Video games studios and their business models

General / 08 March 2020

Hey there fellow artists !

For those of you who are new, I'm a concept artist working in Lyon, france, where I also organize and animate meetups for indie game devs, you can check it yourself here : https://www.meetup.com/fr-FR/Game-Makers-Lyon 

Lastly I started presenting subjects I am interested into as short classes in my meetups, and I wanted to share my thoughts and make it available to all of you.

While all my slides are in French, I will traduce everything you need to know, so keep on going until the end :)

  Video games studios and their business models

The principle we will be studying today is : Studios business model have an influence on their games' art direction. 

In this presentation we will work by the example, meaning we will be listing video game studios business models based on real word cases. Also I'd like to say that this is only a non exhaustive list of examples.

A word about me : I am a self-taught french concept artist based in Lyon, France
What inspire me the most is to create universes and IPs 

I am also a cute hedgehog here (spiky !)

First of all, let's talk about the studios that have a proprietary technology, 

In "The art of Total War" James Russell explains the difference between content-driven studios and process-driven studios. 

Studios with a propietary technology are definitely Process oriented, they build on top of what they already have.

For example, TellTale always uses the same core gameplay no matter which universe their game take place in.

This kind of studios capitalize as much as possible on what they already know how to do in order to build a franchise, this makes them very safe when compared to other studios, first because they know the exact process they have to go through to make their games, and second because the public knows what kind of game to expect. The bad side here would be creativity, all of their games tend to play the same way.

Examples : TellTale, Creative Assembly (Total War Franchise)...

Then let's talk about studios associated with an editor

It's harder to talk about them, since they have a way broader spectrum of activities. 

From my point of view (better do your own research on top of it !) these studio are usually a few people large (less than 5) and have signe a contract with an editor. Really they can be making any kind of game, 

I see no obvious downside to running this kind of studio, it's as good as it can get. 

Service Providers

This category isn't about studios exactly, in the sense that they're not making their own games : they are helping other studios to make games.

Usually this kind of company is very specialized in a little field : they don't do a lot of different things, but they do it very well, and for all sort of projects.

For example, One pixel brush provides a concept art service, Uko creative provides a trailer directing service for games, and Gfactory provides a game art service.

It is also very common in the video game industry to use this kind of service for Press release via communication agencies.

These studios always work in a lean manufacturing kind of way, allowing them to do better quality of work, faster, and for cheaper, at the cost of diversity.

But they also work as white mark, meaning they are not always credited on the final products.

Casual mobile games studios on the other end focus on making as many full products as they can. Quick and dirty

They are able to deliver finished games with only a bit of polish very fast, which allows them to lower the risk when compared to other companies that only release a game every few years.

On the other hand, they don't have that much control over the success of their game and it can feel a bit like playing lottery.

From my personal experience most of these developpers make most of their living on one of their game that had success pretty much despite them. Take it with a grain of salt though

Examples would be : 8Sec, 111%, Voodoo...

 

"Game as a service" studios

They usually have a single Game that they update often so that their communities can keep playing the game without getting bored.

It's really different than let's say making a game every few years and then going onto the next one, it takes a lot of nurturing and care, but eventually it makes games into giant playgrounds, which is pretty nice.

The bad side of this type of company would be that they need a good community, and it takes a while to grow one.

examples would be : Million Victories, Epic Games, Revolt (Neopolis), Niantic...
  


Studios based on intellectual property (my favs !)

These studios have actual IPs they can use to sell cultural products that are not video games, such as movies and toys, or even comics

It allows them to be safer, since their source of income does not come only from one source, but on the other hand it takes a lot of planning and time that could otherwise be spent on the game.

IPs are a thing by themselves and it's really a different exercise to create a whole fictional universe than to create a video game.

Good examples would be Ankama, Atypique studios (Noara), Riot Games, Rovio


Studios with an expertise outside of video games.

Some studios make video games not as an entertainement but as a way to help other fields and industry such as healthcare or VR. Serious games are getting bigger and bigger as time goes by.

It's hard to talk about these studios as a whole because it really depends on what field they have an expertise in. But from my own experience I can tell that they are the most people-depending studios. It means that they are not process-driven or even experience-driven, but people-driven.


Studios bought by an editor

Usually these studios have been existing for a while before they are bought by an editor

They tend to get bigger and more process-oriented.

An example in Lyon would be Kylotonn.

Indie studios

The experience-driven studios by excellence. They are usually composed of a few very skilled and passionated people, who thrives on making new experiences for players.

It is also one of the most dangerous ways to run a studio, since indie studios don't have a franchise or an IP they can build onto yet, they have to build everything from the ground up and there is no way to be sure that their game will sell.

Studios with more than one business model

Some studios rely on several of the business models we have seen earlier. The most common combo from my experience is a third-party service provider that is also an indie game studio.  

Studios so big they're actually a bunch of studios put together  

Just a disclaimer to tell you that my list is incomplete =) There are a lot of studios business model I did not talk about !
  

And most importantly, all of these studios make a whole ecosystem, and it's not only studios, but also editors, associations, meetups, big events ...

The video game industry is really a lot of actors and every single one of them is unique.
  

Here are my contact infos in case you feel like you have somethinf to tell me =) Enjoy !