The Importance of Cash Flow & Projections in Games

You don't have to be an accountant to look at your cash flow. In fact, you don't even need to have an accountant to look at your cash flow. The business / financing / accounting side of things is an aspect that many indie game development studios struggle with. This isn't surprising, as usually these teams don't have a person dedicated to this kind of stuff. 

But I wanted to discuss cash flow today in conjunction with projections. I'm not a magician, and I can't tell you how much your game, our game, or any game will sell. What I can say, however, especially now that our game has launched, is about how many months we can survive if a) sales stopped today, if b) sales go worse than expected, or if c) sales go well. This is important! This is very important.

Someone on your team, even if you don't have a "business guy", is going to have to know when to start approaching publishers for funding your next game, when to look for investors or government funds, or when to stop working on a feature of a game that "just hasn't taken off yet but it will soon... soon!". Without a crystal ball, you should still know how much money you're spending per month, how much you'll need to be spending in 6 months, and how much revenue you're going to be earning to offset that cost.

If you're working on a passion project, a hobby project, etc. and not expecting to make a business out of it, that's one thing. But, if you're looking to build a sustainable business with revenue and employees, you're going to need to be able to make tough decisions, project-altering decisions even, based on financial constrains (or, let's hope, newfound financial liberties $$$). 

Beyond the balance sheet and the profit / loss report, you should really have a cash flow document. We've only done a proper one recently, and we're a bit late, but it helps us clarify how much time we have to work on features and prepare for the future. Even if it's not 100% set in stone... projections are often way off, but that's okay! It's better to have it and be way off than not to have it at all, because the internet exists and you can now alter documents without having to put them on punch-cards.

Impressions from Boston FIG

Last weekend, at MIT in Boston, was the Boston Festival of Indie Games. The BFIG is a smallish expo that showcases games mostly from the Northeast US and Canada, and is more relaxing version of something like PAX. 

Last year, Clever Endeavour went and had a great time. This year, Richard went down with a couple of the members of Artifact 5, another Montreal game development studio, and recorded his impressions. Below are his opinions, not that of the company.

A Few of the Best Games That I Saw

Anamorphine, the game by Artifact 5, was awesome of course and their new demo was good enough to earn them the prize for best experimental game. I know them well though, so I'm going to talk about games that I hadn't seen before.

Perception was a great looking game where you play as a girl exploring an old, seemingly abandoned house. Not quite horror, the game freaks you out a little bit and gives you clues as to what's going on in the world as you explore it. The graphics were outstanding and the audio was perfect; the creators of the game are mostly ex-Irrational Games people (the ones who made Bioshock) so we can expect great things. 

Inari was a mobile game where you play as a cloaked cat who jumps and bounds off of objects. It's a platformer with a beautiful art style, almost low-poly looking but in 2D. Great colours and depth to the scene backgrounds make it beautiful, and the mechanics are fun though limited. 

Lastly, I really liked Dragon Dad. This game was a bit like 'Dumb Ways to Die' for mobile or Warioware, where it's made up of small quick-time events and has a sarcastic, witty bit of humour between. The game is made by a games lab at a university in Boston and one of the undertones of this game is environmental awareness; some of the mini-games involve sorting recycling from garbage, biking quickly, or closing the fridge. Subtle, but nice messages. 

I didn't play everything, so I'm sorry if I missed you! 

Some Trends That I Noticed

There seemed to be some recurring themes this year, as there have been every year. This year shifted a little bit though, and we saw a lot of the following:

- Local multiplayer, single-mechanic arena games: I have no issue with this, except for the "single-mechanic" part. Many games seemed to be local multiplayer battle games that focused on one very specific thing, without variation. I think that games like Towerfall or Starwhal which focus on one mechanic still have enough variation (types of arrows in Towerfall, level changes in Starwhal) that this keeps things alive beyond what a simple, single-mechanic game could. These games also have extremely deep mechanics that are very difficult to master.

- Survival and crafting: lots of this stuff. Lots and lots and lots. It seems everyone just wants to craft! Except me.

- VR: I found slightly less VR than there was last year for some reason... but it seems that at every show there are many VR games that range from proof-of-concept demos to full games. Unfortunately I didn't see many full games.

So that's all for this week folks, we'll be back next time with some game updates!

Yes Mom, People WATCH People Play Video Games

Written by Richard Atlas - Game Designer, Marketing / PR / Business dude at Clever Endeavour

Okay so first off I'd like to say that my mom actually knows that people watch people play games, because her son is in game development. But replace "mom" with dad, older sibling, cousin, grandma, grandpa, dentist, doctor, car mechanic... anyone really. It seems that people are astonished when I tell them how important YouTube and Twitch are to the success of games nowadays... after I explain to them what Twitch is and how it has more viewership than Hulu or Amazon.

This article is my explanation about why people watch video games, written as the conversations that I've had many times. Feel free to use it to explain the phenomenon to people who aren't in the industry:

---

Random civilian: I just don't understand why people don't have anything better to do than to WATCH people play video games, as if just playing them wasn't lazy enough.

Me: Why do people watch basketball on TV?

Random civilian: Well, I dunno, it's entertaining!

Me: I'd say they watch it because of one of three things.
1) They play basketball as well, and want to get better at it.
2) They want to see the best people in the world perform at their peak and compete.
3) They play, or used to play basketball and they understand and appreciate the intricacies of the sport.

Random civilian: Yes, I agree. 

Me: I would argue that watching someone play video games is quite similar. Watching competitive e-sports is like watching physical sports in all of the same ways. 

Random civilian (who knows a bit more than the usual): But what about people watching someone who is average at games over-reacting to things and putting on a show?

Me: Have you ever seen "Who Wants to be a Millionaire"?

Random civilian: Yes of course.

Me: Isn't that literally taking the most simple trivia game, and putting on a show? Imagine that show, with Jimmy Fallon as the host. People like entertainment, and funny people combined with solid (games) content makes for great entertainment. 

Random civilian: And you're saying that your game, Ultimate Chicken Horse, relies heavily on these people to show the world how entertaining your game is by experiencing it live?

Me: Yes. In fact I'll be writing an article sometime soon with details, but the YouTube views and big videos are directly proportional to our sales.

Random civilian: Wow! It all makes sense now! Thanks magical explanation-man!

---

And that, my friends, is how you should explain to people that yes, people watch people play video games. A lot. Like a ton. When you explain what the heck Twitch.TV is to people, be sure to throw in that they were bought by Amazon for $970 million. Also mention that the top gaming YouTuber, PewDiePie, has more subscribers than anyone else on YouTube, and more than Justin Bieber and One Direction's subscribers (numbers 5 and 7) combined. The top 6 gaming YouTubers combine for over 105M subscribers. Might also want to mention that the League of Legends finals sold out the Staples center in an hour... yes... to watch people play video games.

And that's that! Here's hoping it works in our favour as well :)