Building a game studio

Building a company is something I've known I was going to do since I was 15. I remember going through a "career advice" session at school, where we laid out a simple plan: go to a computer science school, then do a one-year degree in commerce, then build a company to do computer software things. I took some detours on that road, but I'm glad I'm finally there!

The plan, of course, evolved a lot over the years. From reading about the workers-owned company model of Motion Twin to my frustration about hierarchy at Mozilla [fr], my vision of an ideal company got more refined. When I finally got started on this adventure back in December 2020 [fr], here are the few things that I knew I wanted for my company:

1. It has to be organized in a horizontal way: no bosses, no power abuses, no unjustified hierarchy.
2. It produces video games for a living, potentially other forms of cultural products later on. I have a say on what it produces and how it is made.
3. I do not want to be the only employee of that company, I want to work with others.

As it turns out, building a company with those expectations is not so simple. I had to go through a bunch of steps. Here's what I did:

1. Find partners to create the company with.
2. Define the core values of our company.
3. Establish a mid-term strategy for our company.
4. Create a business plan for our next game.
5. Get help and support building the company up.

I'm going to go into details for each of these steps, but first, let me share some resources that I found incredibly helpful in getting my head around this whole "creating a game studio" deal:

• [article] 8 Questions to Ask Yourself When Starting a Games Studio — Tanya X. Short founded Kitfox Games, and here she shares 8 things that are super important to ensure your game studio survives. This is a must-read if you're creating a studio.
• [video] Intensely Practical Tips for Growing an Indie Studio — A GDC talk by Alexis Kennedy about his experience creating and growing several game studios. There is a lot of great advices in here.
• [video] Studio Design: Building a Foundation for Success and Avoiding Business Disaster — Another GDC talk, this time by Jason Della Rocca, that talks explicitly and exclusively about creating a studio in order to make it financially successful.

Step 1 - Finding partners

This step was, by a wide margin, the hardest one for me so far. After I left Mozilla in April 2019, I happily worked on my card game [fr] for about 7 months. But at some point I realized that I would not be able to tackle such a big project by myself. That's also when I remembered that I had a goal of creating a workers-owned games studio. I had to find other people to join me on this journey.

My main problem was that I had no-one in my close circles willing to do it with me. The few people I wanted to work with sadly had other (great) plans, and thus I was alone. So I figured I would use the magic of the Internet to find like-minded folks. I posted a few articles on this blog to explain what I wanted to do, shared them on social media, and soon enough I had about twenty people wanting to talk to me about that project. That was scary.

Over a few weeks, I interviewed all of these fine people. I turned down only one of them, because I thought they were making a mistake — they wanted to drop out of school to join me. And then I ended up with a very different problem: I had too many people to work with! But there was also a big contradiction in my head. Something just didn't feel right in the way I was doing this. Let me explain.

I launched this process wanting to build this company in a cooperative way. I didn't want to be the leader or the boss, I wanted us to be a group that would cooperatively create a game studio. But at the same time, I had a much higher investment in this project than everyone else. I had been working on it for a while, had started it, had recruited everyone involved at that stage, and I had a vision for what it would be. I also intended to invest a lot of my personal money into it.

I was torn! I wanted to create the studio in an idealistic way: everyone is welcome, everyone is equal, everyone is involved in every decision from the start. But that required letting go of my control over this project. That required risking that my vision would not be followed.

I had a fundamental problem of trust. I did not know those 20 people. I had never worked with them. I was not able to trust them with my vision, my energy or my money. During some of my conversations, we said that associating ourselves was like getting married, but stronger. I clearly did not know any of them enough to get married with them. It took me a while to understand this, but when I did, it unlocked a lot of things for me.

One very important thing that happened to me, psychologically, was to accept that even though I wanted to create a very horizontal structure, the people involved were not and could not be equal. My involvement in this project is fundamentally higher, simply because it is my childhood dream, because I've been working on it for a long time, etc. It doesn't mean I can't create a company that works horizontally. It just means that, even in a structure that wants to be horizontal, there are inequalities, and that it is not a bad thing. We just need to identify them, acknowledge them, and make sure that everyone involved accepts them.

What did I do then? I got focused on a smaller task. Out of the 20 people that I talked to, there were 2 that I knew previously — one ex-colleague, one from a local association. We decided to start again with just the 3 of us, to slowly build that trust, and while we were at it, to build our first commercial game. That's how Phytomancer was born: we wanted to make a game in 3 months, from start to finish, put it up for sale, and verify that we could trust each others to create a company together. Very quickly in the process we agreed that we would need to get other folks on board: we only had the programming and game design skills among us. So I published a new post on my blog, but this time looking for specific skills and with a much more defined scope.

