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.

Your Game Company: The Core Values

Few of you might know but besides a game producer I’m also a professor of Entrepreneurship and Multimedia Systems at the Computing School of FAESA college. One of the subjects I teach is Business Strategy aimed at Computing business – not at MBA level of details of course, but to give students an extra to start their business right.

So I’d like to share with you what I know about it in a series of “Your Game Company” articles, always focusing on game development companies. I’ll start by the Core Values any company should have.

Core Values

To be able to live together members of social groups must accept a basic core set of values. Those values will provide the group an identity, a sense of belonging, and clear rules that will (or should) guide all activities. Common values of societies around the globe include: competition, religiosity, wealth, respect and honor.

A game company is usually a small social group, but even a tiny group of 2-3 individuals should share a core set of values in order to stick together and remain coherent. In fact, the more people share the same values, the more they are likely to succeed as a team. Hence the need to make clear for everyone, from day 1, what will be the core values of the company. If one disagrees with this very basic set, it would be better to look for another job.

Where do they come from?

From the heart of the company’s leaders. The real core values always come from people heading the group. By defining what the company’s core values are leaders should be wholeheartedly committed and faithful to them. When they do, values pervade every single aspect of the company and propagate naturally across all partners and employees. You can clearly see that on companies like id Software and Bungie.

When leaders aren’t really committed, the “value” will turn into mockery among employees. Such is the case of a company I know which “decided” eco-responsibility would be a “core value” – but kept wasting energy and water on the same old fashion.

Founders and leaders must be honest with themselves what their core values really are!

What could be core values of a game company?

Common ones would be: profitability, art, innovation, cost-leadership, meritocracy, hard work, quality, excellence, competition, cooperation, optimism, resilience, state-of-the-art technology, friendship, punctuality, ethics, creativity, fun, fairness, trust, focus on clients, accountability, integrity, hunger for learning, simplicity, market leadership, experimentation, storytelling, team work, passion, adaptable, empowering people.

How many values do I need?

5 at most, 4 would be better. A small set of values will be easier for people to live by, and you really don’t need more than 5. IBM, big as they are, only needs 3. At Interama, we picked these 4: transparency, meritocracy, market competitiveness and creativity.

What are they good for?

Core values should guide every single decision of all partners and employees, regardless of its magnitude – from big project roadmap drawings, to small, day-to-day operations on buying supplies.

Let’s say company A has a core value of “profitability”. It would draw the project roadmap based on the the profit margin (cost X value to costumers) every feature can add to the final product. Day-to-day buying would be based on how much productivity each one can add – for example, if a more expensive video card will save artists 3 minutes a day, the price difference from the cheaper option will be compared to the amount of money those daily 3 minutes worth through the lifetime of the card (2 years average).

If another company B has a value of “quality”, the approach could be different. A roadmap would be drawn aimed at a top-quality product amongst its competitors. Day-to-day buyings would be based on the quality of supplies and the quality added to products and services, even if more expensive.

Of course, a company could have both “profitability” and “quality” values. In this case, the leaders presumably believes top-quality on their market also means high profits. Decisions would be made based on either of them, or both of them if possible.