Joshua Glaze

                                          Understanding the games industry- financial issues
Introduction

 In this blog I talk financial issues in the gaming industry, I will be discussing how games that where a financial flop and failed to live up to there potential could have prevented there game from failing saying what they could have done differently.

According to statistics the revenue for the gaming industry has been gradually increasing through the years. In 2015 the game industry's revenue was stated to be over 4 billion which is over a 7% increase from the previous year. in terms of revenue and sales USA and China are the top of the gaming industry. Currently the UK is the 6th largest video market in the world which is very good as it is alot smaller compared to most of the countries above it.

Game making costs

The gaming industry involves a lot of money with games being very expensive to make as there is many different stages to making a game and many different costs such as voice actors.
some of the many costs include production and development costs. The soundtrack in a game is one factor that would cost a lot as you would either have to get the rights to multiple songs for the game or hire musicians both of which would be costly. There will have to be funds for the developers and voice actors salaries. Licensing would also be a problem as it is very costly however is needed as you wouldn't want a lawsuit as that could destroy the whole production of your game.

How can a game in production be funded

You can fund a game you are creating by yourself however that is definitely not recommended  especially if you don't have a lot of money due to what the overall cost would be and it is very unpredictable how much money you will receive from the game there are still a few benefits if you do decide to go with this though because you would not have to convince or rely on anyone else for the funding of your game as it is all down to yourself also all of the profit that you make from the game will go to you as you have done most of the things in creating the game cutting out the third parties.A bank loan is another possibility however this is risky as you don't know if you will make the money back and if you didn't it could leave you having to pay extra for tax and could end up in debt.

However, this could also land you a significant amount of money which will greatly help with the creation of your game and could make it a lot easier to finish the product quicker which would save time and money. An investor would be very similar to a bank loan however they would be able to pull all of the money from you at any time and that they will take a much larger cut depending on how well the product does. Lastly there is crowd funding through the use of things like Kickstarter this can fail as you could not get funded at all however if you was funded throughout this method then your game will most likely end up being successful as you will already have a target audience for your game and have a fan base who have donated and definitely will buy the game.

Manufacturing and distribution

If you decide to Put your game into an arcade would be expensive and would most likely result in a loss in profit due to the decline in arcade gaming. You would have to have an arcade machine and arcade cartridges can be very costly being about as expensive as a console game and it is much less rewarding. Ordering discs in advanced could also be very costly as you could sell alot less then you had predicting and end up losing out on alot of money.

Promotions and marketing

Good advertising is very important to the success of a game and could make or break a game as you want to spread the word of the game and get more people interested in the game. There are many different ways of promoting a game with the most popular probably being television advertisements making an ad highlighting all the best features of your game and making it look attractive to the audience this however is very costly as you would need to pay for what channel you want to be advertised. There is also things like launch events such as E3 where gamers and developers alike are gathered this would bring alot of attention to your game as it will be seen by alot of people who watch these events and a good performance at this or any other event could greatly influence the success however a bad performance would be very negative for your game. Print advertisements is the final m method of marketing that I will talk about this includes things like posters which would require an artist and cost to get placed in certain places.

Indie game development problems

A major problem when creating a game as a small developer is the fact that it would be hard to spread awareness for your game and it is less likely to earn you major money as there is a huge amount of indie games already available for many consoles with most genres being covered and most likely will be rivaled by big companies already with a huge fan base compared to yours. Also it is harder to get money as there is no guarantee you will do well making it less likely that you will get a loan.

Conclusion

Finally I think that creating a game can be very risky as there is no guarantee you will make profit and it could easily leave you with hardly any money or in debt however if it pays off the rewards to making a game are great, lastly i do not think i will be creating games in the near future as it would be too risky and would cost way too much money and should only be attempted if you will still be stable financially if your game failed massively. Finally I will not be creating a game any time soon as it is way to expensive, also it is far too risky to partake in right now as i am not in a position where i can guarantee that i could create a game and still have money left over to live on.