I won't go into details about how the Phytomancer project went, for I have done it already. If you're interested, please read Four Months of Horizontal Game Production. What matters for today's story is this: I was able to find someone that I could work with and that I was willing to associate with. Yes, only one person — out of the 7 folks I started the project with. It turns out finding someone to get married with is not easy. :-) That person is Alexis, who graduated in arts and game design, who can do pretty much everything graphics-related and even knows a bit of programming. Not only does he have a complementary skillset to mine, we also happen to very much agree on our visions of the company.

This first step, finding partners I could trust, took about 10 months. I envy all those entrepreneurs that just happen to know the right people when they start. But at the same time, I think there is real value in the process I had to go through. Alexis and I have already worked together on a real game, we have built a real trust that makes us confident, and that will take us far. We've had time to create a working relationship, to identify how we react and behave, and we know how to resolve our conflicts. That, I believe, is extremely valuable for the future of our company.

Recommendations on this topic

• [article] Start with Who — Heard about Simon Sinek's "Start with Why"? Here's a case for starting with "Who" instead, especially when creating a community. I believe that applies strongly to starting a company.
• [video] Game Studio Leadership: You Can Do It — A GDC talk by Jesse Schell, about running a game studio. Here I'm referring specifically to the part that starts at about 12:05, where he talks about finding people to start a company. That part's been really helpful to me.

Step 2 - Defining our values

The hard part being done, it was time to actually start working on our studio. I've never created a company before, so I did a lot of reading and watching and listening to folks sharing their experience. That's why I'm putting all those recommendations at the end of each section: they are great resources that helped me understand how it was done.

One of the most important things to do when creating a company is to understand why you're doing it. Why not just go work for an existing studio? Why specifically a game studio? Why a cooperative? These are questions that I found difficult to answer. I knew I wanted those things, but it was hard to explain exactly why. But this is crucial, especially when you're building it with other people. You have to agree on a certain set of fundamentals for your company. Those are called the "pillars", and we split them into 3 parts: our raison d'être (why we exist), our vision and our values.

Raison d'être

The raison d'être is literally our reason for being. It answers the question "why does our company exist". This is turned to the past, and serves to explain why we decided to create yet another company instead of joining an existing one. It also explains some of the major decisions in the next pillars. For example, here is the "raison d'être" we settled on:

We want to create a cooperative organization where we will have full creative control over our cultural productions.

We oppose authority that is not consented by those on which it is exerted. We believe that a cooperative organization is the optimal way to work together.

These are the intrinsic reasons why Alexis and I want to create a new company, and why we want to create it the way we do.

Vision

Next up is the vision. This one is turned towards the future: what ideal do we want to reach? This one matters because it gives us a shared sense of where we're headed. We have a clear direction, and that helps us making decisions. In our case, here's what we wrote:

• We work in an organization whose main activity is creating and selling cultural artworks.
• This organization works in a cooperative way, without non-consented authority, and combines efficient production with well-being in the work space.
• We offer our audience artworks that make them think, learn and grow.
• We dedicate a portion of our resources towards stabilizing and growing a network of cooperative companies that share our values.

This is the future we dream about. It's what we've set out to reach. Some of those things will be harder to do than others, and we might not be able to do them before a long time, but that's fine. What matters is that we've written it down, we agree on it, and we can reference it when the time comes to make tough decisions about our company.

Values

Finally, values are anchored in the present. They answer the question: "what are our fundamental beliefs?" These are the things that are the most important to us, today. They help define what we do and what we do not do. You could say that they are our "grand ideals", that absolutely have to be understood and shared by everyone in the company. Here are ours as of writing:

• We maintain a work space that prioritizes the well-being of all members of our organization. That work space must be caring, inclusive, tolerant and encouraging diversity.
• We ensure that all members of the organization understand the reasons behind our decisions and processes.
• Any form of authority in the organization derives from the attribution of a role to a person. That authority is clearly defined and voidable.
• We refuse to exploit cognitive biases in order to encourage our public to pay more money than they intended to spend.

These are the things we do from day one. We do not compromise on them. If we do something that doesn't fit our values, we have a big problem and we need to solve it as soon as possible.

Why should we do this work?

