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 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, organisational design, pivotal moments of organisational change, and the key drivers behind that change.
This report presents findings on measures for survival and growth performance, by analysing 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 organisational change were identified: changes in product/service orientation or value proposition, revenue model, key partner and type of partnership, staffing and division of labour, 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 number of companies analysed, combined with the application of a quantitative survey approach and semi-structured interviewing. We are of the opinion that future researchers who analyse the games industry and adapt a survey approach, could use the work presented here as a foundation for quantifying variables of interest.
You can find the full report on driving key factors for survival of game start-ups on the website of the Breda University of Applied Sciences.
Panel 1 : How to Survive as a Game Studio
Panel 2: How to Survive as a Game Studio (Serious & Applied Games)
Panel 3: How to Survive in the Game Industry
Panel 4: Closing a Company: Stories from Game Developers
Panel 5: Closing a Company: Stories from Game Developers