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How to survive as a games company

Together with the Breda University of Applied Science (BUAS), Dutch Game Garden has worked on a project researching the driving key factors for the survival of game start-ups. As part of the research project, we have facilitated multiple strategy days, during which we interviewed twenty game companies who provide either entertainment or applied games, or a gaming-related service.

These panels have been divided into five videos and can be found on DGG’s Youtube channel. During the interviews, they were asked about their product/service provision, organizational design, pivotal moments of organizational change, and the key drivers behind that change.

 

Key Findings

This report presents findings on measures for survival and growth performance, by analyzing the outcomes of the four panels. For the analysis six well-known, well-established accounting measures (Balance Sheet Total, Net Sales, Operating Profit, Current Ratio, Solvency, and Return Rates) were chosen. Furthermore, a benchmark, a way to measure and compare business processes and performances, was pursued. This was done by comparing the accounting figures of the twenty companies.

While relevant data from Statistics Netherlands (CBS) is available and usable for this, CBS distributes gaming companies over multiple, highly diverse sectors (e.g. Publishers, IT Services, and Wholesale and trade mediation). This renders the validity of a gaming industry benchmark based on CBS data questionable. An alternative data source could be the Netherlands Chamber of Commerce, the official register of all Dutch companies. However, data from this source is often too incomplete to calculate the aforementioned accounting measures. From these investigations, it is clear that relevant accounting data for this report should be obtained directly from the source: the gaming companies themselves The data has been gathered by, with the help of DGA, sending out surveys.

Twelve out of the twenty studios were long-run start-ups, which are start-ups beyond their launching product and usually four to six years old. Among those twelve, five key themes of organizational change were identified: changes in product/service orientation or value proposition, revenue model, key partner and type of partnership, staffing, and division of labor, and scale of products/services provided.

Moreover, the report identified six key themes of pivotal change drivers: personal motivation or drive from the entrepreneur, financial problems or risks, reducing business risk, new technology influencing the market, changing market conditions, and an attractive new opportunity from partners.

Based on these results, we envision that a future research project would adopt a mixed-method panel methodology. That future research would be a scale-up of this preliminary investigation in terms of the number of companies analyzed, combined with the application of a quantitative survey approach and semi-structured interviewing. We are of the opinion that future researchers who analyze the games industry and adapt a survey approach, could use the work presented here as a foundation for quantifying variables of interest.

 

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