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BUSINESS PLANS

How to Write a Business Plan for a Mobile Gaming Company
 

The rise of reality-based gaming via social and mobile networks makes it easier than ever to enter the market. Here's how you can start a gaming business.

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With the release of Apple's iPhone, mobile gaming has clearly become a major moneymaking industry (just as social gaming on Facebook has turned the industry on its head—see Farmville and its 100 million users). The next hot thing on the mobile gaming market seems to be the Android, but it's all about designing games that capitalize on the original addictive nature of gaming, to keep users coming back.

"Thanks to the rapid evolution of mobile technology, smartphones have transformed the real world into a giant game board, allowing users to interact and compete in ways that were science fiction a decade ago," says David Griner, a social media strategist for marketing agency Luckie & Company in Birmingham, Alabama. "Whether you're fighting to be Foursquare mayor of your favorite coffee shop or searching posters for hidden QR codes to reveal hints about a new movie, it's clear that businesses have more ways than ever to engage their fans and make day-to-day life more fun."

If you're looking to start your own mobile gaming company, your best bet is to leverage existing games and platforms, to figure out what people are already consuming, and then to try to beat the market there. Regardless of the platform or game idea, here are the steps you can follow as you put together your business plan.


Business Planning for a Mobile Gaming Company: Why You Should Start a Mobile Gaming Business

When Mark Zuckerberg set out to design Facebook, he certainly never envisioned it would be the No. 1 gaming platform on the web. And Apple surely didn't plan on games being the main driver of their app store revenue. Games have become mainstream entertainment, and are certainly no longer a basement-only activity.

Whether it be executives playing BrickBreaker while they travel, a senior citizens Wii tournament, New Yorkers playing solitaire on their subway ride, or a family night built around "Rock Band," everyone is playing games in some capacity.

"There are games now for pretty much every age, every demographic," says Jesse Schell, instructor of entertainment technology at Carnegie Mellon University. "More and more women are going online. It comes down to everybody is playing games. Games are just evolving like species in order to fit into every little niche of our lives."

In fact, about 40 percent of gamers today are women, and 68 percent of homes in America either own a console or PC used for interactive entertainment, according to the Entertainment Software Association's 2010 Essential Facts report. Additionally, the report notes, 42 percent of heads of households say they play games on wireless devices such as cell phones or PDAs, up from 20 percent in 2002.

"We're in a place where consumers are constantly consuming content over platforms all in the course of a day," says Matt Story, the Los Angeles-based director of Denuo (and former head of their gaming division, Play). "We've been playing games for 20 years with the sole purpose of getting a higher score than our opponent, and now that's just become a part of our everyday lives."
 
Dig Deeper: Should You Create an iPhone App?


Business Planning for a Mobile Gaming Company: Find Your Niche

As noted above, it's all about finding a blank space in the industry and filling that hole. Try to focus on a single platform early on and then if and when you grow, you can look to expand and broaden your product. Finding your niche is not specific to planning a business based around mobile gaming, but it is perhaps one of the most important factors you can consider. Just as nobody expected the iPhone and Android to become gaming hubs, there are likely devices that are being overlooked as future gaming devices. Is that the Kindle? Or is it just as simple as designing something new for smartphones?

Dig Deeper: How to Make Money on iPhone Apps


Business Planning for a Mobile Gaming Company: Test Your Product

"Perhaps better than any other industry, the gaming industry is really good at getting a product out there for consumers to use, get feedback on and see what they think," Story says. "If you think about some of the biggest products like a Halo, there are playable beta versions before the final product. The traditional model of holding back a product doesn't work in gaming, so feedback is key in helping you to avoid mistakes early on."

The beauty of mobile and social gaming's rise in popularity is that is has made it considerably easier to enter the gaming market as a small company, with limited capital. While the big studios like Electronic Arts, Rockstar Games and Activision may spend $50-100 million and employ an army of engineers, technicians, artists and more on their biggest titles (think Madden, Halo, Grand Theft Auto etc.), they are all based upon realism. With the success of games like Farmville and other Zynga offerings, the groundwork has been laid for the success of smaller, cheaper games.

"Perhaps due to the economic situation, we've learned that gamers are willing to sacrifice quality for cost," says Story. "It's gotten to the point where a few guys can sit in a room and bang out a game in three weeks for a relatively low cost, and then it's all about making that game social."

In the early days of gaming, the developer was involved in almost all of the testing. And as a small startup, that may still be your best bet as well. Rely on your instincts that you've developed as a gamer for guidance on what is working and what is not. Achieving broad appeal requires that some aspects of the game are engaging to the hardcore gamers, while other features appeal to the casual gamer. Once a playable prototype has been created, play it every day internally and make adjustments based on testing, thereby creating new versions quickly, evolving the game in the process.

Larger test groups provide valuable testing feedback and create games of wider mass and social appeal. But the reality is also that unless your game is addictive and easy to share via existing mobile social networks, your success may be muted. As games become more complex, a larger pool of quality assessment resources are often required, but as a start-up you don't have to focus on this early on. Use your network of friends, colleagues, and potential marketing partners to explore more opportunities on the testing level. With no proper or required reference to a complete and reusable test strategy, game testing follows a game-specific test approach. This ranges from completely ad-hoc and exploratory testing to a semi-structured approach based on testers experience, scale, complexity and production delivery date of the game. It's really up to you and what you want to get out of it.

Dig Deeper: Industry Profile – Self-Published Video Games


Business Planning for a Mobile Gaming Company: Find Marketing & Distribution Partners

Creating a game and then approaching potential advertising partners can be the wrong process, particularly in this industry. Gamers are some of the smartest consumers, so if you give them a product early on that is free and doesn't have any branding or advertising tie-in, when you try to retroactively add that in, gamers will typically balk.

A better way to approach your company is to find a marketing partner to help alleviate cost and raise awareness of the games. Not only will you not have to pour as much of your own money into the product, but you'll reap the benefits of having a marketing agency and access to larger brands at your disposal from an early stage. It's often difficult to get advertisers behind a product early on, particularly if you don't have something for them to see (this is again why testing your product is so vital), but if there is a great opportunity in an untapped arena, marketers would be more likely to partner up to help both parties.

Additionally, finding a distribution partner with reach and access from an early stage can bring about the social awareness that you'll really want with a new mobile startup.

Dig Deeper: Google's Play on Gaming


Business Planning for a Mobile Gaming Company: Make Your Game a Seamless Part of Daily Life

"I believe gaming technology will evolve to integrate into a player's daily life so that even their most mundane routines become meta-games in a grander scheme," Dan Greenwalt, the Game Director at Turn 10 Studios, told IGN when asked about the future of gaming. "Imagine an RPG where going to work and sitting at your office actually gains you experience points in-game, or going on a date in real life actually accomplishes a quest or a mission. By 2020, players will go from an always-connected lifestyle of today to an always-gaming lifestyle of tomorrow."

Greenwalt puts it very succinctly, as what it comes down to if you're looking to enter the mobile gaming market is finding a way to relate your game to everyday habits and lifestyle of your consumers. You can expect that if you succeed, your game will be successful for 6-12 months at best (even the top big studio games rarely remain relevant more than a year), so it's all about garnering social relevancy, conversation and keeping users coming back with new features and add-ins.
 
Dig Deeper: Industry Profile – Mobile Application Design

Last updated: Jul 27, 2010




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