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EXECUTION Building a video games business from scratch

Discussion in 'Progress/Execution Threads' started by srodrigo, Jan 9, 2019.

  1. splok
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    splok Silver Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    Look into "work-for-hire" instead of freelancing. Wfh contracts are probably the most common way that game studios earn money really. You're probably not going to find reasonable contracts via freelancing sites though. It's more about networking and having a reasonable portfolio to prove you can actually complete things. Being a single person limits the range of projects you can take on of course, but they're out there, though for most things that a single person could do, a studio would probably prefer to just hire you as a normal employee. However, nothing is stopping you from making friends with devs in other disciplines who agree to cooperate for projects if the right contract comes along. This is probably how most successful studios actually start.
     
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  2. srodrigo
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    srodrigo Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Just to make sure I understand the difference between "work-for-hire" and freelancing, is it about not owning vs owning the copyright of the work done? That's what I've understood after some googling, as I'm not used to the term "work-for-hire" (maybe it's similar to UK contractors?). Does the amount or the length of the work matter?

    I agree that freelancing sites are not great for this (I'd say, for programming in general). Networking and getting people contacting you is how some game devs I've read about found their best gigs. I definitely have in mind that I need to build a portfolio first, so I'm focused on that for now. Build something interesting, and people might contact you to hire you. That's worked well in the past. That's why I like the idea of more smaller projects, as you suggested on your first post. Working on a game for X years, you can show stuff, but that's not complete work.
     
  3. Vaughn
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    Vaughn Contributor Read Millionaire Fastlane

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    Interesting thread. As I worked as a marketing manager for a mobile games company, let me add my 2 cents:

    First of all, I think your estimations about earnings on mobile are not accurate. Of course, it depends heavily on the kind of game you develop and its quality, but it is absolutey possible to make a living from mobile games, even without a company of thousands behind you.

    The company I worked for started with 3 people and had 50 employees at its peak. We had one successful game, one of those freemium MMO strategy games. The game has about 100,000 MAUs, so not really much, but it makes around 1,000,000 EUR a month.
    And the game really is not a high end top quality product. Graphics are shitty, basically static jpgs/pngs with almost no animations going on. But it has some very unique features that keep players engaged. The key to its success is the loyal community. Many players stay with the game for 5+ years (that is an eternity in the mobile world), and some of them spend amounts equal to a medium-sized car for in-app purchases.

    But even if you do not make an MMO (which needs a backend, 24/7 maintenance and customer support, etc.), you can be successful. Remember the asian guy who developer "Flappy Bird"? Arcade game, pixel graphics, really simple gameplay, but highly addictive. He made up to 50,000 USD per day just by showing ads in the game. And he did not spend one buck on marketing, his success was completely viraly.

    Of course, these examples are not what is normal. But they proove what is possible.
    In my opinion, mobile has some big advantages over desktop:

    - Bigger audiences. Hundreds of millions of people, especially in Asia (and Asians are crazy about games) do not own computers or have no access to (landline) internet. But they own phones and have access to mobile networks. And their numbers will grow for years, unlike the number of computer owners will.

    - Marketing on mobile is easier. App Store Optimization (ASO = keyword research + conversion rate optimization) is free and if you do it in a smart way, you can create a steady stream of downloads without spending a dime. In addition, user acquisition costs as little as $0.50 per download in emerging marketings and around $3-5 in developed countries. Also, you can easily create a community if you implement social features into your app (something that I have not seen in desktop games to this extent) and benefit from viral marketing.

    - Free to play / freemium games have higher revenue potential. I understand if people say they do not like the micro transaction stuff. But that is the way to make money, given you do not have AAA-titles. An indie game on steam will make you about $10 - $20 USD per user, if it is of decent quality. And people will be hesitant to buy it because they can not test it upfront. Free to play games allow users to test, and if people like it, they will be more likely to spend money on it. And good games can create lifetime-ARPU of way more than $20. Besides you can generate extra cash from non-paying users with ads, or with offerwalls (they download an app from a list, you earn ad money, and users get a share of this money in in-app currency).

