will have access to all the information they need to spread the word about your games.
To break down your marketing strategy into manageable parts, consider dividing it into three categories: pre-launch, launch day, and post-launch.
Pre-release marketing tactics
Explain the marketing efforts you plan to make before the game launches. Ideas include:
- Steam store page, tags and notification.
- Developer announcements.
- Steam Store Widget.
- Localization (Languages and translation).
- ‘Coming soon’ Steam Page.
- Connect with Steam Curators
Steam store page, tags and notification.
Valve published a 30 minute video about Building Your Store Page and Publishing Your Application.
This explain how to setup your store and game pages. Their graphical assets template can be found here.
For each studio’s game that will be released on Steam, including Empy, a page for the game will be created before the game is released. It will contain all the information that identifies the game, three screenshots and its characteristics so that it can be discovered by the gaming community, including thematic, gameplay, art style, and sub-genres. The potential customers can add it to their Wishlist and steam will notify them when it will be released and available to purchase. The potential customer will also be notified if the game is discounted and she / he has not purchased it yet at that moment.
Developer announcements
Announcements will be made from the website, but also through the Steam system, to share the progress that is gradually leading to the big day of the launch. It’s a way to create and maintain the “hype” before its release, and to be able to interact with the community that is interested in it.
Steam Store Widget
Steam provides a way for developers to integrate a widget into their website that displays a short description of the game and links to the Steam purchase page. When the latter has not yet been released, we can then see the “Add to Wishlist” options and this becomes a way of quickly creating a link when a potential player goes to the website with her / his Steam Wishlist, thus strengthening his commitment to the purchase.
Language and translation (localization)
All dialogues will be in json for easy translation. Thus, the game benefits from increased visibility towards players speaking one of the languages into which the game will be translated. Thus, by considering all non-English speaking players who represent 58% of Steam users, Emperor’s Studio is strengthening its place in the market and securing market share that is impossible otherwise.
‘Coming soon’ Steam Page
A “Coming Soon” page will be created so that the game can appear in the steam search and that players can add the product to their Wishlist. Then they will be notified on the launch day.
Connect with Steam Curators
Emperor’s Studio will contact Steam curators from the platform’s already integrated tools that allow 100 curators to be offered keys for their members to review the game. Therefore, the company will carefully choose the best 100 curators who have the best profile and audience aligned with Empy.
Release Day Marketing
Explain the marketing efforts you plan to deploy the day the game’s launch.
Streaming
When the studio will launch its games, the official Emperor’s Studio Twitch channel will be live and broadcast a playthrough. In order to accentuate this hype, the company will sponsor influencers to play live on their own Twitch channel as well.
After Launch Marketing
Explain the marketing efforts you plan to deploy after launching the game. Here are some ideas:
- Steam Organic Visibility
- Influencers campaigns (read our Ultimate Indie Game Guide to Influencers)
- Social media & Advertising
- Game festivals (PAX)
Emperor’s Studio is aware that the launch of the game is not the finish line, but rather the start line. All the work and planning done previously will allow better visibility and launch of the game and will also facilitate the progress of the next marketing efforts below.
Steam Organic Visibility
Steam wrote in its developer documentation that when a game is successful, it could be shared on the platform’s main page. We therefore speak of the principle of “organic visibility”. Concretely, the sections on Steam are as follows:
- News and trends
- Top Sellers
- Promotions (when activated)
- Friends news feeds when the purchase of the game is made, screenshots are shared and achievements earned
- The discovery queue
In addition, for each major update, if there is any, the studio will create and share its patch note with the Steam community in order to benefit from increased visibility of the platform, which Steam sometimes calls “Update Visibility Rounds”.
Beyond all this, a “standard” visibility is offered through the Steam catalog based on the tags and style of each studio game.
Connect with Indie Games Influencers (on Youtube, Twitch, Facebook Gaming…)
The number of unique channels streaming on Twitch reached 10.6 million in 2020 (Q3) while 913,000 unique channels streamed to YouTube Gaming the same year [1], reaching 100 billion hours of video game content watched on the platform. [2] Therefore, among the highest marketing priorities of the studio are the promotional campaigns that will be carried out by some of these influencers for the studio, in the form of contracts and sponsorships. Emperor’s Studio will carefully select the channels that are most likely to contain an audience interested in the company’s games in order to obtain the best return on investment.
A comprehensive tactical plan could be developed to effectively execute this marketing aspect. This will include among other things the communication strategy with influencers (what will be presented and “how”), an exhaustive list of interesting influencers with information on their channel (to get in touch in a personalized way) and the follow-up method.
Social Media & Advertising
Social networks such as Facebook, Twitter, Twitch, Youtube and Discord, although they all have a slightly different function, are also a pillar of the marketing strategy at Emperor’s Studio. These social networks will serve to inform fans, interact with them through various means, promote products’ launch and consistently show presence to them over a long period of time, unlike live streaming with influencers whose goal will not be to give a long-term and multifaceted experience around the studio’s universe. Some social networks like Twitter, but also Facebook, can be used to communicate relevant information for the press and journalists in order to receive press coverage.
Again, a comprehensive tactical plan could be developed to effectively execute this particular marketing aspect. Marketing managers at Emperor’s Studio will use it to understand communication strategy, quantify objectives, perform analysis and control of various KPIs, and plan the release schedule.
Game Industry Events
Participating in industry events such as GDC, PAX and MomoCon Convention and many other is part of Emperor’s Studio ‘marketing strategy. This investment should help acquiring contacts, enhancing the brand reputation and increasing awareness among our audience (the gaming community).
