While a business rarely goes as defined in a business plan it's still a useful exercise to write one. It forces you to ask some fundamental questions to which the answers should be clear and concise. One such question I had to ask myself is, "what is the business?" Well, we make games. Simple enough, right? Not really. Apart from additional product details such as genre and platform, you'll find that you need to answer the question of what it means to make games from a business perspective. Your business is a legal entity with a purpose to make money. The managers have a fiduciary obligation to maximize profits, yet in a creatively driven business that's usually not the first thing on their minds. We want to make great games, games we're proud of and sure, games that sell well. Fortunately it just so happens this intersects perfectly with the primary mission of the company. We'll be proud if our game is great and great games generally sell well (provided they're positioned correctly in the marketplace, but that's the subject of another post). So if we focus on making a great game our fiduciary responsibilities should be met.
Focus. Al Ries wrote a great book on corporate focus and how the lack of it can be a killer (Focus: The Future of Your Company Depends on It). He gives numerous examples of successful and failed companies framing them in terms of focus. It's a compelling notion. So what does it mean for us as a small startup game company to focus? For starters it means picking our battles and not overreaching on our first product. The three most resource intensive aspects of game development are game design, art production, and technology development.
Game design may not sound like a large task, and certainly for some games it can be quite small, but late changes in design can have huge ramifications on art and tech and end up costing millions, missing your launch target, and/or even having your project canceled. The preproduction phase is critical for the game design to get nailed. I've got another post on deck that will cover some of my core philosophy for this period.
Art production for modern games is a huge cost simply due to the massive content requirements. For example, staffing a 30 person art team for 24 months will cost you nearly $9 million (using a 12k man-month). Ideally the art staff size for a project should ramp up and down fairly sharply over the project. You start with a core team, ramp up the production line quickly when you have your ducks in a row, and ramp down quickly back to the core team when the production phase completes. One of the most common problems seen in game development is ramping up the art team too early and ramping down too late (or not at all!). Outsourcing doesn't really change this. If your technical and design groundwork are not properly laid and the preproduction phase has not identified what it's really going to take to finish the game you're looking at a chaotic and inefficient production period. In other words, it's going to cost a lot more than it should.
Technology costs can grow beyond limit if you don't have the right people in place. One software development adage states that a new feature that takes 2 weeks for a skilled veteran programmer can take infinite time if put in the hands of the wrong programmer. This means they simply can not solve the problem no matter how much time you give them. Your game will either ship without the feature, or with the feature in an unpolished or possibly an unusable state, and will certainly cost way more than it should have. Creating a new engine from scratch is a huge risk for a small game company, no matter how great your programmers are. As neutrino pointed out in his first technology post, there are simply so many "fingers and toes" in the modern game engine that it requires a ton of resources to be competitive.
So how do we pick our battles and reduce the risk? By knowing what we are, and what we are not. Although we have brilliant engineers, we are not a technology company. Although we have fantastically talented artists, we are not an art production house. If licensing technology and outsourcing a large portion of the art production help us focus on actual game development then that is what we'll do. We will focus all of our energy and talent toward a single endeavor. We make games.