How to start a gaming business: from player to owner

Starting a gaming business is a rewarding venture that blends a passion for gaming with sharp business savvy. The global gaming market is a multi-billion dollar industry, showing consistent demand for new titles and experiences across consoles, PCs, and mobile platforms.

This guide will take you through the practical steps of validating your concept, securing funding, obtaining licenses, and acquiring equipment to help you launch a successful gaming business in the U.S.

Step 1: Validate your business plan and concept

Conduct market research

Before you write a single line of code, test your game idea. Create a simple prototype or pitch document. Share it on forums like Reddit’s r/gamedev or post a devlog on itch.io to gather direct feedback from potential players.

You can also use reports from firms like Newzoo to understand broader market trends and identify which genres are growing. This data shows you where player demand is headed.

Analyze your competition

Look at what similar games are doing. Use platforms like SteamSpy to estimate sales data for PC games or data.ai for mobile analytics. This gives you a benchmark for potential success and pricing strategies.

Many new developers only study huge AAA titles. A better approach is to analyze successful indie games in your niche. Their development and marketing strategies are often more applicable to a new studio.

Estimate your startup costs

With your research done, you can map out your budget. A clear financial picture helps you set realistic funding goals. Initial costs can vary widely based on your game's scope.

• Software: Game engines like Unity have free starting plans. Art tools like the Adobe Suite cost around $60 per month.
• Hardware: A powerful development PC will likely cost between $2,000 and $5,000.
• Business Fees: To form an LLC can range from $100 to $800.
• Marketing: An initial budget of $1,000 to $10,000 helps build early momentum.

A small, solo-developed game might get off the ground for under $5,000. A more complex project with a small team could require $50,000 or more to reach its first release.

Here are 3 immediate steps to take:

• Draft a one-page game design document that outlines your core gameplay loop and unique features.
• Research three successful indie games in your genre using SteamSpy to understand their sales performance.
• Create a simple spreadsheet to track your estimated startup costs for software, hardware, and legal fees.

Step 2: Set up your legal structure and get licensed

Choose a structure and get your permits

Most new game studios should consider forming a Limited Liability Company (LLC). It protects your personal assets if the business incurs debt. A common mistake is to mix personal and business funds; always open a separate bank account to maintain this protection.

You can form an LLC through your state's Secretary of State website. Fees range from $100 to $800, and processing can take a few days to several weeks. An S Corp is another option, but its complex tax rules are better for studios with higher profits.

Once registered, get a free Employer Identification Number (EIN) from the IRS website. It acts as a Social Security number for your business. You will also need a general business license from your city or county, which typically costs between $50 and $150.

While not a government license, plan for an ESRB rating. The Entertainment Software Rating Board provides the age and content ratings seen on games. Digital-only games can often get a rating for free through the IARC questionnaire on most storefronts.

Here are 4 immediate steps to take:

• Decide between an LLC or Sole Proprietorship for your business structure.
• Visit your Secretary of State's website to review the LLC formation process and fees.
• Apply for a free Employer Identification Number (EIN) directly on the IRS website.
• Research the ESRB rating process and find the IARC questionnaire for digital games.

Step 3: Secure your insurance and manage risk

Find the right insurance coverage

Your LLC protects your personal assets, but business insurance protects the company itself. General Liability is the foundation, covering physical risks like property damage. A $1 million policy typically costs between $400 and $700 per year.

You should also get Professional Liability insurance, often called Errors & Omissions (E&O). This covers claims related to your game's performance, such as a critical bug that corrupts player save files. Expect annual premiums from $1,000 to $3,000 for this coverage.

Many new studios think General Liability is enough, but this oversight can be costly. Without E&O, you are financially responsible for damages caused by your software. If you hire employees, you will also need Workers' Compensation insurance, which is required by law in most states.

When you look for a provider, consider insurers that specialize in technology and media, such as Hiscox, The Hartford, or Chubb. They understand the unique risks of software development, like intellectual property infringement claims or data privacy issues, better than a general agent might.

Here are 4 immediate steps to take:

• Request quotes for both General Liability and Professional Liability insurance.
• Compare policies from tech-focused providers like Hiscox and The Hartford.
• Check your state's requirements for Workers' Compensation if you plan to hire.
• Draft a list of potential risks specific to your game, such as data collection or in-game purchases.

Step 4: Set up your location and get equipment

Find your workspace

Most new studios start in a home office, which keeps overhead low. This setup avoids commercial lease commitments and complex zoning permits. If you need a collaborative space, you might consider a co-working office with month-to-month terms. This gives you flexibility as your team grows.

