In my previous blog post, I outlined the beginning of why I believe game development is not cheap.  In this post, I'm going to reinforce that point by outlining the next set of costs associated with starting a game development studio.  It's worth repeating that with this exercise I am not building just a game, I'm building a company.

Let's start with the baseline costs established in the last post.  $380K is the number we figured for personnel costs.  I'm trying hard to stay under $500K.  We'll see if it can be done given a team size of six.

The first costs you'll need to deal with will have to do with office space.  How much space do you need?  Each employee takes up about 65 square feet for their desk so 400 sq feet is required simply for desk space.  Add in closets, bathrooms, common areas, walkways and a small meeting room and you can get by with about 1000 square feet.  In Louisville, you're looking at $15 per square foot per year on average with a one year commitment.  That would be $15K more cost.  We need to add furniture.  In my searching for furniture, I found that you can get furniture real cheap or it can get real expensive.  At this point, I allotted an amount for each desk based on some of the averages I found on the web.  $700 includes a desk, a chair and some basic supplies.  That's another $4200.  Add in another $800 for common area furniture/supplies and we're off and running for $5K.

So now we have a place to sit; we need to turn on the lights and give these people tools to build our fantastic game.  Let's start with a couple of basic toolsets.  Developers need Visual Studio at the minimum.  We can get this through MSDN licenses @ 2x $1200.  Artists need a 3D package and Photoshop at a minimum.  A bit of research on Maya 2010 leads me to a $3,500; 3DS is similarly priced.  Photoshop is $700 so we'll take two licenses because they're small.  I'll assume that CVS is used for source control or that a similar free source control application is purchased. 

Let's summarize up to this point.
$15K for office space.
$5K for furniture.
$11K for software.

Software doesn't work without computers and computers need power and an Internet connection. We'll assume that all six employees get the same computer.  It makes management easier and it makes our financial model simpler.  Because the next nine months will be spent behind these computers, this is one area where I wouldn't skimp.  Buy a nice computer for each employee.  $2,500 each will get them a nice development machine that they'll be happy to sit behind for those 16 hour days come crunch time.  Nothing makes working long hours worse than fighting with your equipment while you do it.  As for the Internet connection, Insight Communications has business broadband for $140 per month with a 2 year commitment.  We'll even assume that everyone will have a cell phone for making phone calls so that we don't need voice services.  If we need voice, we can always add Vonage or some other VOIP solution on the cheap but it's very possible to get away with no voice or fax services these days; at least in the beginning it is.  Utility bills in Louisville run somewhere around $150 a month for a 1000 sq ft office.  We'll need one server, one consumer class router and one network printer running us $4K, $100 and $500 respectively.  We can pickup Office and Windows 7 with an Action Pack subscription for $300 per year which will get us all the licenses we need for the server and the desktops.

This brings our software, hardware and utilities costs to:
$15K for six PCs.
$3,500 for Internet connectivity.
$1,500 for utilities.
$5K for remaining hardware and software.

All of this added expense creates stuff that needs to be maintained.  We'll add a 10% fudge factor into the budget so that we can handle hardware failures and general maintenance without having to wonder where the money comes from.  My view is that anytime you have to make due with a broken tool, you're not running as productively as you could be.  This leaves our total outlay for nine months of development at: $438.5K

But wait, we're not done.  We still have other considerations which I will cover in the next installment.