    For those reasons, I would recommend to reconsider mobile games. I would go for it if I had programming skills.
    By the way, depending on the technologies you use, it can be possible to create cross platform games, that work on mobile as well as on web browser with only small adjustments. Might be a smart approach as well.
    Feel free to reach out if you have further questions about the mobile games market.
     
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  4. srodrigo
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    srodrigo Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    That's interesting. The numbers I made a few months ago were about just Ads, not microtransactions. I based them in things like the first answer on this post https://www.quora.com/How-many-downloads-does-a-mobile-game-need-to-be-successful

    Now let's say we have 2 active million users per month.

    This gives us 200,000 advert clicks per month.

    Lets say the average cost per tap (the amount you get paid for a user tapping on an advert) is 2p. We base the cost off actual taps as some advert systems do not pay for impressions.

    So this gives us 200,000 taps * 2p = £4,000 per month.


    I'm not sure that's accurate though, but as an idea. Do those numbers make any sense to you? If so, we'd need about half a million downloads to live of Ads at £1,000 per month (which is not even the minimum wage in the UK).

    For microtransactions, I found this:
    Mobile Apps' Average Revenue per User Benchmarks for Q1 2018 - Marketing Charts

    Globally, the report reveals that combined in-app purchases and in-app advertising revenue totaled $1.70 per user over the 90-day period of analysis

    So, $1.70/3 per month, which equates to $0.57 per user. We need to subtract a 30%, so the remaining revenue is about $0.40 per user per month. If we want $1.000 monthly revenue, that's about 2500 users needed. I wonder though if that average is realistic, as I doubt a game with 2500 users would even be visible on the stores.

    The MMO example you put is interesting, at least it was making 10x compared the MAU.

    The Flappy Bird example is an outlier. I wouldn't even consider the game to be any good or fun, but regardless of that, it was released in a complete different moment, with a far less saturated market. And the game just went viral after some time, for apparently no reason. Sounds like a lottery ticket to me. I would say that game wouldn't have any success today. People often talk about Flappy Bird and Minecraft, as if they were the same case, and they are outliers but miles away in both quality and deliberate work to make the game great and build a community.

    About user acquisition, you say user acquisition costs as little as $0.50 per download in emerging marketings and around $3-5 in developed countries. If that's accurate, given the average monthly revenue per user is around $0.57, you need the game running and making money for over 6 months to just break even. Are you sure that ASO can bring enough users for free? In 2016, there were 500 new games released to the Apple Store PER DAY Over 500 games now submitted to iOS App Store every day
    I imagine that's increased in the last 2 years. Is the ASO on those stores good enough to bring your game to your user's eyes? We are talking about Steam games getting buried, and there are "only" about 25 games released per day.

    You can also make your paid game testable by releasing a demo. If people don't bother downloading a free demo to try a game they are supposed to be interested in, I doubt they will play the same game for long even if it was for free.

    Maybe I'm getting the wrong impression, but the combination of games designed to hook players with addiction problems (instead of adding value by making a good game), the expensive user acquisition, and the extremely over-crowded stores, makes me very reluctant.
     
  5. splok
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    splok Silver Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    The "work-for-hire" terminology comes from the typical IP assignment contract clause that the company would use for hiring external parties. From Wiki:
    The difference is mostly just the terminology, since I can't imagine any IP-oriented company would sign a contract without very clear IP assignment.

    That depends on what you're trying to get paid to do. Someone who makes character models doesn't need a portfolio with entire games. You basically just need to show that you can do (or already have done) the specific thing that you're pursuing.

    First, did you read the actual study or just the article about another article about the study? Not trying to be snarky, but many "studies" are crap to start with, and every layer between you and the real study just takes it farther and farther from reality. Until you've read and the source material and agreed that its methods are both sound and relevant, then you should assume that the article writer is literally just making things up (which is often the case).

