Many indie game projects start out as fun side pursuits among a small group of friends. Often at the start there is an idea, a concept, some talent, and motivation. A lot of projects, along the way, fall short in one or more of those areas — the idea isn’t as cool as it first sounded; the concept doesn’t work as well as expected; the talent to achieve the goal is lacking; or some folks just lose their motivation and the project fizzles out.
If things work out and you have a reasonably good mix of those elements, you reach something of a milestone: that point when you’re convinced that you can really do it. With Vespers, that occurred sometime after the first year or so of development.
That milestone is usually followed by a period of laboring away at the many tasks and details of the game. Coding, modeling, animating, testing, squashing bugs, coming up with solutions and workarounds to various problems that arise. Slowly and steadily plodding away at all of the different chores. If things continue to work out, you soon come to another understanding: Not only can you do it, but you really are doing it. But with that awareness comes a realization: if you’re truly intent on finishing the job, you’re gonna have to start getting serious about the business side of things.
Therein lies the next milestone: you’re committed enough and far enough along to take the first steps toward creating a business entity.
It’s seems a little silly to me when I think about forming a company, maybe even a little conceited. I mean, really, the truth for most small indie games is that they won’t sell more than a few hundred copies at most. Do you really need to spend time and money forming a company for that? And without a long-term plan for additional games beyond this one, doesn’t that seem a bit excessive?
The answer, actually, is that it does make a lot of sense. Even for a group as small as ours, even for a single game, and even at this (relatively) early stage of development.
Our situation is not unlike that of many small indie groups, and one person with a lot of experience with these groups is Tom Buscaglia, an attorney from Washington known as “The Game Attorney”. Over the years, he’s developed a certain expertise in the legal side of indie game companies, and he’s done a lot to help small groups take the necessary steps to make sure everything they do is in order and legit.
Often, small hobbyist groups like ours make enough progress on their projects to reach a point where they can put a demo together to show interested parties, like a publisher. But as Tom has said, these scenarios are usually full of potential problems that could make it impossible to get the game to the public. Questions raised include things like:
- What legal entity will interested parties deal with?
- Who on the team gets what if the team succeeds?
- Who owns the assets in the game?
- Are there any problems with the assets that would prevent the game from being taken to market?
As Tom says:
“To a publisher (or a lawyer or businessman) how you address these basic questions at the beginning of your project reflects on whether this team is “together” enough to come through with the finished product. The failure to have dealt with the more mundane legal issues of forming a company, deciding shares first and securing Intellectual Property rights to the game assets may be just a lack of business experience. But to business heads like publishers there will be little sympathy.”
A lot of groups don’t want to deal with those things — at least, not until they have to, and by then it’s usually late enough to cause big headaches. So Tom’s advice, of course, is to take care of these things sooner rather than later. Granted, he’s a lawyer with a bias, but it’s pretty sound advice — at least when you’ve reached that second milestone when you’re reasonably certain you’re going to have a product ready in the (relatively) near future.
Forming a company like an LLC has a number of distinct advantages, even at this point in time for our group. It defines who other companies deal with, who owns the assets, and how any royalties are split up. And even if we decide down the road that Vespers is to be released for free, it still helps to ensure that the project and all of its components are in order, and helps to define how we might proceed in the future on any additional projects.
There are also a few other reasons for doing this. For one, it’s much easier (and more professional) to designate the company as the primary, central entity that deals with outside parties — other artists or contributors, publishers, and so on. In many of these cases we would be dealing with things like NDAs and contributor agreements, and it’s a lot better to specify that these agreements are with the company rather than with me personally.
Then there is also the liability issue. By forming a company like an LLC, liability becomes less of an issue for me (or anyone else associated with the company). For instance, if we release the game and later we get sued by someone for copyright infringement, then in the absence of a company then all of my assets are at risk, including my property, house, car, and so on. By forming an LLC, my personal and professional liability are separated, so none of my personal assets would be at risk as a result of some legal action against the company or one of its games.
That said, creating a company also raises more questions. To this point we haven’t really considered ourselves as a “game development company” per se, only as a “Vespers development company” — that is, is there an expectation that we will really function as a company that makes not just one, but perhaps many, games? And if so, how will the company operate? Who’s in charge? Who makes decisions? Who handles different responsibilities? Are there any employees, or just partners? How are those partnerships defined?
Tough questions to answer. I’ll be spending a lot of time in the upcoming months trying my best to answer them. For now, however, I’ll be working on everything necessary to make Orange River Studio, LLC, a real entity.
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