COMPUTER GAMES AND ENTERTAINMENT

BUSINESS AND PRACTICE.

Lecture 8.December 2013

Prof William Latham Goldsmiths

MSc Games and Entertainment. 2011. Topics we will cover:-

1. Analytical Skills. Generic Skills for analysis for games industry

Step Analysis, Comparative Analysis,

Statistical Analysis, Risk Analysis.

2 The Standard Development Process.

Concept > Prototype > Alpha > Gold Master > Master Approval.

3 Production Processes. Waterfall, Scrum, Code and Fix << Last Week.

4 Contractual. Analysis of Existing Games Development Contract between Developer and Publisher. (COD Case Study). << Last Week.

5. Analysis and Mechanics of a Standard Royalty Model. (Boxed Product). << This Week.

6. Basic Business Models. As flow diagram.

7. Security:- Escrow and Backups of Game Data and access criteria.

8. New Business Areas. Eg. Social Networking, Facebook Games and other business models.

MSc Games and Entertainment. 2011 > 2012

9. Basics of creative Game Design.

10. SPVs. Special purpose vehicles and financing.

11. Further Basic Business Models.

12. Creating a Business Plan (Generic) and “How to Start a Business”.

13. Cash flow and financial Projections using Basics Business Models. In Excel.

14. Resourcing and costs on computer games Development.

15. IP Intellectual Property.

Business and Practice.

William Talk relating to Assignment No.2.

1. Revenue and Creativity.

2. Strategies for finding the million dollar idea.

3. Character of the Company.

4. Costs.

5. Raising Finance.

6. Investment.

7. Support.

Break.

PP Presentations.

Planning Work Assignment No. 2.

Online Research Create Short List of 5 business ideas within Constraints of the

Assignment.

Go through each of your 5 Original company ideas. 1:1.

ASSIGNMENT 2.

PURPOSE OF THIS ASSIGMENT IS CREATE A COMPANY IN THE GAMES SECTOR FROM ZERO.

With a small bank loan, a small amount of Angel investment, run as a service company to get going for 2 years

and

Then pick up significant investment followed by an Exit. (Sale).

A MIXTURE OF BIG VISION PLUS SERVICE WORK!

ASSIGNMENT 2.

Marking Weighting Breakdown.

-----------------------------------------

30% The vision, quality and strength of core business idea. Ie. Whether it will make money.

25% Quality of Financial Spreadsheet.

25% Your explanation of core business ideas and logic, the quality of business model diagram and clarity and completeness of business assumptions including presentation power point.

20% the quality of the pitch presentation in the Dragons Den.

---------------

100% TOTAL

30% The vision, quality and strength of core business idea. Ie. Whether it will make money

Captured in Company Concept Document covering:-• Name of company.• Logo / Branding.• URL.• Name/s of Products / Services.• Buy Line/s.• Platforms.• Big Vision of company. High Level Product / Service Description• USPs. Unique Selling Points.• List target Customers.• List Competitors.• Game Play Mechanics.• In House Technology.• License Technology. • Art , Graphics and Animation.• Staff and Skills. • Development Approaches.

Presented as Document and in PP Summary.

ASSIGNMENT 2.

Marking Weighting Breakdown.

-----------------------------------------

30% The vision, quality and strength of core business idea. Ie. Whether it will make money.

25% Quality of Financial Spreadsheet.

25% Your explanation of core business ideas and logic, the quality of business model diagram and clarity and completeness of business assumptions including presentation power point.

20% the quality of the pitch presentation in the Dragons Den.

---------------

100% TOTAL

Business Model. Define as Flow Diagram.

Costs.

Can be multiple

Revenue.

Can be multiple

Key Drivers.

Of Costs.

Fundamental to Business.

Company X

Key Drivers.

Of Revenue

Fundamental to Business.

Customersidentification / market size. Customer demand

Sales / MarketingHow company will reach customers. Sales / marketing.

Factors that will have a Radical Impact on business. Negative or Positive.

Competition.

What company does:-Product / Service / Offering.

Business Growth.

What this means

Traditional Games Development Model.

Costs.

40 employees at $10K per month X duration of project.