    Second, even assuming that the numbers are good, there are BIG problems with this comparison:
    You're comparing ad revenue to microtransaction revenue.
    You're comparing "average" revenue to a successful MMO.
    You're comparing your potential game to both a successful MMO and the "average" game.

    But even disregarding that, is it surprising that a successful game makes 10x the average? The average is only as high as it is because the top few games are pulling that number way, WAY up. The median revenue on the app store is probably $0.

    Also, keep in mind that you're not making the "average" game. What's the average of Clash of Clans, Candy Crush, and Monument Valley? You're making a specific game with a (hopefully) specific target audience. Different kinds of people play different kinds of games. The different groups are different sizes, have different ways of finding games, react differently to marketing, will cost different amounts to attract, will behave differently once attracted, etc. etc.

    You need to be able to be profitable with your game and the types of people who play games like it. Average data is useless for this.

    The only reasonable answer is that you need to be able to supply your own players. Any organic users should be considered icing on the cake.

    What % of apps on the top grossing lists have a demo?

    Mobile is just a platform. You want to build something and get it in the hands of people who value it enough that they'll pay you enough money for the building to have been worthwhile. Will that be easier on other platforms? Depends on your game and its audience. Do you know what the cost of user acquisition will be on each platform for your specific users? At the very least, that's one metric that you can test for before building your game.
     
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  6. srodrigo
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    srodrigo Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Thanks, now it's more clear.

    Good point, I read the man-in-the-middle, not the original source. Will do ;)

    I was more thinking about console games, where is more common. I haven't measured the % though, but I'll have a look on both consoles and PC.

    You're right about researching and measuring the specifics of the niche, not average data. I'll keep that in mind :)
     
  7. Vaughn
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    Vaughn Contributor Read Millionaire Fastlane

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    Regarding ARPU:
    First of all, AppsFlyer (the company that delivered the ARPU study), bases their findings on their own data. They are a tracking provider and gather their data from apps, that have their SDK implemented. That means, publishers need to choose their service willingly, and the data is not a reflection of the entire industry. In this context, it is important to know, that AppsFlyer is a Newcomer. Competitors like TUNE or Adjust are in the market way longer. In the last years, AppsFlyer ran a very aggressive marketing campaign. To gain new customers, they offered their services for free. As a result, their SDK is implemented in about 70% of all apps, but most of them are indie apps or owned by start-ups. Many successful apps (and I know some employees who manage those apps) work with competitors. So AppsFlyer data reflects rather the lower end of the success ladder, and I do not consider their findings an accurate reflection of the market.
    Besides that, average data is never a good indicator. ARPU differs massively from country to country. Many apps are simply crap. Many set stupid pricepoints (f.e. there is no point in creating a premium currency package of $0.99, because the majority of buyers would also purchase more expensive packages).
    So if you aim to create the next average connect-3 game for India and Pakistan, you will have a hard time making money, for sure. But if you create a quality app with a quality product page, if you target the right markets with proper translations, if your IAPs add value without being pay-to-win, if you show the right ads at the right time, then it will be no problem to outperform the average numbers.
    Of course, the number of organic users will be low for the start. But with proper ASO, additional marketing measures (especially social media marketing and PR), you can create a steady stream of downloads.

    Regarding ASO:
    Creating visibility even for new games on iTunes or Google Play is absolutely possible. It is not easy though, because the algorithms are very complex. But if you invest the time learning about it, you will probably make it better than 90% of your competitors. By the way, I am currently writing a book about this topic. So if someone is interested, I will let you know as soon as it is ready for publishing. Maybe we can figure out a discount or a free chapter ;-)

    Regarding Ad Revenues:
    Honestly, I do not see much truth in your example. Click conversion is typically calculated based on impressions, and the assumption, that 2 million MAU create only 2 million impressions is... well, let's call it "debatable". So the first assumption already is not realistic.
    Ad revenue depends strongly on the price model but also on the ad format. Video (and in particular incentivized video) creates better conversion rates than interstitials and interstitials outperform smaller banners. CPC is rather unusual for mobile apps. Most campaigns I ran, were CPI or in some cases CPM.
    Typically, we saw eCPMs around $10 (for industrial countries). And we did so, although we blocked direct competitors from the strategy genre, who tend to be the high spenders in advertising, from running ads in our games.

