Starting a game development company

#1 Hi it is nice to see you applying yourself to an endeavor you enjoy. In my county Monterey California in order to get a ficticious name statement or to get a business license you must be 18. Also, IIRC, in order to enter into a legally binding contract you must be of age. If you use your father as the owner and person in charge, then that should be no problem as long as he is aware of the situation.

However, the best bet is develop a game first. Get the game under your belt then worry about starting the company. There is no use in starting a company if no revenue is coming in and you are the only employee. Start the game, and let the direction this takes you determine what course of action to take next. Creating a business for your game is irrelevent until you have a game, at this point meaning you are just starting out and have no funding, and you are not having any type of employees.

#2 As far as I know you don't pay income tax until you are 18 and/or earning over a certain amount of money (this is in Canada, might be different in the states)

Loler

#3 Thanks for your advice Sam.

Yea, I know what you mean. I rather sound foolish, in starting a company with no "finished" games.I am working on some projects of my own, along with another team, but as far as business with the other team, I'm just an employee(not under contract though).Well, here in Ohio, the age limit is probebly 18(16 if I'm lucky), so I suppose it's never to early to start thinking about these kinda things.Especially since I consider myself a little ahead of time, as far as game development.So for now I suppose I have my gameplan of

-finish game first
-father register company in his name
-father employee me
-I run things, and keep him aware.
-Trademark, copyright, and get IPR, on everything.
-And finally, well, you all know it was coming.Find a publisher.

I'm still open to any articles or resources you folks may have.
Thanks

#4 Thanks for your advice Sam.

Yea, I know what you mean. I rather sound foolish, in starting a company with no "finished" games.I am working on some projects of my own, along with another team, but as far as business with the other team, I'm just an employee(not under contract though).Well, here in Ohio, the age limit is probebly 18(16 if I'm lucky), so I suppose it's never to early to start thinking about these kinda things.Especially since I consider myself a little ahead of time, as far as game development.So for now I suppose I have my gameplan of

-finish game first
-father register company in his name
-father employee me
-I run things, and keep him aware.
-Trademark, copyright, and get IPR, on everything.
-And finally, well, you all know it was coming.Find a publisher.

I'm still open to any articles or resources you folks may have.
Thanks

#5 Mike I never said you sounded foolish nor did I want to come across that way. Heck, I want you to make your game I am 29 and people like you will be running the country one day, or better yet, making the next DOOM :)

The point I was trying to make is if you don't have any employees but yourself and no demo or game, don't worry about the business end. The game plan you have above sounds good. Just start your game first, and at least have a tech demo, so I can play it =)

Its never foolish to dream and strive to reach your goals. You come across better then most people who say I am creating the next greatest MMORPG who can't even code just has a good idea, well a good idea is a dime a dozen. Its the ones who implement it and actually do something about.

All in all good luck in your endeavors hope to hear about you soon! =)

#6 "Mike I never said you sounded foolish nor did I want to come across that way."

I meant I sounded foolish to myself, lol.Anyway you've made valid points, so I thank you for your help.

(hehehhe, next doom? Maybe in 1-2 years ;) )

I just started building a website a week ago, and am busy filling it up with my project, f.a.q's, tutorials, etc.It should be done sometime in August, so I'll have to post it up in the general section or somewhere, so you can see my progress.=)

Well, now that I don't have to worry much about business, I can go make my mmorpg(lol, j/k, the newbie syndrome is gone,i swear!)
Anyway, I'll keep you guys posted on my progress, whenever the website finishes.

note: there's one torque project, 1 dark basic pro project, and one that I'm just building from scratch with VB.

#7 Mike,

I'd worry more about college than business at your age. Running a real company takes a lot of time and resources, and with the amount of effort you would have to put into it to achieve any success, you could probably get into Harvard, which by the way is a hotbed of young entrepreneurialism, and probably would give you a far better environment to start your company and have it take off. I'd say this is true of any college in comparison to high school.