Rebellion

Cost:-Carries development costs and responsibilities

retains tech.

Revenue Development Advance $7m Cleared then Royalties at eg. 20% of net receipts. Shared merchandising.

Factors that will have a Radical Impact

Change Orders. Risk of cancellation / Breach. Fixed Price Contract.

CustomersMajor Publishers. Eg. EA, Ubisoft.

Sales / MarketingMeetings GDC, E3, DICE. Press Coverage.

Key Drivers of Revenue

Maintaining good relationship with one publisher. Line up 2nd Publishers. IP Retention.

Business Growth.

Aim for acquisition of company.

Key Drivers of Costs.

High salary costs, duration of project. Concept work. Office rent costs.

What company does:-

AAA Console game production. 3D Person.

Competition.Leading 3rd

Person Games Developers.

Can be accompanied by:-

SWOTSTEPRisk Analysis. Market Research.

Diagrams.

25% Your explanation of core business ideas and logic, the quality of business model diagram and clarity and completeness of business assumptions including presentation power point.

Captured in Short Company Executive Summary covering:-

• Name of company. (Same as Concept Doc)• Logo / Branding. (Same as Concept Doc)• URL. (Same as Concept Doc)• Name/s of Products / Services. (Same as Concept Doc)• Buy Line. (Same as Concept Doc)

• Platforms Business Model and Drivers Diagram.• SWOT diagram. (Optional)• SWAT diagram. (Optional)• In-depth info on target Customers with Comparative Analysis Table (Optional). • In-depth info on Competitors.• Business Assumptions and Drivers.• Discussion presenting argument why you will succeed.• Risk Analysis.

• Milestone Delivery Schedules. (Same as Concept Doc)

Presented as Document and in PP Summary.

Starting a Business.

Covering 3 weeks.

This week:-

Business Modelling / Rough Financials.

Initial Concept / Idea.

Produce Business Model.

Rough Financial Model. In Excel.

Produce Business Plan. 30 pages plus

Customer Evaluation. Under NDA.

Secure Investment / Loans.

Detailed Financials. Cash Flow. Tax. VAT.

Business Assumptions defined.

Produce Prototype / Define Offering.

Starting a Business.

The Process.

Accountants

Legal

Expertise.

Go into Production / Start Sales.

Initial Concept / Idea.

Produce Business Model.

Rough Financial Model. In Excel.

Produce Business Plan. 30 pages plus

Customer Evaluation. Under NDA.

Secure Investment / Loans.

Detailed Financials. Cash Flow. Tax. VAT.

Business Assumptions defined.

Produce Prototype / Define Offering.

Starting a Business.

The Process.

Accountants

Legal

Expertise.

Go into Production / Start Sales.

ASSIGNMENT No.2

Pitch / Presentation

REVENUE!

Carrie FletcherYouTuber.

1000 views generates £3 from viewers watching adverts.

Carrie has 250,000 regular viewers.

Targeted association with brands.

ChannelFlip is one of the world's most successful YouTube Multi-Channel Networks. We produce and distribute high quality video programming that features .

Part of Shine Group which also owns Bossa Studios.

Physics Related Games / Toys.

World Of Goo.

Cut the Rope.

Zen Bound

iPad and iPod Touch.

Katamari Damacy. Namco.

Where is my Water.

Cause and Effect.

Angry Birds.

Game UI Basics Sandbox

Construct your crazy vehicles. Great physics.

SODA CONSTRUCTOR.

DRAWING GAMES.

Scribblenauts

AUGMENTED REALITY GAMES.

Wonderbook. Augmented Reality.

Highly Stylised Games.

Thomas Was Alone. Mike Bithall.

Flower Game.

Curiosity. 22Cans

Cube. Removal game.

AI Games.

Richard Evans. Little Text People.

Worked on AI on Sims3.

Gamification and Location Based Games

Run Zombies Run. Price point $3.99 and $1.99. .

MapMyFitness ( http://www.mapmyfitness.com/ ) the company who sparkes online fitness training, initially was focused on cycling and running. In these months is going to integrate social fitness inside their other feature. The main difference with).