    Regarding Demos for Paid Apps:
    I don't know one single example for this approach. For apps, the common way is to publish a free app and offer additional levels as an IAP.

    Last but not least, I think the claim that freemium apps target players with addiction problems is over the top. Sure, there might be some people, who do have problems with their spending behavior. But it is only a very small portion. Most people spend money because the purchased goods add value to their experience. Actually, I was surprised that many players of our games had very strict limits (like XX EUR within 4 weeks) and stick to them consequently.
    I consider the freemium model to be fairer than paid apps, because players can decide for themselves how much money the game is worth to them.
    Besides that, PC and console games also can cause addictive behavior. If you want to be 100% sure to avoid harming someone and focus totally on value, the safe way might be to write a book instead of programming a game ;-)
     
  8. srodrigo
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    srodrigo Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    It's pretty clear that you have experience on the topic. Thanks for the valuable information. I'm basing my opinions on either other people's experience, or data from the wild, which can indeed be inaccurate.

    I'm not sure we are talking about the same thing regarding to demos. I meant demos of console games or PC games, and there are plenty there from both big companies and indies. In case you meant mobile apps or games, then I agree that's not a common thing.

    I'll keep my door open to mobile games, although I want to carry on for a while with what I started and see whether it gets traction.
     
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  9. NovaAria
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    Thank you, Vaughn, for the insights. This is extremely interesting.

    I am studying the market as am planning to work on a gacha game soon. Consider me interested in your coming book.
     
    Last edited: Feb 7, 2019
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  10. srodrigo
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    srodrigo Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    An article about what @Vaughn and @splok explained about average mobile games data: A bunch of average app revenue data… and why you should ignore it

    Thinking about this, I guess this applies to any market. If you take the average money that e-commerce websites make, Amazon will be an outlier that increases the average, whereas your one-person e-shop will probably miles away from that average, so you need to compare yours with similar ones.
     
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  11. splok
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    Here's the key takeaway from that article imo:

    And that was a couple of years ago, so it's likely gotten worse since then.
    It's also interesting (though not unexpected) how quickly the rev curve falls off. The #1 game makes 23x more than the #4 and 45x more than #10. I'm sure someone keeps a complete chart updated somewhere. Would be a nice dose of reality for anyone with an app idea to see how well their app would need to do to make it worthwhile. I' bet that most people's expectations are WAY off.
     
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  12. Vaughn
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    Vaughn Contributor Read Millionaire Fastlane

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    I agree that people might have wrong expectations. Nevertheless, I would not give too much about the numbers in the article, because they are all estimates. Only the app owners know the real numbers.
    But even if they were accurate, I would not consider them discouraging. No developer's goal is to create an average app, so the median revenue is no relevant benchmark. Besides, the article does not take ad revenue into consideration, which is the only source of revenue for many apps.
    Still, I believe it is absolutely possible to create a mobile game that makes decent money, even without a big team behind you.
     
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  13. srodrigo
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    srodrigo Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Weekly update week 5

    11.28 pomodoros per day avg., 7 days. I slowed down a bit, although Game 1 didn't have su much work left so I had some time for other stuff. Also, today took my first day "off" today in 3 weeks :)

    Game 1 was released on two stores, kind of soft launch, although the game itself fits perfectly there. I'll probably release it on Steam as well, but want to see what's the reception first. One sale so far, by a friend, lol.

    Testers gave me really good feedback, specially to improve the UI of the game screen. There weren't important bugs (just one weird crash hard to reproduce), but it's a small game, so it's expected not to require a lot of bugfixing.

