Tech

The Real World Of The Indie Dev Business

Posted by Mark Alexander on 21 August 2015

While I admit that making games for a living with GameMaker: Studio is a fun and interesting way to spend your time, there is unfortunately a large amount of paperwork and legal stuff that has to be done too otherwise you'll face problems later on down the line - like not getting paid! This doesn't get talked about much, so, in this article I'm just going to touch on some of the things that you really should have done if you want to be a "proper" dev and not get into trouble when you finally poke your head out from behind the monitor.

Note that as a UK citizen this advice is written from a UK perspective, but I'll try to keep things as general as possible and I'm pretty sure that you'll have to do the same stuff no matter what country you live in... although some things may be easier/harder depending on your location!

Set Up A (Real) Company

Most indie devs assign themselves a "company" name at some point. Some people think this is ridiculous and just ego-inflating since as a legal entity it doesn't exist, but personally I see no problems with doing such a thing to start with. It gives a sense of identity to your products and creates brand recognition in your user base... however, at some point - and I should stress that it's better to do it sooner rather than later - you will have to actually create a legal entity and register it for tax purposes.


Tax is a bad word in most cultures, but it's as unavoidable as death (badoom-tish!) and you need to face the fact that if your games start to make money, you're going to have to pay taxes on them. Being a company makes this easier and also helps keep your own personal finances separate from the gaming side, which is important should something ever go pear-shaped - which it won't of course, because you'll have followed this guide. In the UK setting up your own company is actually really easy, and the UK Government has an online form that will take you through it all. I'm pretty sure that most European countries have such a method so investigate and see how it works where you live, but don't put it off till the last minute!

Note: Before getting all excited for your proposed business name, make sure you can use it and that noone else is! In the UK you can do this for free here: https://www.gov.uk/government/organisations/companies-house

There is a downside to creating your own company, and that's the fact that it will certainly increase the amount of paperwork you have to do to start with, but the benefits far outweigh this extra time required -  for example, as a registered business you can get free software from Microsoft via BizSpark, and in the UK you get free courses and other things via the Business Gateway.

Get A Company Bank Account

Once you've set up your shiny new company, you need to get yourself a company bank account. As mentioned above, keeping your private finances separate from your business ones is very important and so once registered as a legal entity you can take a walk to the bank and speak to them about setting up an account only for the business side of things. Most banks will be only too happy to help, although you should look around and see what different banks offer for small business as some have special interest rates or offer free overdrafts and things. This will also probably entail that you read through and sign a stack of paperwork too, but you'll have to bite the bullet and get on with it!

Couple of things worth noting here... Most bancks will probably ask you to provide some form of business plan to prove that you are serious about your intentions, and a few may even require you to provide a letter from an accountant. This letter is simply to say that they've checked over your finances and forecasts and that everything is looking good and legitimate. Which leads us on to...

Get An Accountant

This piece of advice is something some people will debate, saying that an accountant is a waste of money and that you can do all the tax and stuff yourself. And they're right, BUT you're a game dev, not a white-collar worker! You spend your time in a dark room drinking Monster and making cool things that explode! You don't want to spend have your life working out what the hell all these forms mean and where to find the form 27B-6 that you need to fill out.

Okay, maybe that's a slight exaggeration, but in all seriousness, if your games start to make you a steady income you'll want to consider an accountant. Finances paperwork is complex, boring and very easy to get wrong, and in my honest opinion it is 100% worth the money you spend on a accountant to take that weight off your shoulders.


I would also recommend that you set up a spreadsheet and keep track of your finances with it, noting what money comes in and what money goes out every day. This should contain every transaction that you do within your company and will make your accountants life easier later as you can then present it to them at the end of each month. You can even add extra columns to explain exactly what each purchase was to make it easier to spot those that are tax-deductible. There really is no excuse not to do this - other than it's boring, but that doesn't count - and it will help keep your feet on the ground and not over-spend. Note that in the UK you must keep all paperwork for your transactions for at least six years, so keep emails, invoices, and spreadsheets, etc... backed up in a safe place.

Working With Others

If you are working with a team, then they would all fall under the company banner and should be listed as members legally, with contracts and a wage or a clear delimitation of what they should be receiving. You may need a lawyer for this, but we'll discuss that later... If you decide to hire freelancers however, then it's slightly different.


To start with, you should have some document that makes it clear exactly what they are being hired for, detailing the work required, the time it should be completed in and the payment they are to receive. In general you should never pay the full fee upfront for any assets, but it is perfectly reasonable for the freelancer to request half up-front with the other half to be paid on receipt. If you are wanting to keep the assets as your own once the job is finished, you will also have to have some type of release form. A release form is simply a waiver that the person creating the assets signs to say that they are releasing their work to you to use and that they will have no further claim on it. This isn't always necessary and can often be negotiated with the content creator, but keep in mind that you don't want to publish a game and then find that the music or art has also be used in 5 other games since the person that made it has since sold it to other companies! If in doubt, consult a lawyer... Talking of which...

Lawyers

If you are getting into the mainstream with your game, or have had any dodgy emails from some other company or entity which worry you (it happens!), then you are going to need a lawyer. The same can be said if your company needs to hire a freelancer or you have formed a team to work with, as you'll need to write contracts and they need to be legal. Even as a small dev who is just starting you should scout out legal services in your area or online and keep them handy "just in case" as you never know when you're going to get a call from someone else’s lawyers for some reason.

Check out this slide show for some very good reasons why you should have legal aid as a game dev...

In the UK (and Europe in general) the "go to" legal firms are almost certainly Alex Tutty at Sheridans and Jas Purwall at Purewall & Partners LLP. Both these companies have a proven track record with indie devs and an excellent reputation. Jas Purwall also maintains a "Gamer Law" blog where he posts fascinating articles and insights into what's happening currently within the interactive entertainment industry.

Third Party Contracts

If your game is being marketed or published by a third party, or you are signing on to a new platform (like Xbox or PlayStation), then you will almost certainly have to sign some form of legal contract. This also means that you will have to READ IT. Yes, every word of that bazillion page document needs to be read and understood before you sign along the dotted line, and if you don't understand what you are signing or have the least suspicion that something is not right then get to your lawyer and have them check it over. Most big companies will have a standard contract that hundreds of other devs have signed previously, so a quick search online for any complaints or issues should help you out there - as people are generally pretty vocal when it comes to these things - but for smaller companies or those with a smaller online footprint it always pays to be cautious and sure before signing.

Invoices

One final thing to keep in mind is to invoice everything. Your accountant will thank you, the companies you deal with will thank you, and you'll be keeping everything clear and legal. Make a template to use and make sure it has all your details - company name, company address, fields for the date and invoice number as well as your local tax registration number - and then all you have to do is fill in the parts relevant to each transaction. It's more paperwork for you to push when you could be making some trippy neo-hippy art game, but the few minutes you take to do it correctly could save you hundreds of hours in the long term.

To Sum Up

If all that sounds boring it's because it is... But it's essential to make sure that you do things correctly right from the start, otherwise you're setting yourself up for problems later. Obviously you don't have to do everything listed above at the same time and you can take it a step at the time as your company grows and makes bigger and better games, but you shouldn't ever neglect the formal side of the gaming business if you want to survive with your house and life intact. Hopefully by following this basic guide it'll help you get to that stage where you can hire someone else to worry about all the paperwork, crack open another can of monster and retreat once again to your gamedev cave to make awesome games...

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