Strava.com ( http://www.strava.com/ ) This was one of the first companies to introduce social fitness, it keeps again track of cycling and running and allows you to register the workouts and the upload them on their website, you can challenge your friends and earn achievement.

RunKeeper (http://runkeeper.com/ ) This is an app to track your running workouts. Is designed to register workouts with GPS functionalities, save them and share them.

Nike Training Club ( http://www.nike.com/us/en_us/c/womens-training/apps/nike-training-club ) Strong from the Nike brand, this app is designed as your personal trainer.

Fitocracy.com ( https://www.fitocracy.com/ ) a new company focused on the gamification of gym workouts. People can share their results, have a profile and participate to challenge. The main difference is the user2user workout plans sharing.

Learning Games.

Dual Lingo Game. Language learning game. .

Borrow from old Games.

Jeff Minter.

Tempest. Working on TXK.

Dave Jones.Lemmings.

46

Retro Games.

Super Mario Brothers, 1984

Prince of Persia, 1991

Superstar Chefs

Roll7. Ollie Ollie.

PS4 PS Vita Strategic Content Group.

Changes in the console manufacturer business model.

Artistic Games.

Escher.

Eco-Chrome.

ICO

Influend by the paintings of Georgio De Chirico. (Surrealist Artist).

Designers Republic. Graphic Design firm based in Sheffield.

Produced Graphics for Playstation 1 game “Wipeout” for SONY.

WipeOut. Playstation 1 + 2

Designers Republic.

Music. Chemical Brother, Leftfield, Orbital..

Working Creatively.

Distinctive Art Style.

Rene Magritte

Salvador Dali

Use Cultural ICONS.

Yellow Brick Road.Scrooge.Frankenstein.Santa.Count Dracula.

• Also Create Characters! And give them names.

J.P. Brad Paige

Narrative Ideas.

Romeo and Juliet.Frankenstein.

Getting Home.

Thieves Fall Out.

Use Big Single Ideas that are easily understandable.

The Same Day Every Day.

Star Wars.

“Camelot in Space.

Knights of the round table in space.

Sword fights in space.

MIX BIG IDEAS!

Harry Potter. Tom Brown School days meets Merlin

Merlin

From Camelot

THEME:- DEVICE

A device that transportsS

Use of a Device

Used in Evil Dead. Hellraiser Movies.

Steal From Greek Myths. Good Narratives.

Go Retro! 70s, 60s, 50s.

USE THEMES:_ THE BIG SIEGE

. Michael Crichton. Novel

Theme:- Things perfect then go wrong!

MAKE A SCRAP BOOK.

Of things that interest you around a Theme.

CREATE YOU OWN KEY.

= Guard

= Spotlight

= Woods

= Noisy Area(eg. Metal Bridge)

= WALLS

= Shadow

USES KEYWhen working out game ideas.

= Path of Player

= Pickup

Noisy Area

Guard B walks back & forth

Stealth Games

eg. Thief, Splinter Cell

Spotlight

Guard A walks back & forth

Shadow

TREES

WOODS

CASTLE

Consider Licensing a Brand.

Old Brands Can Be Fairly Cheap.

Eg. If you are making a war game you could License Sven Hassell Brand or a specific book. Legions of the Damned.

Though licensed Brands Come with Constraints and at times approvals from brand holder.

Hammer Horror License

Witchfinder General

Dracular.

Woman in Black.

Tales from The Crypt License.

Keep Ratings in Mind!Know your target audience.

Creative Business Combo Ideas.

A + B = New Product

Eg.Lemmings meets Angry Birds

Lots of lemmings firing birds!.

Creative Business Combo Ideas..

A + B + C (styling) = New Product

Candy Crush + Roulette Wheels + (In 70s Styling)

.

Creative Business Combo Ideas..

Use an Original and Catchy Name.

Keep it Simple!

Descriptive:-•Temple Run.•Tomb Raider.•Space Invaders.

Good / Strong associations:-•Candy Crush. •Doom.

Check www.name.com is available!

Names

MIX & MATCH

Recyle Existing Names.

+

++

“METAL QUEST”

Gives youJ..

