This document discusses options for entering the game development business, including original game creation, game development outsourcing, and game development services outsourcing. It estimates the costs to develop World of Warcraft and outlines the growth of video game outsourcing. Specific advice is provided on starting a game development outsourcing business, including necessary equipment, infrastructure costs, staffing needs, and strategies for success. Original game creation carries the most risk but also the highest potential earnings, while game development services outsourcing has the lowest risk but also the lowest earnings.

1. Cesar S.Tolentino
3rd ICT Summit, Bacolod City
November 25 to 26, 2010

3.  World of Warcraft (WOW)
 Estimated US$40 Million to develop
 Generated US$1 Billion in revenues in 2008
 ROI (estimated as of 2009) = 5x to 8x (500 to
800%)
 Years to reach 5x ROI = 4 years
 Everyone now wants to be the next World
ofWarcraft

5.  Video game outsourcing was estimated to
have reached US$1.1 Billion in 2009
 This will reach US$2.5 Billion by end of 2010
 Outsourcing by the end of 2010 will represent
over 40% of the budget for creating a video
game
 70% of game studios outsourced in 2009,
reaching 90% by end of 2010

6. E – Estimated, P – Projected. Source: GDAP, 2010

7. AWARDS NOMINEE, 2006

8. How do I get into the game
development business?

9. Three Options
 Original game creation
 Game development outsourcing
 Game development services
outsourcing

10. Original game creation
 You produce everything from concept to game design, to
game creation, and to marketing to a publisher or distributor
Game development outsourcing
 A publisher or independent developer comes up with the
concept and game design (and markets the end product),
while you execute the game creation
Game development services outsourcing
 You only handle an aspect of game creation, either pre-
production/concept art, character design, game art/animation,
sound production, voice-over, game programming, or game
testing

11. Pros
 You maximize your earnings
 You get to exercise artistic freedom
Cons
 Maximum risk
 What if the publisher/distributor does not like it?
 What if the product flops in the market?
 Can be capital intensive since you will need a full-
service organization (large overhead)
Example: Anito: A Land Enraged, self-published by
Anino Games

12. Pro
 Publisher/Independent Developer takes the risk of the
product’s market success (your payment is
guaranteed no matter what happens to the game)
Cons
 Earnings are moderate (not like self-publishing)
 No guarantee the publisher/independent developer
will come back for another try (especially if quality is
not good, and the product fails in the market)
Example:Circus Games by Matahari Studios for
Ubisoft

13. Pros
 Publisher/Independent Developer takes the risk of the
product’s market success (your payment is guaranteed no
matter what happens to the game)
 And usually sends a lot of specialized work on more than
one game (your pipeline can fill up fast)
Cons
 Earnings are small (since your contribution to the entire
game is minimal)
 Publisher/Independent Developer exercises strict quality
control and time management
 You will need to scale up fast (can be capital intensive)
Example: Game art on Afro Samurai (Namco) by Secret 6

14. Art Outsourcing
 High-end 3DWorkstation with …………… US$12,000
3D Studio Max, Maya Unlimited,
Adobe Photoshop CS5, and
Microsoft Office Professional
(plus dual LCD monitors)
Game Programming
 High-endWorkstation with …………… US$3,000
Java, C++, PHP and Microsoft
Office Professional
(plus LCD monitor)

15. Other Hardware/Infrastructure
 Scanner, Printer, LCD Projector……………… US$2,000
 GraphicsTablet (optional for …………………. US$2,000
Art Outsourcing workstation
 File Server & Network Storage………………. US$5,000
 Security Camera System
 Project ManagementTools
 Cubicles, Chairs, Headsets
 Uninterruptible Power Supplies
 High-Speed Internet Connection
 FTP Servers for Pick-Up and Delivery
 Redundant HVAC System
 Subscription to System Back-Up/Business Continuity

16.  Two artists, three programmers, two other
staff, and one studio manager
 Two Art Workstations,Three Programming
Workstations, and Miscellaneous
Hardware/Infrastructure
 Possible Equipment Capital Cost = US$45,000 –
US$50,000
 Possible OverheadWorking Capital = US$40,000
– US$50,000 (for first 6 months)
 TotalWorking Capital = US$85,000 –
US$100,000

17.  Start small, scale up moderately
 Focus on specialization in a game design element from
the get-go (like the best in a particular game genre,
platform or language)
 Be prepared to diversify horizontally from the get-go (can
start as services outsourcing in game art but plan an
upgrade path into game programming and/or game
design, and then into game testing)
 Establish relationships with publishers and independent
game developers even when your company is still in the
planning stage
 Never be afraid to collaborate with erstwhile competitors

18.  For more details
Contact: Cesar S.Tolentino
cstolentino@yahoo.com