    Haven't decided about Game 2 yet. I'll probably take a week to prototype some candidates, fix any bugs that araise on Game 1, and look at releasing it to other suitable stores.

    Game 1 played it's role to give me an idea of what's the whole process of making and releasing a game. The release stuff took much longer than expected (open accounts, fill in tax stuff, prepare images, videos, create landing page, etc.), which is good to know.

    Thinking about what's been mentioned above regarding to mobile games. I'll try to come up with at least one game I could make quickly to test the battlefield.

    Bought a Pico-8 as a gift for myself for these last (a bit stressful) few weeks and for releasing my first game (which takes me from action faker into action taker :)). Also, I might use it for prototyping new games if the development workflow is fast there. I've spent part of my day off playing with it.

    Got a cool idea from a random guy on a forum, not for making a game, but a shovel ;) I might evaluate it, although I can imagine it would take pretty long to build, but would give a new dimension to fantasy consoles and the community around them.
     
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  14. srodrigo
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    srodrigo Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    I need to work on getting more exposure. I'd really like to participate in some short game jams, for building more portfolio (ideally, you finish a game) and getting exposure. This would take some time (and worse, energy) from making commercial games, but has some advantages like the ones mentioned, and also being a good source of potential ideas. Unfortunately, one of the most important ones (Ludum Dare) will be on April, but I might try with one of those that last for two days in the meantime.

    I also plan to create some content that can be valuable to other people, like tutorials or more blog posts. I've noticed I got more followers when I published something that added value. Not surprising :)
     
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  15. MHP368
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    MHP368 Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER

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    How are you choosing what genre and game mechanics to use?, are you doing market research beforehand? even if not I imagine they have associated sub reddits and other message boards for whatever it is you're cooking up. Its not spam if you have a legitimate offering in the orbit of what the message boards focus is.
     
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  16. srodrigo
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    srodrigo Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Sort of. I have a look at what's (apparently) on demand, but you have to apply some imagination to come up with a game idea. Otherwise, we all would be making metroidvanias forever.
     
  17. OverByte
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    OverByte Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER

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    Interested to see how your progress goes. I noticed two things from your original post. 1 - you seemed to imply you are doing everything yourself - programming, graphics, design, marketing... and 2 - that you felt progress is too slow.

    I actually built a game a few years ago for mobile and figured I'd give my two cents on lessons learned since I had a similar attitude to the above. The main takeaway was play to your strengths and outsource your weaknesses. There is a ton of competition for the same audience who all have limited attention and some of what is out there is very high quality and free. If you think you can compete with what is already available to customers as a sole developer all I can say is good luck.

    If I had stuck to my core competencies - programming - and outsource some of the graphics, animation, modelling instead of learning how to do all of this and then doing it much more poorly than someone from Fiverr. I'm glad that I got some base understanding of how the various tooling worked but it was a real eye opener to me once I started outsourcing some of this.

    Take this image which became my play store banner. I spent hours trying to make this and then finally outsourced it on Fiverr and paid $25. Even if I had the same skills to make this it would have taken me hours.
    [​IMG]

    Similarly I implemented my own path finding system instead of spending $99 for the top one on Unity. I felt like the game would only work if I custom built this piece. Completely false, I should have been more resourceful and found a way to use existing libraries to make it work. This would have again saved a ton of time.

    Anyway I think you get the point. I've since moved on from games but sincerely hope you do well. If you or anyone else is interested PM me and I'll send you the link to the full retrospective I did after I released the game which contains some other lessons.
     
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  18. srodrigo
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    srodrigo Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    EDIT: Empty response, I hit the wrong button :)

    Thanks for sharing your experience. I've changed my mind since and now I'm pretty much focused on programming, design and maybe marketing. I did make my own graphics for Game 1, but they were so simple (two 8-bit sprites) that it would have costed me more time to outsource it. I also picked free sounds from a website, and they were good and took me 0 minutes to make. And for more complex games where graphics matter more, I'm going to either get stock assets (which can be purchased for cheap, or even free, and some have really good quality), or outsource it. I think this is a good approach, I can focus on making/designing/coding the game.

