Many passionate gamers want to have a career that’s closely related to their hobby, so they often ponder how to start a video game company. From a business perspective, this can be a great move. After all, the projections from Statista suggest the industry value will go above $575 billion by the end of 2026, and that the number of active participants will surpass 3 billion by 2030.
Now, the numbers alone can be extremely misleading. For starters, around one-fifth of this revenue comes from the US, and big corporations play a huge role. Anyone who thinks about how to start a game studio is technically figuring out what their indie studio is going to be about. This is extremely important given the fact that over 80% of indie studios fail to recoup their expenses after their first title is released. Luckily, there are multiple career options within this branch of entertainment, and not all of them are about making games.
Experience is the key when figuring out how to start your own video game company
People rarely start their business in just about any field. They usually work in other companies to gain necessary experience, start small, and scale up. Also, because it’s a costly venture, they might create a portion of the game and then move on to the Kickstarter campaign. This lets them see if there is an interest in this type of project, and they can gather funds from actual players rather than from corporate investors.
Additionally, creating complex games means managing bigger teams and more funds, and that is a completely separate skill set. That’s why many smaller companies stay in that stage for a longer time and continue to do well even as a small or mid-size gig.
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How to make a game company successful
Here’s the truth: the success or failure of your game doesn’t reflect your creativity, storytelling, or ability to innovate. Making a high-quality game is incredibly difficult and costly, and even if you do a great job, it doesn’t mean it will be a success. People need to know about it, talk about it, buy it, and play it. Unless you have a prominent publisher to help you out, there’s a good chance you won’t even get noticed, given that there are around 50 new games on Steam each day, which is around 1600 new releases per month. Now you don’t have to develop PC games, as there are other options for a company:
- Game journalism
- Affiliate marketers
- Streaming or video content guides
- Mobile app development (either games or apps that serve as help for other games)
- QA testing
- Casino games
It can also be useful to start with some of these adjacent businesses that collaborate with the studio before you learn how to start gaming company.
How much does it cost to start a gaming company
Unsurprisingly, this is a costly endeavor even if you are a small indie studio with a handful of people. Here is a rough breakdown of what you can expect:
| Team size | Cost range | Types of games you can make | Quality of product and release schedule |
| 1-3 people | $10K-$60K | 2D small games, like puzzles | You will have decent artwork, very simple mechanics, and release 1-2 games per month if they use similar code or mechanics |
| 3-6 | $20K-$100K | 2D platformers or narrative-driven visual novels | Better art, more complex mechanics, some storytelling, and you’ll have more animations and sound effects. Development can be between 6 monts or 2 years |
| 6-12 | $60K-$250K | 2D/3D RPG-style games | The games have more customizations, dialogue options, and more depth. You might have to outsource certain things depending on the scope of the game. It takes between 1-3 years or more for a single release |
| 10-30 | $150K-$500K | Action adventures, strategies, simulations, and/or other genres that support multiplayer features | These are more demanding projects, but they do get attention and praise. Success can change the trajectory of your company, allowing you to create more impressive. Development can be 5+ years |
| 30+ (Larger teams) | $500K – $1M+ | RPG 3D games/ Big online games | These are bigger projects, and some even rival current AAA accomplishments. It’s a long multi-stage production that takes 5+ years, and it’s hard to get an accurate estimate. Also, multiple teams or studios tend to be involved through outsourcing |
How to start a gaming business and scale it: Step by step
Let’s give a few concrete steps on how to make a game company:
- Pick a lane or decide on the platform and score (mobile, PC game, a small puzzle title, or a slightly more ambitious indie project)
- Publishing plan – do you plan to self-publish or partner up with a bigger company and split profits, or maybe try a crowdfunding campaign
- Create a minimum viable product (MVP) – this tells potential investors and players what the game is about and/or graphics (art style) they can expect
- Build on top of the MVP and test – once you start adding elements and features, you’ll get a better grasp on the expected development time
- Figure out the launch strategy – paid marketing, reaching out to streamers and content creators to build hype and exposure, showcase during a gaming event, etc.
Now it was stated at the start that the majority of smaller studios fail to recoup their costs after the first game. However, that doesn’t mean it’s the end of the road. Some persevere, and with the second release, they get more attention, and their first title gets even more exposure.
Additionally, if the game shows promise but doesn’t get the recognition it deserves, a smaller studio might be purchased by a bigger company. In fact, AAA companies do this all the time, and they can get tax cuts for doing so, meaning they are doing it to save money, not to spend it. Getting purchased can also help the company scale up, and you and your starting team might get some experience on how to do things if you need to start over. But, broad strokes, this is how you would scale your company:
- Hiring additional devs and artists to increase the output of content or speed up development
- Alternatively, you can outsource certain elements if it makes more sense; it really depends on what type of game you are making
- When you have enough experience, you can also figure out how your production pipeline or release schedule should look for upcoming titles
- The goal is to create a more structured workflow and prevent delays
- Instead of waiting for the finished product, you use the presence you’ve built with the initial release to work on early user acquisition (again, Kickstarter, pre-purchases, selling early alpha access, etc.)
- Cutting costs is another important step. If there isn’t enough early hype or the project is too ambitious, salvage what you can, redistribute resources, and try to leverage those salvaged assets in another project to make it better.
Once you become more profitable and adjust, the future projects become far less stressful.
This content is provided for informational purposes only and is not a substitute for professional advice. AFP editorial staff were not involved in the creation of this content.
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