We defined our pillars for 3 main reasons. The first one is because it is very, very easy to assume that others think the same way you do. We human beings do that all the time. But in our case, a small assumption might later on cause a huge conflict. We actually had something like that come up while we were working on our raison d'être. We both agreed that we wanted to work in a cooperative way, but for different reasons. One of us deeply believed in cooperation as a core value, something that was absolutely not negotiable whatsoever. The other simply thought it was the most efficient way to work together. What would happen if, in a year or two, we came to the conclusion that cooperation was not the most efficient method for our company? We would have to face a really big conflict, something that touches our fundamental beliefs. By doing this work early, we were able to identify our difference, discuss it constructively, and preemptively make a decision.

Reason #1: to make sure we actually agree on the fundamentals of our company.

The second reason is conflicts. Conflicts are going to happen. There's no way around it. What we can do, though, is create a tool to help resolve conflicts. And that's exactly what those pillars do! By writing them down, you get a clear piece to reference to whenever you happen to disagree on something. It won't magically solve all your problems, obviously, but it will definitely help.

Reason #2: to provide a tool to help resolve conflicts.

Finally, even if these pillars are mostly an internal tool, I believe they are an excellent way to communicate externally, especially regarding recruiting. If you know your values and write them down, it's easy to share them and make sure the people that apply to join you are on board with them.

Reason #3: to help recruiting people that are a good fit for your company.

There's one important thing to note though. Those pillars are not meant to be set in stone. They can and should change over time, as your company changes. They should reflect your reality at all times. There's nothing more frustrating than having a dissonance between the pillars of a company and the way it actually works. That's why it's important to regularly look at your pillars, and make sure they're still valid for you. That will help you either correct your company's actions or correct everyone's understanding of the company.

Recommendations on this topic

[article] Mission, Vision and Values – Part 1: Why you need them, and how to define them — A short essay about this topic, with a more generic point of view.

Step 3 - Coming up with a strategy

Our next step was to decide on our long-term strategy. We know we want to make video games, but what kind? Where do we see ourselves, ideally, in 2, 5 or 10 years? What are the big things we want to achieve? What skills do we need to acquire or develop in order to get there?

Why are those questions important? Why not just focus on our current game? Because we intend to build a company that lasts, and doing that requires to look into the future. More precisely, if you don't anticipate your company's future at least a little, you risk falling into a number of traps. Here are the ones that I am aware of.

The main risk is simple: producing a video game is an excruciating process. Once you've finally finished your game and released it, then spent another month fixing last-minute bugs and issues, doing some amount of support, and so on, you'll be down on your knees. And at that precise moment, you'll have to start working on the next game. Engaging in a creative process when your energy bars are at their lowest is not a good idea. But you're running a company, you cannot simply rest and not do anything for a while — unless you have a shit-ton of money but hey, if that's the case, good for you! Anticipating on this is important. You must know what your next project will be before the current one is finished. If you have a strategy, a shared vision of where you want your studio to go, it will be easier to agree on what the next game should be.

But there are other reasons for defining your strategy. It helps decide what kind of skills you want to nurture in your studio, either by getting internal experience or with recruitment. It helps decide what sort of games you want to make, in order to get ready for your "big goal".

And finally, it forces you to look at the bigger picture, instead of focusing on your current project. That is especially important for budgeting. If you want to make another game after the current one, how much money (meaning, time) will you have after the first game is finished? How long will you have to find new sources of income or funding? Is it realistic to spend all your studio's money now? When should you stop development and release to make sure you'll be able to stay afloat? Having a long-term strategy helps you answer these vital questions.

Let's look at what we've done and intend on doing. We know we want to focus on strategy games. It's a genre that both Alexis and I enjoy, and for which I have some game design experience. We know I have this card game I've been working on a while now, and we both think it has great potential. We also know that we want to create and explore original fantasy worlds. So we agreed on a long-term goal: we want to bring our studio to a place where it will be ideally suited to tackle my online, competitive strategy card game. How do we get there?

We need to build some experience on strategy games, card games, online competitive games and world building. So our first game is going to be a strategy card game set in an original world. Our second game will likely be an online competitive game, probably building on our experience making a strategy game. Then we'll evaluate if we're ready to build our "big game".

We estimate we need to reach a size of about 10 to 15 people to be able to take on our big project. We don't need to hire 10 people right now, but we want to have a regular growth to reach that number in about 5 years. So we're currently focusing on identifying the key skills we need right now, and recruit just one person that fits that role. We'll hire the next one when it's relevant, keeping in mind the kind of skills we need for the long-term.