    At the end, I think it's a compromise between the time it would take you to make X, and the time it would take you to research for and existing implementation/asset/etc., the cost (and translate that to time somehow), plus the time to direct someone in case you outsource it. Experience should help deciding what path is worth in every case. But I definitely agree that focusing on your strengths is the approach most people take, although some basic understanding is useful and necessary.

    I'm interested in that link, I'll PM you ;)
     
    Last edited: Feb 11, 2019
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  19. srodrigo
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    srodrigo Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    I can't find this bit, but maybe was about making graphics.

    What I feel slow about sometimes is coming up with ideas that I can make. I have a lot of ideas, but they all are too big for less than 3 months (my sort of current limit). Finding something simple that doesn't feel like ripping some other game off and looks modern is what takes some time. I'll work on this to have a better pool of ideas ready, so as soon as I finish one game, I can start with another one.

    The above is one of the reasons I might get into mobile games. Some kind of mobile games tend to be simpler than most PC games and people still play them, which is great for single devs or small teams. And I also feel like mobile users are easier about developers iterating (releasing early and making constant improvements) than PC users (where releasing on Early Access can be very counterproductive if your game is not ready). I was playing around yesterday with my Pico-8 to prototype a candidate for a mobile game. I'll carry on with that today.

    More technical, but by any chance, does anyone have experience with engines/frameworks to make mobile games? I'm trying to stay away from Unity, as there are too many things I dislike, but they provide (or say so) integration with mobile app stores (IAP, ads, etc.) and releasing the games (building the executables) seems straightforward too. This convenience alone could be a reason to give it a try. I'm interested in Godot, but you need to do some stuff (although it looks like only once) to get integration with these services. I could give my current tool (MonoGame) a try for mobile, I saw some open source libraries to integrate these services, and don't seem to require any recompiling as Godot does for its templates, although I wonder whether I'll hit any roadblocks, as it's a framework more focused on PC and console.
    I might just spend one or two days trying this out with different tools, but any previous experience sharing would be appreciated.
     
  20. Vaughn
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    Vaughn Contributor Read Millionaire Fastlane

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    I have never programmed myself, so I cannot share first-hand experiences. But the devs at the mobile companies I worked for, told me that it is easier to build cross-platform games with Unity than with native technologies. So they were able to adapt games for iOS, Android and Web. Also, the unity asset store offers a great variety of assets incl. IAP-systems, graphic templates for 2D and 3D, etc. Might be worth a look:
    Unity Asset Store - The Best Assets for Game Making
     
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  21. splok
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    splok Silver Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    Not to say that it can't help, but be aware that exposure to other developers (especially aspiring developers) isn't the same as exposure to customers. Sure, developers may also play/buy games, but would the time and effort be better spent addressing your target market directly?
     
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  22. srodrigo
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    srodrigo Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    I'm pretty sure there is some press keeping an eye on the big game jams. I'll double check though.

    Getting exposure to other developers is part of my strategy to open the door to work-for-hire, as most and the best gigs come from contacts.
     
  23. OverByte
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    OverByte Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER

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    What are the dislikes for Unity? This is what I used to develop the game I mentioned and I was pretty impressed with the tool. It's got a lot going on at first but pretty intuitive once you get into it. It also has a ton of assets and the community is very large (I'd guess the largest of any game engine). I think I had one or two minor platform issues that had to be addressed with OS specific code, 99.9% worked flawlessly across platforms (iOS & Android) and you can write code in C# which is a nice language to use IMO.
     
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  24. luniac
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    luniac Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    i use unity for mobile games.
     
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  25. minivanman
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    minivanman Gold Contributor Speedway Pass

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    I just thought of something, my grandson built a video game business from scratch. 8 years ago when he got here he had 0 video games worth $0. Now he has 100,000 video games worth probably $1 million. lol I think all the kids are way ahead of us. :)
     
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