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Sunday, January 29, 2023
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Column • How to not get obsessed with your indie game’s budget

Author: Andrei Podoprigora

It is not uncommon for indie teams to get obsessed with their game’s budget. I often see folks spending way too much time trying to shave off another 10% and thinking it is what will get their game picked up by a publisher or funded by a VC. It’s an understandable cognitive distortion if you’re struggling without cash, but here’s some good and bad news: no, the budget is, by far, not the most critical part of the publisher’s/VC’s decision-making process.

So what is then? It’s the marketability of your product. It’s the team’s composition and the founders’ experience & resolve. Finally, it’s the existing traction with the market. These things combined are usually responsible for 90% of the decision. The rest 10% falls to other stuff, such as the timeline, potential risks, technical details of implementation, platform fit, monetization strategy, competition, and, well, the budget. So when approaching potential partners, focus on these three and ensure they shine in your materials (gifs/trailers, pitch deck, how you deliver it, etc.).

Author of this article: Andrei Podoprigora, Venture Partner of The Games Fund • Check his LinkedIn and Website

Make it work

Now, you will only receive a “the budget is too big for us” response from a publisher/VC when you reach out to a partner who operates within a completely different range. For example, you’re trying to land $1.5M to finish a game, while the partner’s typical range is $200-500k. But even in those situations, the thinking will start from the marketability, team & traction standpoint. Then, in case they liked what they saw, they will see if something can be done to solve a budget question and make it happen.

I’ve seen a situation with the same numbers (1.5M need vs <500k typical check), where a publishing deal was made in the end by restructuring how the game was to be delivered to market. So, even when your budget is outside of the partner’s typical range, they will try to make it work if they like your game.

Check the list

So, what do you need to consider when creating your game’s budget? Here is my checklist:

  • Salaries must align with what’s typical and expected in your region. Good publishers and VCs know their geography and local costs. Remember that a good funding partner expects you to think about the game, rather than how to pay your bills. At the same time, they want you to be interested in profiting from the game’s success, not from its dev budget.
  • If you’re spinning up a legal entity after getting funded, remember that operating as a company comes at a cost: accounting, taxes, legal, office space and whatnot. They vary a lot from one country to another, so talk to someone who can help estimate these in your region.
  • Another essential thing is to ensure that you’ve accounted for taxes in your salaries. Remember that they might differ from your full-time employees to your freelancers & part-timers. That’s another part to consult about if you’re doing this for the first time.
  • Knowing your potential risks is part of every good pitch, so the budget should put an accurate number on that. For example, it might be your tech, the game’s balance requiring more time, an outsourcing cost rising, and many other things. It’s typical to have 10-20% allocated for such items, and your funding partner will recognize this as smart thinking on your part.
  • Under no circumstance should you try and cut corners with the software costs (e.g., let’s use only one engine license for a team of 15). None of the reputable publishers/VCs will consider this a good thing. So please sit down, calculate what you really need to operate a legit business, and put it into numbers.
  • Depending on your funding strategy (publisher vs. VC), you might or might not need to think of stuff like QA, Localisation, Porting, and Marketing costs. If working with a publisher, more often than not, it’s their costs. Working with a VC, it’s up to you to think of these and account for them.
  • When the game launches, even if it is an instant success, it will take a month or two until the money lands on your account, but you’ll have to support the game actively during this time. So ensure that you’ve accounted for that in your budget (a post-launch period). In cases with GaaS, your operating team may need to grow after the release date, and it’s okay too.

That’s it! After you’re done, your budget will tell your future partner how your product will be realistically delivered to market and supported—nothing more, nothing less.

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