Do You Need a Company to Sell a Game?
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The short answer is no, you do not absolutely need a formal company like an LLC to sell a game. However, whether you should operate under a business entity is a more nuanced question that depends on your specific goals and scale of operation. Let’s delve into the details of self-publishing versus operating as a business, and what that entails for game developers.
Self-Publishing vs. Operating as a Business
When you’re starting out, particularly with smaller indie projects, self-publishing is a viable and common route. Platforms like Steam allow individuals to upload and sell their games without the need for a registered company. This straightforward approach lets you quickly get your game in front of a global audience.
However, as your game gains traction and you start generating income, operating under a formal business structure, such as an LLC (Limited Liability Company), offers substantial advantages:
- Liability Protection: An LLC shields your personal assets from business debts and lawsuits. If someone sues your game company (for copyright, for example), your personal savings and property are generally safe.
- Tax Benefits: Depending on your location and income, an LLC can offer tax advantages compared to operating solely as an individual.
- Professionalism: Operating under a business name creates a more professional appearance, which can be crucial when collaborating with other developers, publishers, or marketing partners.
- Banking and Finance: Opening a business bank account, acquiring business loans, and managing finances becomes much simpler and more professional with a registered business entity.
For a small-scale hobby project, these benefits may not seem essential. But as your revenue and ambition increase, structuring your operations as a business is highly recommended. The main takeaway? You can publish and sell as an individual, but for long-term security and growth, a business entity can be crucial.
How to Sell Your Game as an Individual
If you decide to start as an individual, here’s a breakdown of the basics:
- Choose a Platform: Steam is one of the most popular options for selling PC games. Platforms like the App Store and Google Play are available for mobile games.
- Create an Account: Sign up for a developer account with your platform of choice. You will need to provide personal details including your name and bank account details, which must match.
- Prepare Your Game: Ensure your game is technically polished, optimized, and ready for distribution.
- Market Your Game: Develop marketing strategies, create trailers, and engage with potential players through online channels.
- Handle Sales: Take care of your own sales and transactions, including payouts and reporting.
Selling on Steam as an Individual
Steam, specifically, allows you to onboard as an individual, meaning you do not need a company. This simplifies the initial steps for many indie developers. The crucial part is that your bank account name MUST match the name you provide for your Legal Company Name. Although it says ‘Legal Company Name’ it does allow you to input your own individual name. Remember, this route means your personal assets are not legally separated from your business, which is why an LLC is recommended for businesses with growth ambitions.
Expanding into a Game Business
If your aim is long-term business growth, consider the following steps to transition from an individual seller to a proper game business:
- Register your Business: Choose a business structure (LLC is popular due to limited liability and flexibility), and register your business with the relevant authorities.
- Open a Business Bank Account: Separate your personal finances from your business finances to facilitate accounting and avoid personal asset exposure.
- Establish Business Finances: Track your revenues, expenses, and investments effectively.
- Build a Team: As you grow, you might need to bring on partners, artists, programmers, and marketers.
- Consider Publishing Options: If you aim for a larger release, research potential publishers. They can provide expertise, resources, and wider distribution.
Frequently Asked Questions (FAQs)
1. Do I need to register a business to sell my video game?
No, you don’t absolutely need to register a business to start selling your game. You can use platforms like Steam to publish your game as an individual developer. However, a business entity like an LLC is highly advisable for protection and tax advantages, especially as your project grows.
2. Can I sell my game on Steam as an individual?
Yes, you can sell on Steam as an individual. You will need to create an account, agree to the terms of service, and pay a one-time fee of $100. Your bank account name must match the name you provide for your Legal Company Name, even if that’s your own name.
3. What is the ‘Steam Fee’ when selling on Steam?
The Steam fee is usually 5% of the item’s sell value, with additional game-specific fees that are determined by the game’s developer.
4. Do I need a lawyer to copyright my game?
While you don't strictly *need* a lawyer to copyright your game, it's advisable if you want thorough protection. A copyright lawyer can ensure that all aspects of your game are properly protected. Costs can range between $500-$900 for flat fee arrangements.
5. How do I sell my game to a publisher?
Reach out to publishers **with an offer to sign an NDA**. Don’t just send them the game without consent.
6. How do I sell a game to GameStop?
GameStop offers trade-ins of used games. Use their website or app to determine the trade-in value of your game before bringing it to a local store. They usually pay significantly less than the market price.
7. What are the best ways to market my game?
Use strong **trailers**, provide a **demo**, participate in gaming **events**, and offer strategic **pricing**.
8. What are common sales channels for selling games online?
You can sell games from your own store (like Shopify), on third-party marketplaces (Amazon, eBay), on niche websites, and via social media.
9. Is self-publishing a good idea?
**Self-publishing** is excellent for smaller projects and indie developers. For larger games, a dedicated publishing deal can provide greater opportunities and resources.
10. How much does it cost to publish on Steam?
It costs a one-time fee of US$100 to publish a game on Steam.
11. What percentage does Steam take from game sales?
Steam takes a **30% cut of sales** through their platform. Developers receive the remaining 70%, but Steam may withhold a portion for taxation.
12. How much does CS.Money take from game sales?
The site’s commission is **7% and can be reduced to 4%**.
13. What are common ways game owners make money?
Game owners make money through **in-app purchases, advertising, subscriptions, sponsorships and licensing, paid DLCs**, etc.
14. How profitable is the gaming industry?
The video game industry is very profitable with an estimated worth of **$214.2 billion.**
15. Why does GameStop pay so little for trade-ins?
GameStop needs to make a profit, and used games have a **higher profit margin**. They pay less to increase their profit margin on used sales.
Conclusion
While you can indeed sell a game without a formal company structure, opting to register your game operation as a business, especially an LLC, is a wise long-term strategy. This approach provides essential legal protection, tax benefits, and a more professional framework for future growth and collaboration. Starting as an individual can be a great way to launch your first projects, but as your ambitions and success grow, consider formalizing your business to maximize your opportunities.