When I was 14, college seems a long way off. And it was. It was like 25% of my lifespan since learning to speak. But if you think of 4 years in terms of game development cycles, that's only a few games. Using Half Life as an example, that game was in development for about two years. Even Half Life mods like CounterStrike spent at least a year in development before it was any good. If I had a choice at 14 between releasing 1, 2 or, 3 games during high school, OR going to a kick-ass college, I'd choose the college one. Unless you release the next Doom, your odds of astronomical success are very low.

I think you should definitely keep abreast on all this stuff, of course. Being very knowledgeable is to your advantage, but once things start sucking your time away from other necessities, that's usually a bad thing.

If you want to release games pronto, I'd focus on looking into Intellectual Property and licensing concerns. If you can copyright your work and have a proper EULA (End-user License Agreement) that goes with it, it should be pretty safe to sell without a big fear of someone stealing your work and re-releasing it as the next big thing make all the money that should go to you. As long as you can legally hold copyrights and enter contracts, you can release software with license restrictions, or enter into contracts with other developers. You will have no limits on what you're liable for, except for what's exempted in your license agreements.. So if you borrow $100,000 to make your game, and you don't ever recupe it, your investor can sue you and your parents out of house and home to get every last penny back, plus interest and damages (no limit). If you were incorporated, this could not happen, as the "corporation" would possess sole responsibility, and the "corporation" could file bankruptcy, without affecting the personal credit records of you or your family.

Another thing you could potentially be sued for damages for is copyright infringement. If your game looks an AWFUL lot like another game on the market, the owner of that other game may sue you for infringement. If you were incorporated, the worst it could do would be to put your company out of business. But if you were not incorporated, they could sue you personally for damages (like the poor college kids trading Kazaa files).

These are just the things I know, and my knowledge of things like this is next to nothing. I would just keep things small and privately-owned for now. Your odds of running into problems are slim unless you blatantly copy something else, or borrow a lot of money. If your game starts selling like hotcakes, and you find yourself making thousands of dollars a week, by all means, incorporate ASAP, but might as well keep things low key for as long as you can.

Also, just as a sidenote, I'd like to let you know that nearly all my computer-geek friends (including me) started designing games when we were in high school. None of them were ever completed, and nobody ever earned a cent from them. And none of us work in games now.

Then again, John Carmack drives a Ferrari.

Disclaimer: this is just advice, if following this advice gets you killed crossing the street by a car, but not following it would have you win 3 billion dollars in the lottery, that is not my fault.

#8 Thanks for the advice Scott.

So overall,

I suppose I should just finish a game and sell it through the internet?I mean as long as it's copyrighted, I'm safe right?

Well, I have plenty of reading too do for now I guess.

#9 Hrm. Let me toss out a couple pointers here too. Personally, I think what you're doing is great - GO AHEAD and start young! You can always put a company on hold for a few years if you want to while in school, or develop part time while in college. Whatever works for you - you're going to have more free time while in college than you ever will again, anyway - I say might as well make use of it!

OK, business law on founding of sole proprietorships and corporations varies from state to state, and sometimes from county to county within the state! Best bet will be to contact your local state-supported agencies for advice and assistance on the laws. Here in Vermont, the best bets would be the Secretary of State office (for laws and forms, and actual filing of business name and permits), the Small Business Development Corp (nonprofit that offers micro startup owners classes, limited funding on occasion, info books, and advice), and possibly the best resource: the Small Business Association.

On the SBA - one of the BEST resources they have is a national mentoring program, where they pair a retired volunteer business owner/exec with new entrepreneurs to give them counseling, advice, info, and help on a wide variety of subjects. My guess is that could be a HUGE help for you. They also publish a lot of free material that will help.

In Vermont (and this DOES vary, check local laws), a sole proprietership does not necessarily require a tradename and business registration; one can simply start a business as "MyName, game producer", "MyName programming and games", or anything along the lines of "MyName: trade". This is legal because it's not a "fictitous name" - those do require registration. If this is possible in your area, I think this is your BEST bet, given your circumstances.

Another option if all else fails might be to look into incorporation in another state. Used to be this was more common than it is now, when a ton of New England businesses used to register in Deleware because the laws there were more beneficial to small business than in any of the New England states. You're not looking for benefits - you just need some state (any state) that might let you incorporate as a minor! Check the requirements in every state til you find one that can do it.

