L4

1. Pre-production and
Communication techniques
Money, Finance and Budgeting

2. Lesson Aims:
• All of you will know about funding in the games
industry
• Most of you will be able to discuss the benefits
and drawbacks of different types of funding
• Some of you will be able to criticize funding for a
specific type of game.

3. What is the highest selling game?
• Wii Sports with 82.69 million copies sold

4. How has the developments of games over the last
10 years made funding and success more difficult?
• More workforce needed to support the
developments
• New technology and techniques
• More time needed to create games
• More competition
All of this means more money is
needed to fund a game and there is
a higher risk of failure!

5. How many games are financially successful?

6. How many games are financially successful?
• Financially, the games industry is a very risky businuess.
Only the top 5% of games released make a profit,
• due to the high costs involved in making a game, a failed
game can often mean a small developer declaring
bankruptcy,
• while the larger companies report huge losses
• Its not uncommon for games to cost $12 million to
develop, with top end games costing up to $30 million.
• This budget does nothing more than cover the costs of
getting a game to the store. Virtually no profit is made,
and it is entirely up to the public whether a game
succeeds or not.

7. Self Funded
• Self funding requires a sum of
money being put forward by the
developer.
• This could be sourced through
sponsorships, loans, or private
investment.
• What are the benefits and
drawbacks of this type of funding?

8. Publishing deals
• A deal is made between the games
developer and publisher
• The developer creates the game
• The publisher funds development and
provides other services
• Developer receives share of total
revenue (royalty)
• Benefits and drawbacks of this option?

9. Publishing Deals
• Advantages:
• Higher budgets
• Financial security
• Access to contacts
• Builds reputation easier
• Other services included (distribution, etc)
• Disadvantages:
• IP ownership might belong to the publisher
• Sequel rights might belong to the publisher
• Distribution rights and other platform releases
might be decided by the publisher

10. Crowd Funding
• Collection of small amounts of money from lots of
individuals
• Usually generated through kickstarter style
projects and other development funds.
• What do you think the benefits and drawbacks
of crowd funding are?
• What types of games would be better suited to
this type of funding and why?

11. With Crowd funding….
• It is the individual or company that is developing
the game that receives funding so it is not backed
by a publisher.
• Benefits include:
- Creative freedom
- Owning the intellectual property
- Larger % profit from sales
- Manage your own time
Disadvantages include:
- Not able to afford advertising
- High cost of publishing, legal and software
- Loosing motivation
- No publisher support/ difficult to get the game out
- Can’t pay for talent.

12. In your report write about:
• Types of funding available for games
(self funding, crowd funding, private
investment, publishing deals)
• Which areas of games production
would need funding and why?
(equipment, transport, talent, crew,
materials, facility hire, clearances)
• Which type of funding would be
best suited to your type of
production?