A mistake many make is to sign a long-term lease too early. A one-year commercial lease is a significant financial burden if your project timeline shifts. It is better to stick to flexible options until you have a steady revenue stream.

Acquire your development hardware

Your hardware is a primary investment. While a powerful PC is necessary, you do not need the absolute best to start. A machine in the $2,000 to $5,000 range is more than enough for most indie projects.

Here is a breakdown of what you will likely need:

• Development PC: Focus on a strong CPU and at least 32GB of RAM.
• Monitors: A dual-monitor setup is standard. Expect to pay $200 to $500 per display.
• Testing Devices: Buy used consoles like a PS4 or Xbox One for around $150-$250 to test your game. For mobile, get a few popular mid-range Android and iOS devices.
• Digital Assets: Instead of physical suppliers, your sources will be digital marketplaces like the Unity Asset Store or Unreal Engine Marketplace.

Here are 4 immediate steps to take:

• Compare the cost of a home office setup versus a local co-working space membership.
• Create a budget for your development hardware, including a PC and two monitors.
• Check eBay or Facebook Marketplace for used game consoles for testing purposes.
• Browse the Unity Asset Store to see what art and code assets are available for your project.

Step 5: Set up your payment processing

Handle digital and in-person sales

Most of your revenue will come from digital storefronts. Platforms like Steam, the Apple App Store, and Google Play handle all payment processing for you. They take a standard 30% cut of your sales, which is automatically deducted before you receive your payout.

For direct sales from your own website, you will need a payment gateway. Stripe and PayPal are common choices. Their fees are typically around 2.9% plus $0.30 per transaction. Many developers overlook these fees, which can impact your profit margins on direct sales.

For gaming businesses that need to accept payments on-site or on-the-go, JIM offers a streamlined solution. It is particularly useful for selling merchandise at conventions or collecting tournament entry fees. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone.

Just tap and you are done. At just 1.99% per transaction with no hidden costs or extra hardware needed, its rate is more favorable than the higher commissions other mobile payment providers often charge. This makes JIM a smart choice for managing in-person revenue.

Using it is straightforward:

• Get Started: Download the JIM app for iOS.
• Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
• Access Funds: Your money is available right on your JIM card as soon as the sale is done, with no waiting for bank transfers.

Here are 3 immediate steps to take:

• Review the payment terms and 30% commission rate for the Steam and Apple App Store platforms.
• Compare the transaction fees for Stripe and PayPal for potential direct website sales.
• Download the JIM app to see how it works for in-person payments.

Step 6: Secure your funding and manage finances

Find your funding source

Most indie developers self-fund their first project. This route gives you complete creative control. If you need more capital, publishers like Devolver Digital or Annapurna Interactive offer funding in exchange for a revenue share, which is often around 30-50% after platform fees.

A frequent misstep is to sign a publishing deal without legal review. You might give up more equity or intellectual property rights than you should. Always have a lawyer who understands game development review any contract before you sign.

You can also pursue grants. The Epic MegaGrants program offers awards from $5,000 to $500,000 with no strings attached for projects built with Unreal Engine. The Indie Fund is another option that provides funding to help independent developers finish their games.

Plan your financial runway

Calculate your working capital needs for at least the first six months. For a solo developer, this might be $15,000 to $25,000. A small team of three could require $75,000 or more to cover modest salaries, software, and marketing expenses.

Many studios run out of money before launch because they underestimate their monthly costs. Track every expense to understand your "burn rate." This helps you know exactly how many months of operation your current funds will support. SBA loans are an option, but lenders often want to see a strong business plan and a playable demo.

Here are 4 immediate steps to take:

• Research the application criteria for a grant, such as the Epic MegaGrants program.
• Create a spreadsheet to project your studio's operating costs for six months.
• Review the requirements for an SBA 7(a) loan on the official SBA website.
• Identify three indie-friendly publishers that fit your game's genre.

Step 7: Hire your team and set up operations

Build your core team

For your first project, you might want to use contractors instead of full-time employees. This approach keeps your fixed costs low. Look for talent on platforms like Upwork or ArtStation. A common mistake is hiring a full-time team too early, which can quickly drain your funds.

Here are the key roles and typical freelance rates:

• Programmer: Builds the game mechanics. Expect to pay $60 to $120 per hour for experienced developers.
• 2D/3D Artist: Creates the visual assets. Rates often range from $40 to $90 per hour.
• Sound Designer: Produces music and sound effects. Project-based fees are common here.

Manage your workflow

With a team in place, you need a system to coordinate. Most indie studios use a combination of free or low-cost software. Trello is great for organizing tasks on a simple board. For more complex projects, you might consider Jira. Both are industry standards.