Again, can't stress enough that getting help from local organizations is the best idea. Getting them to take you seriously might be difficult. Present a mature and businesslike appearance and show them you're serious about this, and you can win them over. Every state in the US has organizations that we all pay taxes to support whose primary purpose is to help budding entrepreneurs get a good start. USE those resources.

Good luck!

#10 Kevin McLaughlin

Thanks for all your help and suggustions. For now, I've decided to hold off on starting a small business until I'm 16 or so.
(Like you said, laws vary in different states for age limits.)

I'll definitly be sure to read as many books as possible on business until that time.

I also remember seeing that incorpating with Deleware was about 2/3 the price of with Ohio,(I'm from Ohio.)so that's definitly something to look into.

Thanks for your great advice.

#11 I think that's a good idea.

Personally, I'm not starting a business until I have a game that's complete and ready to sell. It's not going to be too much longer though.

But, hopefully, I can distribute it through GG and won't need to start a business.

#12 Hmmm... Business and Legal advice on starting up a game company. I may have a few things to say. If you haven't had the chance, check out my three start-up developer articles. I have been told they can be pretty helpful.

http://www.intelaw.com/pages/thb/articles/gamearticle1.htm

http://www.intelaw.com/pages/thb/articles/gamearticle2.htm

http://www.intelaw.com/pages/thb/articles/gamearticle3.htm

You already own everything that you create yourself. So if you are the only contributor there is really not much you need to do. If you have a few people contributing you need to either have everyone assign their rights to one of you or form a company and all assign your ownership to the company. Why? Simple - because you can not sell what you do not own.

Overall I agree that the most important thing to do is to make something. And so long as selling it is not the most important thing, the process itself is its own reward. But if you ever want to sell it these little things like establishing ownership become important.

Good luck and I'll stop in from time to time to see if you have any new questions.

¤º°'°º¤,'',¤º°'°º¤¤º°'°º¤,'',¤º°'°º¤

Thomas H. Buscaglia, Esquire
T. H. Buscaglia and Associates
80 Southwest 8th Street
Suite 2100 - Brickell Bayview Center
Miami, FL 33130
Tel (305) 324-6000
Toll Free 888-848-ILAW
Fax (305) 324-1111
http://www.gameattorney.com

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#13 Thanks for the links, i had lost them in a HD crash :)

Btw, would you know of a good counterpart of yourself for canada, hopefully in the montreal region?

#14 Thanks for those links. They're really helpful, and you did a nice job on the articles.:)

You pretty much discussed all the things that first wound through my head, and that really helped.

I'll keep my mind open if I have any more questions.

Thanks again.

#15 NP...that's why a wrote em!

#16 Well, to answer your question, I'm 13 and started a business with another 13 year old without a problem, so here's some hard proof that you can do it :D

--Nick
www.goldbullet.com

#17 Wow that's great to see Nick. Only problem is, I'm still concerned about any legal problems. Like registering business, and stuff like that.

Great to see younger people in business though.

Keep posting, if you have any advice or information to share.

#18 Hmm, well, I can't say I've had any problems yet.

Advice? Keep expenses small (or non-existant if possible) and come up with ONE good, inexpensive product. Then you're well on your way :)

--Nick
www.goldbullet.com

#19 Hi,

I would just like to add that starting a company before your game is finished isn't neccesarily a bad thing. A company can really prove useful if you have a team working on a game and you want to secure ownership of the created materials. Having a company that owns the game and related work is one way to make your life easier.

Regards,

Thijs

#20 Thanks for that info.

I see what you mean to, for everything needs and must be protected these days. I'd hate to have my work stolen and claimed by someone else. All they'd have to do is then copyright it, and say they had it first.(sort of)

For now, I'm currently making freeware and distributing it on a site.(site not complete) I figure this is just a good idea to start out with, and then later start a company.

Thanks for all the advice and info.

I'm always interested in more information, as legal and company matters are always a concern.