For example, we're planning to go into competitive online play, so we need to start building a community of dedicated players as soon as possible. We're going to work on our branding, on community management and communication, on building a core of players that will follow us through our next adventures. But since we don't have that skillset internally, we intend to hire someone focused on those tasks. If we were only focusing on our current solo game, that would seem like a mistake. But we know that, long term, it will have a huge impact.

We have a plan. It might change, it probably will, but at least we have a vision for our future, and we take that into account for our day-to-day decisions. I believe that is a strength that will play an important role in the long-term success of our studio.

Recommendations on this topic

[article] Your Studio’s Next Game Is More Important Than You Think — Tanya X. Short, already cited earlier, goes into details about why you need to have a strategy if you want to build a lasting game studio.

Step 4 - Making a business plan

Our goal, as I mentioned earlier, is to create a company that is sustainable. In order to reach that goal, we need to generate money, and we need to make sure that we always have enough money to pay all the things we have to pay: our own salaries, social contributions, taxes, accountants and lawyers, tools and services, and so on. This is the disenchanted heart of running a company.

There are many tools to use to manage a company's finances, but when you're just starting like us, the main one is the business plan. It's quite a simple tool, answering a simple question: what will your income and expenses look like for the next few years. When do you expect to earn money, and how much? What do you expect to pay for, when, and how much? Collect that information, put all of that in a spreadsheet, use some simple formulas to make sure that it all works out, and you have a plan!

Now the big question is: how do you find all that information? The answer is, of course: it depends! I'm going to talk about our specific case of starting a studio and making a premium PC game. There are 4 categories of information I'm considering:

1. General company expenses
2. Game production expenses
3. Funding
4. Game revenue

General company expenses

These are fairly simple to figure out. It's things like salaries, accountants and lawyers, travel and conferences, buying hardware and software, tools and services, taxes and insurances, etc. That list can be quite long depending on your activity. In our case, it's isn't, mostly because we're starting as simple as we can. We only listed 11 lines for our general expenses, but we very likely forgot many more. That's not a big problem: the goal is not to be comprehensive, but to get a general idea of the feasibility of your plan. We just need to make sure we covered the most important expenses, and then account for a little more to handle what we forgot.

Game production expenses

These are all the expenses related to making our game. In our case, as we don't have much experience, we went for a very simple list: external contracting, localization, software licenses, testing and Steam. The numbers we put in there are rough and probably wrong. Once again, the goal is not to predict the future perfectly but to validate that the plan can work.

This part is also evolving a lot as we make progress on our game. It's very difficult to anticipate what your production will look like when you're at the beginning of your prototyping phase, but as your vision for the game becomes more and more detailed, you'll get a better picture and will be able to make better predictions.

Funding

Making a video game requires that you have some initial money to cover the expenses that we listed above. Funding, whatever its form and source, is thus required. It can be personal savings, love money (from friends and family), investments, government funding, or anything else. It can be, and probably is in a lot of cases, a mix of several sources. This is where the real guessing starts: based on your expenses, you know approximately how much money you need, and when. You can then start making various plans: what if I get a bank loan of 100k€ in June? How much does that cost me over time? Does it get me through to the end of my project? What if I only get half of that money?

Having a way to visualize this information was great for me. I put all the information I listed above in a simple spreadsheet. One row per expense or income source, one column per month for the next 3 years. Then I filed the boxes, and added simple computations at the end of each row and column, answering those questions:

• how much do we spend this month / this year?
• how much do we earn this month / this year?
• how much money will we have left at the end of this month / this year?

Using that tool, I can run simulations while knowing really quickly if it's working or not. Is there any month where we have negative money? The plan doesn't work. Is there any month where we have less money than we intend to spend on the following 2 months? The plan is highly risky. Do we having enough money left at the end of the project to move on to the next one? The plan can work!

Of course this is highly fragile. The data is full of guesses and mistakes. But if your plan puts you in a state where you just don't have any money left before you finish your game, then it's really important to know it and change the plan. This tool also helps figuring out what your deadlines are for finding money. For example, in one of our earlier simulations, we had a plan where we needed to find 100k€ before June this year, or the company would fail. That was a plan that we considered likely to fail, and thus we drafted a different simulation that gives us more time to find that money.

Game revenue

Now for the fun part! All of the previous categories were about making your game, but maybe the most important question is: how much is it going to earn you? Once you know that, you can answer some simple but crucial questions: is this game going to earn me more than it cost me? If not, should I actually make it? Will I be able to make another game after this one?