For communication, a private Discord server or a Slack channel works well. You will also need a version control system to manage your code and assets. GitHub is the go-to choice for this. It prevents team members from overwriting each other's work.

As you grow, a good benchmark for efficiency is revenue per employee. Once your game is launched, successful small studios can generate over $200,000 per employee. This metric helps you gauge if your team size is right for your revenue.

Here are 4 immediate steps to take:

• Create a project board on Trello to outline your initial development tasks.
• Set up a private Discord server for your team's communication.
• Browse portfolios on ArtStation to find artists whose style matches your game.
• Create a free account on GitHub to prepare for version control.

Step 8: Market your game and find players

Build your community now

Your marketing should start the day your development does. Create a Steam page immediately to begin collecting wishlists. This is your most important pre-launch metric. A good goal is to get 7,000 to 10,000 wishlists before you launch.

Many developers wait until the game is finished to market it. By then, it is too late. You need to build momentum over 6-12 months. Use a Discord server and subreddits like r/IndieGaming to share updates and get feedback directly from players.

Use organic and paid channels

Create short gameplay clips for TikTok and YouTube Shorts. These platforms can drive massive visibility with zero ad spend. Look at how the developer of Vampire Survivors used simple posts to build a huge following before the game even had a proper name.

For paid ads, you might test small budgets on Reddit. A typical Customer Acquisition Cost (CAC) for mobile games often lands between $2 and $5. For PC games, a better use of funds is getting your game to streamers.

Contact micro-influencers (10k-50k followers) who play games in your niche. Many will cover your game for a free key. For paid promotion, expect rates from $100 to $500 for a dedicated video. This is often more effective than traditional ads.

Here are 4 immediate steps to take:

• Create a Steam page for your game to start collecting wishlists.
• Set up a Discord server and post your first development update.
• Identify five micro-influencers who play games similar to yours.
• Draft a short pitch email to send to content creators.

Step 9: Set your pricing strategy

Select your pricing model

Your pricing model shapes player expectations. Most indie games use a premium (pay-once) model. A price between $15 and $25 is a common sweet spot for a quality PC title. Free-to-play (F2P) with microtransactions is another route, but it requires careful economic design.

A frequent mistake is to price a premium game too low. A $5 price tag can suggest low quality. You might consider a higher price and offer a 10-25% launch discount to build initial sales momentum.

Analyze competitor prices

Once you have a model, research the market. Use a site like SteamDB to see the price history of games in your genre. Look at their launch price and how often they go on sale. This gives you a data-backed range for your own price.

Remember the platform's 30% cut. If your game sells for $20, you receive $14 per copy. This simple calculation is fundamental for your revenue forecasts and helps you understand the value of each sale.

Here are 4 immediate steps to take:

• Decide between a premium or free-to-play model for your game.
• Use SteamDB to research the pricing of three comparable games.
• Calculate your potential revenue per sale after the 30% platform fee.
• Determine a launch discount percentage for your game's first week.

Step 10: Control quality and scale your studio

Establish your quality standards

Your game's stability is a direct reflection of your brand. Use a bug tracker like Jira to categorize issues. A solid launch day target is a crash rate below 1%. Many developers focus only on game-breaking bugs, but small glitches can hurt player reviews just as much.

You can also hire freelance QA testers from platforms like Upwork for $20 to $40 per hour. They provide a fresh perspective and can find problems your team might miss. Use player feedback from Discord and Steam forums to guide your post-launch patches.

Plan your studio's growth

Before you hire your first employee, make sure you have at least six months of their salary and related costs saved. This financial cushion prevents you from making tough decisions if sales are slow to start. Rushing to hire is a frequent misstep that can sink a new studio.

Once your game generates revenue, a good benchmark for a healthy studio is over $200,000 in revenue per employee. This metric helps you know if your team size is right for your income. As you expand, project management software like Asana helps keep complex workflows organized.

Here are 4 immediate steps to take:

• Set up a bug tracking project in Jira to log and prioritize issues.
• Create a dedicated channel in your Discord for player feedback and bug reports.
• Calculate your financial runway to see if you can support a new hire for six months.
• Research freelance QA testers on Upwork to budget for pre-launch testing.

You have the roadmap to launch your gaming business. The most important part is your connection with players, which starts long before release. Stay focused on your vision, listen to your community, and you can build something great. Your adventure starts now.

As you connect with your community, you might sell merch at conventions. For those in-person sales, JIM offers a simple way to accept payments. It turns your phone into a reader for a 1.99% fee, no hardware needed. Download JIM to be ready.