Your Game Company: Critical Success Factors

The Critical Success Factors (CSFs) are those business aspects of utmost importance for your company survival. They must be considered on every single decision of the company, and if you fail on one of them for too long your business will fail.

CSFs always come in a number of 3, regardless the kind and size of the business. This is an arbitrary number small enough to force you to find and synthesize the very basic needs of your business, and large enough to allow for complex strategy considerations.

What are the most common CSFs?

A generic set of CSFs for most business would be:

• New product development;
• Good distribution;
• Effective advertising;

If any company doesn’t have some degree on those 3 it’s dead right? So why bother? Well, you could use them, but markets always have their own particularities that this generic set might not truly reflected.

What kind of company have a different set of CSFs?

For example, consider corporate attorney firms. Those firms are dealing with clients worth millions, perhaps billions of dollars. They certainly need good advertising (almost always by word-of-a-mouth) and distribution (prospecting potential clients), but the CSFs would be better represented by this set:

• Solidity
• Secrecy
• Trust

Solidity is the first factor: every aspect of the company must be (or at least look like) rock-solid – the office, the clothing, even the graphic design of papers must be very corporative and classicaly designed. Secrecy means details of clients must never leak, and media scandals will end the career of all partners and employees. Trust is the last and most important CSF, and it’s also the most difficult to tackle. Only a “battle-proved” portfolio and back history can truly increase Trust, and that’s why new firms are only founded when the partners bring clients they already have from a previous job.

What about a game development company?

Typically, the CSFs for a gamedev house are:

• Talent (Human resources)
• Capital
• Distribution channels

Talent is the most important factor. As of any software piece, games are a kind of product that demands an intensive intellectual/creative process, for an extended period of time. Without the right people and the right talent, you can’t go – period. So you must invest on finding those people, training them and keeping them excited about your company and your projects.

Capital is key for almost all gamedev houses. For start-ups or big actors, the capital need is of great importance to fund the very extended development and releasing period before any cash from sales arrives at the bank accounts. Hence it’s wise for a game studio to ensure investment streams to compete the project way before beginning the development.

However, there are cases of small studios and indie developers that operates with very few or no capital, and still pull out great games. For those companies, it is likely “Community & PR” would be a more important critical success factor to win with very few money.

Distribution is the last CSF. Final copies are cheap but development to get there is very expensive, so the company has to sell as many copies possible to reach break-even (paying investment). But as a non-essential, non-functional, emotional-appealing product, games need a distribution network that can also allow for impulsive-buying. Placing the box or the game banner at the right place, at the right time, is a form of art itself.

Further reading

For further research on CSFs evaluation techniques, check out this excellent resource. Also, check out these books of Talent Management, Capital Attraction and Digital Distribution.