How can you figure out how much is your game going to earn, you ask? By doing… Market Research.

What's market research? Basically, it's three steps:

1. Find games similar to yours.
2. Get data about how much they sold.
3. Estimate how much yours is going to make based on that data.

This is big topic, and I actually published a dedicated article about it recently, so I won't repeat myself here and instead encourage you to go read it: How I did my market research on Steam.

Recommendations on this topic

• [article] Making the Budget of Thimbleweed Park — The creator of Thimbleweed Park goes over how he handled their budget. Lots of information, things to remember, and a very simple spreadsheet to get a general view of your whole budget.
• [article] What genres are players looking for on Steam? — If you want to make a living by selling games on Steam, it's a good idea to know what the Steam user base likes to buy. Chris Zukowski has a bunch of great articles on his blog about that.
• [tool] Games-Stats.com — Games-Stats is a great tool that I used to do market research for our next game. It gives estimated revenue for games based on number of reviews, has search filters, ranking by tag, and so on.
• [tool] Game Data Crunch — Game Data Crunch is another great tool to do market research. This one I used mainly for its filtering, as it allows to filter by several tags. Super useful when you're mixing genres and you want to see what other games have done it before!

Step 5 - Getting help

Building a company, especially if it's your first one, is super tough. The first few years are said to be the most difficult, and even with my limited experience, I can only agree. As of writing, I've been working on that project for about a year and a half, and we've had our official company for a few months. Getting started has been incredibly difficult: there are so many things to know, to think about, to handle at all times. Even with access to a lot of free knowledge on the Web, I found myself wondering if what I did was actually relevant or even just correct. The good news is: there are lots of people out there who can help you!

First and foremost, there are two key "companions" — probably a bad word as they are usually not colleagues but external consultants — that you need to find to create your studio: an accountant and a lawyer. The accountant is going to help you with everything that is related to the daily administration of your company, looking at your finances, doing taxes for you, and answering your questions about recruiting, funding, and much, much more. These people work with companies all the time, and they know a lot more than you do. Find one that you work well with, and ask them questions! It's their job to answer you as best as they can, to make your company succeed so that you can keep paying them! :D

The lawyer comes in less frequently, at least in our experience, but for key legal points. For example, we hired a lawyer to help us write our statutes and declare the actual, legal creation of the company. We'll ask them again soon about writing contracts for our first employee. They're helping us with our associates' pact. We meet with our lawyer less often but when we do it's really high value: we do not want to mess with legal stuff, as that can be very costly down the road. And if, at some point, you get into legal trouble, it's great to have someone you can turn to, who knows your company and your context.

Last but not least, I highly recommend joining a business incubator. My associate and I were reluctant at first, but finally decided to join a local incubator (dedicated to video games studios!) and I do not regret a single Euro we've payed them. The value is through the roof: masterclasses and workshops are nice, of course, but what really did it for me is 1. access to a large community of studio leaders with a vast amount of experience and 2. being part of a group of young studios doing the same things that we do. Even if you do not go with an incubator, keep this in mind: you are not alone in doing this. There are many, many people creating companies every year, going through the exact same steps that you do. If you can find others and talk with them regularly, that's going to be a great help for you: you'll gain knowledge, but also moral support — and boy is that needed when you're creating a company!

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There's a lot more to creating a company than just these 5 steps, but I believe they are the most important ones to know about, especially if your goal is to create a studio that will live for years. Finding money is probably the sixth topic, and the next one in terms of progression — at least it is for us — but it's also a huge beast by itself. I've been doing a lot of that in the past few months, and I learned a lot, so I might write about that next. But first, I have to tell you about something special to me…

Welcome, Arpentor Studio!

I am proud to announce that everything I told you about here led to the creation, in March 2022, of Arpentor Studio! We are a new game studio based in Lyon, France. We have a flat hierarchy and work in a cooperative way. There are only 2 of us for now, but we intend to grow slowly and regularly over time. We want to specialize in deep strategy games in original Fantasy setups. Our first game is going to be a card game mixing deck building with city building.

Follow Arpentor Studio!

Thanks for reading this long piece! I hope I did not sound too pedant. I know we're a new company and my experience is limited, but I've been nerding about this topic for a while now and I hope this knowledge will be useful to others. Let me know if you have comments or questions in the comments below or on social platforms. And if you've enjoyed this piece, please consider giving us a follow on social networks! ;)