How to Write a Mobile Game Business Plan
December 2, 2015
It's important to approach your game not only as a game, but also as a business.Even if money isn't the sole objective for game devs, you need capital to create the game, to market the game, to acquire users and to keep the game running post-launch. Just like any business, it takes constant internal investment to succeed externally.[caption id="attachment_12970" align="alignright" width="226"]
Nicholas Laborde[/caption]While not every mobile game is created equal, there's a common starting point where each game developer should begin when inquiring for this capital: create a business plan. Why? Investors and publishers alike will be expecting a formal document that outlines the business of your game before they decide to give you money. A game demo won't stand on its own.But who has time to figure out how to write a business plan? Never fear, our mobile game business plan guide is here! To create it, we turned to Nicholas Laborde, founder of Raconteur Games. Not only is Raconteur currently developing several mobile games to add to their current PC offering, but Laborde holds a bachelor's degree in business and is currently pursuing his MBA at University of Louisiana at Lafayette. What follows is a springboard for developing a perfect business strategy around your game?one that will help you attract investors and publishers, and, ultimately, game players and payers.[caption id="attachment_12969" align="aligncenter" width="1920"]
Raconteur Games' Close Order[/caption]
I. Executive Summary
You've heard it all your life: First impressions are important. So, too, is the executive summary, which functions as an overview of what you'll cover in the plan as a whole as well as an enticement to the reader to keep looking over the document.The executive summary should be no longer than a single page, and should give a clear explanation as to why your game exists (or will exist in the future). Briefly discuss the product, who your players are (or will be), and why now is the right time for your game from a business perspective (e.g. is there a space in the market for your game?).
II. Company Description
The mission statement is where the company usually goes wrong. Like a poorly delivered punchline, this can severely undermine the perception of your company. According to Forbes, a good mission statement must answer the following as strongly and as succinctly as possible:
- What do we do?
- How do we do it?
- Whom do we do it for?
- What value are we bringing?
You'll also want to discuss who the people involved in your company are, what they do and what the legal structure of the company will be (e.g. LLC, corporation, partnership). If you're not an experienced entrepreneur yourself, you'll need to show that you are surrounded by people with the right stuff. If your entire team consists of first-timers, be prepared to seek out help through mentorship, coursework, incubators or accelerators, and then include these activities in your business plan.
Games are risky. Period. With gaming, it's hard to do market research. The sales management principle which suggests that efficient processes (among other internal situations) will result in higher sales doesn?t ring true for games. You can have the most efficiently run game development company in the world, but if the market is not willing to accept what your game is in a broader sense, you're finished.
For market research, boil your game down to one or two core identifiers (e.g. shooter, RPG, rhythm game). Then, use a service like SteamSpy to look at games similar to yours. Come up with a spreadsheet to see what their average price was, how many units they sold and what the general reception of the game was. Next, try and put your feelers out and see what kind of people will likely play your game (and make purchases). Hint: The answer is not "anyone who thinks my game is awesome." Dig deeper. Is it college students who love RPGs? Is it working adults who love playing in ten minute increments? It's important to get a handle on this based on who's playing the games of your core identifiers.You'll also need to zero in on competition in your space. Again, much like with the previous example of efficient processes, games don't directly compete with each other unless you're Battlefield and Call of Duty. That being said, the indie market?especially on mobile?is CROWDED. Find out what you're up against and include that here.Congratulations, you've done market research! Not so bad, eh? This will also help you later in the plan.
This is where you discuss what you intend to sell, the life cycle/projected life of the product, how you intend to price and distribute it and who owns it. Describe your product in detail, but get straight to the point.
V. Marketing and Sales
This is the hardest section. However, you can boil it down to three big concepts: growth strategy, communication and prospects.The growth strategy is, simply enough, how you intend to grow the business. It sounds really business-y and vague, but in your case, it's likely product development?as the name implies, you'll be making more products and ideally for an existing audience. If that's not it, try to choose one that is a genuine fit for your product and company. This is a small but pivotal moment to show how you'll beat the odds.
Second, with communication, explain how you'll talk to your players (and eventually acquire them). ?Social media? is not the answer. You want to present a plan around where your players are (which you should have identified to some degree previously when we talked about knowing who they are), how your product appeals to them and how you'll get them on board.Finally, prospects represent any opportunities that could contribute to your marketing. Are you doing something incredibly different, perhaps controversial, that will cause a stir? Is this something the industry has talked about but never actually done? You get the picture. Remember, base this in fact, not your interpretation of your product and its quality.
VI. Financial Projections
This section is where a startup accelerator can greatly assist you. Standard plans show actual balance sheets, income statements, etc.?in reality, not every mobile game dev knows how to create, or even interpret, financial statements. If you can enlist some professional help to come up with genuine statements, that would be fantastic. But if you don't, this is where you can further present the previously conducted market research to give hard numbers on how similar games have performed. You can naively assume that you'll be the average. While it likely won't be true, you've still done research and crunched numbers. If the numbers aren't endearing, you may be in the wrong part of the market and might need to rethink your product.
Further, it is important to add in a cap table. A capitalization table showcases how much equity the founders (or any other parties have in the business) own. If you're a solo dev, you of course have 100 percent equity. If you have several members, this is where things can get a bit complex. To make an extremely basic summary, you'll want to showcase how much ownership percentage each founder has, how much (if any) is set aside for employees and how that ownership would be affected by selling stock/equity in exchange for investment. An investor wants to see your due diligence in this area. While what you present and what an investor wants will greatly vary, make sure to do your homework in this area, because ownership percentages (and owner roles in the business) not being clearly defined is a major red flag. You can get a guide on cap tables here.Finally, don?t underestimate your marketing costs! Indie developers will commonly tell you that marketing their game is the hardest part of development. 20 or 25 percent of your budget should be allotted to this area. If that seems like a lot, to put things in perspective, blockbuster AAA games allocate roughly half of their budget to marketing. If an interested party looks at your plan and doesn't see a budget for marketing, this will be a giant red flag.
This is for any extra information you may have cited or wish to include. The ESA's annual report is a great resource to cite and include.For more information visit sba.gov