++

“GTA: Anarchy in the UK”.

Gives youJ..

Lots of other books to recycle:-

Be lazy just recycleJLots of great names to recycle.

Define Character of your Company at the Start

Very hard to change later!

Mind Candy

Can be good for recruitment.

Will Clients visit the office?

.

IKEA Best?

Or

Second Hand / Bankruptcy Salvage?

ORG CHARTS. Define the Reporting Structure.

Separate out Core Organisation and specific product / service divisions.

Be able to scale up or scale back rapidly.

Competition Within Organisations.

Can be built in at Outset.

Lionhead.

THALES TRAINING & CONSULTANCY THALES

TRAINING & CONSULTANCY

Team

Worker

Resource

Investigator

Plant

Monitor

Evaluator

Complete

Finisher

Shaper

Co-ordinator

Implementer

Driv

e

Belbin Team Role WheelPeople

Development Approaches.

• Agile.• Waterfall• 3 PPs.• Extreme Programming.

Development Approaches. Do you use Game Jams Internally.

Ref. Bossa Studios Heart Surgeon came out of a 24 hour Games Jam.

Vision: Sometimes captured in Company “mission statements

Looked at by Investors / Banks / Clients. ”.

Example Mission Statements:-

“We do not take on any project less than £20K in value”.

Example Mission Statements:-

“We will retain all our IP even if we have to subsidise Projects”.

Example Mission Statements:-

“We will never license our proprietary technology”.

Novel Internal Roles to define company and add differentation With Competiors.

Ambassadors.Prophets

Novel Internal Roles to define company and add differention.

Disney Imagineers,

Imagineering is responsible for designing and building Disney theme parks, resorts, cruise ships, and other entertainment venues at all levels of project development.

Imagineers possess a broad range of skills and talents, and thus over 140 different job titles including illustrators, architects, engineers, lighting designers, show writers, graphic designers, and many more

Branding.

Specialist Trademark Lawyers such as Gallafents. (Cost £3K to £100K)

Challenge is to get a new trademark you need to have proof of trading under that trademark in desired sectors. (eg. Press Cuttings, Adverts, Online Store Usage)

COSTS!.

CONFERENCES AND TRADE SHOWS.

Opportunity Sales Costs. CONFERENCE.

Key Aspect:- Define Goal/s.

GDC,SIGGRAPH,Seedcamp.Noah.Develop Conference. GameConnection.

Cost of Travel.+ Hotel (or stay with relative / friend)+ Registration Fee (cheaper if in advance).+ Per Diem. £50 per day.

Have smart business cards + A4 Folder.

Divide Conference up to 30 min to 1 hour slots from 8am to 8pm and fill every slot. Give walking time. People will start booking slots 3 to 4 weeks in advance.Hold some slots clear to the very end.

Probability of success.

Main Games Lawyers.

Osborne ClarkeSheridans

Vincent Scheurer.Sarassin LLP.

Using Recruitment Agencies.

15% - 20%. Of First Years Salary.

Legal Costs..

IP

• Copyright• Patents• Trademarking.

Creation of Standard Contract Agreements.

Office Leases / Agreements

Negotiation on New Contracts.

Main Accountants / Book keeping.

Find Firm that will do R+D Tax credits.

Development Systems .Costs.

Playstation 4 Development Systems (Excluding Screens)

Euros £3700 each.

Grants and Awards.

Wellcome Trust. £30K

AHRC Awards £25K - £1m.

Nesta Awards. £25K - £80K

EU Bids. £1m - £5mCan be SME Lead.

Not for including in assignment no.2!

Core Business Mechanic that Drives Business.

Identifcation of key Financial Drivers.

Business Model. Define as Flow Diagram.

Costs.

Can be multiple

Revenue.

Can be multiple

Key Drivers.

Of Costs.

Fundamental to Business.

Company X

Key Drivers.

Of Revenue

Fundamental to Business.

Customersidentification / market size. Customer demand

Sales / MarketingHow company will reach customers. Sales / marketing.

Factors that will have a Radical Impact on business. Negative or Positive.

Competition.

What company does:-Product / Service / Offering.

Business Growth.

What this means

END