Email list
A mailing list is one of the most intimate and solid ways to connect with fans in a studio. It also helps to get to know them better. With a good communication strategy in place, the studio will be able to use this powerful marketing tool in the long term. If you choose to adopt this strategy, indicate and explain it.
Intellectual Property
This section is often overlooked by business plan writers, but is sought after by readers, especially in a software development context. Future partners or investors want to know if you own the IP, and if so, what does it include in more detail.
Emperor’s Studio’s games are designed to ensure the protection of its revenue-generation potential and long-term sustainability of the business. The Company has developed an IP committee mandated to establish policy and guidelines surrounding IP application and access to confidential information. The IP strategy surrounds the software algorithm, networking and database design, game play and game design elements. Therefore, the storyline, characters, arts, music, and packaging design are copyrighted.
Key metrics (KPI)
In summary, Key Performance Indicators (KPI) are indicators that allow you to compare your studio’s results against set objectives or industry standards. KPIs can be marketing or operational in nature in order to measure performance, but they can also be associated with company finances.
Each KPI can be further developed in the plans concerning them and by the person responsible according to the strategies and objectives evolving over time, but while keeping a modest number of KPIs so that they remain effective, meaningful and SMART (Specific, Measurable, Attainable, Relevant, and Time-bound).
In the case of Emperor’s Studio and its icming launch, the following KPIs would be the most important:
- Sales
- Steam Review score and number
- Steam community and player engagement
- Steam Wishlist, paid download
- Influencers reviews and views
- Google Analytic (website and Alexa)
- Facebook likes, impressions and engagement
- YouTube views, engagement and subscription
- Backlinks from press coverage
Partnership with a publisher
Explain the business relationship you have with your publisher. If you don’t have one and / or are currently looking for one, it’s a good idea to indicate it here. The article Publishing Deal for Indie Video Game: how to research, find, negotiate and secure your partnership with a publisher could be useful.
Emperor’s Studio is currently working to identify video game publishers having a “fit” with the studio, its culture and its vision in order to pitch its future development projects and gather and analyze the best offers.
The company also considers the possibility of doing business with independent indie financing funds (sometimes called “syndicate”) for the advantages that this could provide in the longer term.
Financial Plan
Key Assumptions
The key assumptions summarize what must happen in order for the business plan to be carried out correctly. They can be taken from historical company data, industry benchmarks or smart guessing. These assumptions can be revised and evolve over time, just like the financial plan.
The following assumptions were made in order to build the financial planning:
- An amount of 250,000 $ will be raised from a publisher or investors to develop and market Empy.
- The number of copies sold by the end of Year 3 will be 73,940.
- The sales distribution of these 73,940 sales has been based on the Product Life Cycle theory.
- The sale price will be $ 20 US.
- A Steam Commission of 30% of the sales is planned for each sale.
- The proportion of games sold at a discount compared to the total number of copies sold is planned at 25%.
- The average discount of the sale is forecasted at 30%
- The portion of the revenue going to publisher is estimated at the full amount of the loan plus 25% of the sales during years 2 and 3.
- The debt owed to the publisher will be totally cleared at the end of year 3. The total amount is planned at 250,000 $ (initial amount) plus 25% of the sales during year 2 and 3, for a total of 469,187 $
- Once the game launched, an additional amount of 50,000 $ will be spend on marketing, 50% during the first 6 months and 50% for the following 12 months, mainly funded from the net profit of the sales.
- At year 3, the amount of cash, before the corporate taxes and dividends, and after having paid the publisher loan, should be of $ 187,723.
Use of Funds
Explain how the funds will be used and the resulting financial plans. May be accompanied by financial models, data and tables.
As indicated in the financial forecasts below, 100% of the amount will be allocated to the development of the game Empy and its marketing. The studio will raise $ 250,000 US.
Sources of Funds
Explain where the funds come from if they have already been raised.
Currently, Emperor’s Studio is actively seeking the best editor or investor for its project.
Financial Forecasts
Financial forecasts provide an understanding of how a company’s finances will take shape in the future. It is important to remain realistic and consistent in order to be convincing with seasoned investors.
Financial forecasts are divided into three broad categories:
- Income Statement: shows income versus expenses for a given period of time (usually 12 months).
- Cash Flow Projection: It will show how the money will be used and prove that a positive cashflow will be generated in order to be able to repay debts.
- Balance Sheet: This section is often compared to a “snapshot” of the business at a future date showing the net worth of the business with assets, liabilities and equity.
If you need a template, simply use the contact form above to request one from me.
Appendix
The appendix consists of attaching any document that could be useful and complement the business plan. Sometimes it can be a pitch deck to present the game that is coming soon in a much more visual way.
The details of the financial plan are shared as an appendix in Excel format.
Additional Resources
- Send me a message (below) so we can discuss your business plan, publisher research or any other project!
- My lengthy guide on (Indie) Game Marketing Plan – Stand Out in a Crowded Marketplace should help you understand, elaborate and write your marketing plan in much more details
- The Ultimate Indie Game Guide to Influencers could be helpful if you plan to launch an influencer campaign for your game
- If you think a crowfunding would be the right way to fund your development, I covered the topic in our Kickstarter for Indie Games: A Comprehensive How-to Guide with Examples, Tips and Templates
- Liveplan: a platform that streamlines the drafting process of writing a business plan and automates many steps in the creation of financial forecasts.
- Valve’s article about Steam’s Features And Tools, Marketing
If you have any questions or comments about this article, feel free to let me know in the form below.
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