![How to plan and track the budget of your video game development agency [template]](http://onlineyougrow.com/cdn/shop/articles/cov-budget-9_2139512c-9042-41a2-9f7a-dace2924fc67.png?v=1715856329&width=1100)
If you don’t plan and track your game development budget properly, you're setting yourself up for failure.
When we developed our strategy pack for game developers, we saw a lot of studios struggling with finances and project planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having promising projects.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your studio's finances around and set you on the path to success!
Get the budget tracker tailored for video game agencies
Most video game agency owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for video game agencies
Here is an example of a (very) detailed budget for a video game development agency, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for office space | $4,000 | $48,000 |
| Electricity | Power consumption for computers and servers | $600 | $7,200 |
| Internet & Phone | High-speed internet and business phone | $200 | $2,400 |
| Software Licenses | Licenses for development tools and software | $1,000 | $12,000 |
| Insurance | Property and liability insurance | $300 | $3,600 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Lead Developer | 1 | $8,000 | $8,000 | $96,000 |
| Game Designers | 2 | $5,000 | $10,000 | $120,000 |
| Programmers | 3 | $4,500 | $13,500 | $162,000 |
| Artists | 2 | $4,000 | $8,000 | $96,000 |
| QA Testers | 2 | $3,000 | $6,000 | $72,000 |
| Project Manager | 1 | $6,000 | $6,000 | $72,000 |
3. Development Costs
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Game Engines | Licenses for game engines (e.g., Unity, Unreal) | $500 | $6,000 |
| Asset Store Purchases | 3D models, textures, sound effects | $300 | $3,600 |
| Server Costs | Hosting and server maintenance | $400 | $4,800 |
| Hardware Upgrades | New computers, graphics cards, etc. | $1,000 | $12,000 |
| Sound & Music | Original soundtracks and sound effects | $500 | $6,000 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, etc. | $500 | $6,000 |
| Social Media Management | Managing social media accounts | $400 | $4,800 |
| Influencer Partnerships | Collaborations with gaming influencers | $600 | $7,200 |
| Website Maintenance | Hosting, domain, updates | $100 | $1,200 |
| Email Marketing | Email campaigns and newsletters | $150 | $1,800 |
| Promotional Events | Game launch events and promotions | $300 | $3,600 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Equipment Maintenance | Regular maintenance of office equipment | $200 | $2,400 |
| Office Supplies | Stationery, pens, printer ink, etc. | $100 | $1,200 |
| Licenses & Permits | Software licenses, business permits, etc. | $150 | $1,800 |
| Contingency Fund | Emergency repairs and unexpected costs | $500 | $6,000 |
| Staff Training | Training programs and materials | $300 | $3,600 |
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What are the biggest expenses for a video game development agency?
Watch out for these pitfalls. Here are five major costs every video game development agency needs to consider, along with some tips on how to manage them effectively.
- Development Software and ToolsThese can take up a significant portion of your budget. You're dealing with licenses, subscriptions, and updates that can vary in cost. To keep these expenses in check, focus on using open-source tools where possible, negotiate bulk licenses, and avoid unnecessary upgrades. It's easy to overspend by opting for premium tools that don't add enough value to your projects.
- Your Development TeamYour team is your core asset, but paying for their salaries, benefits, and training can be costly. This expense is always high because you need skilled developers, designers, and testers to create quality games. You can optimize labor costs by efficient project management, cross-training team members, and monitoring productivity. However, be careful not to underpay or overwork your team, as this can lead to high turnover and subpar game quality.
- Office Space and UtilitiesPrime office locations come with high rent, but they can attract top talent. Utilities like electricity, internet, and software hosting services are essential but can add up quickly. To optimize these costs, negotiate favorable lease terms and invest in energy-efficient office equipment. Overspending often happens when you choose an office space that's too large or too luxurious for your needs.
- Marketing and PromotionYou need to get the word out about your games, but advertising can be expensive, whether it's online ads, social media campaigns, or attending gaming conventions. Optimize this expense by focusing on cost-effective methods like the ones we recommend in our guide. Overspending can occur if you invest in flashy campaigns without a clear return on investment.
- Hardware and Maintenance CostsThis includes everything from development PCs to testing consoles. These are expensive because high-quality hardware and regular maintenance are crucial for smooth development and testing processes. Optimize by investing in durable, high-performance equipment and maintaining it regularly to avoid costly breakdowns. You can overspend by going for the latest high-tech gadgets you don't really need.
How to spend less with your video game development agency?
Here are practical tips to help you, as a video game development agency owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Software Licenses | Consider open-source alternatives and negotiate bulk licensing deals for essential software. |
| Labor Costs | Utilize project management tools to streamline workflows and reduce overtime. Consider remote work to save on office space. |
| Utilities | Implement energy-efficient practices in your office, such as using LED lighting and energy-saving computers. |
| Marketing | Leverage social media platforms and collaborate with gaming influencers for organic reach. Run online contests to engage your audience. |
| Hardware | Invest in high-quality, durable hardware that can handle intensive development tasks and has a longer lifespan. |
| Equipment Maintenance | Maintain a regular schedule for hardware and software updates to prevent costly breakdowns and downtime. |
| Office Space | Negotiate lease terms during renewal or consider co-working spaces to reduce overhead costs. |
| Insurance | Regularly review your insurance policies to ensure they meet current needs and compare rates annually. |
| Cloud Services | Use cost-effective cloud storage solutions and optimize your usage to avoid unnecessary expenses. |
| Development Tools | Choose development tools that offer essential features and integrate well with your existing systems. |
| Staff Training | Conduct regular in-house training sessions and utilize free online resources to keep your team updated on the latest technologies. |
| Project Management | Implement a robust project management system to track progress, manage resources, and reduce waste. |
| Technology | Invest in multi-functional devices and utilize software that can handle multiple tasks to reduce the need for additional equipment. |
| Office Supplies | Purchase supplies in bulk and go paperless where possible with digital project management and communication tools. |
| Inventory Management | Use inventory management software to track hardware and software assets, ensuring efficient use and reducing redundancy. |
| Security | Implement robust cybersecurity measures and conduct regular audits to protect your intellectual property and data. |
| Music and Sound Effects | Use royalty-free music and sound effects or collaborate with local artists for custom, cost-effective audio solutions. |
| Uniforms | Opt for casual, comfortable work attire and provide staff with a stipend for maintenance instead of using an external service. |
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Expenses that are just useless for a video game development agency
Yes, some expenses for your video game development agency are just unnecessary. They don't contribute to increasing revenue or improving the gaming experience.
| Agency Expense | Reason It's Useless |
|---|---|
| Luxurious Office Space | Overly lavish office spaces don't necessarily attract more clients and can be a drain on the budget. |
| Premium Software Licenses | Unless you are working on highly specialized projects, most developers are satisfied with mid-range software options. |
| Excessive Game Features | Adding too many features can increase development costs and lead to a cluttered user experience. |
| High-End Hardware | Top-of-the-line hardware is not always necessary and can be cost-prohibitive. |
| Traditional Advertising | Traditional ads often have a lower return on investment. Don’t include them in the marketing strategy of your agency. |
| Multiple Branding Styles | Having various branding styles increases costs without adding significant value to the client experience. |
| Excessive Staffing | Overstaffing leads to higher labor costs without necessarily improving project quality. |
| Premium Subscription Services | Expensive subscriptions for industry magazines or tools often go unnoticed by clients. |
| Exclusive Game Assets | Using rare assets can inflate costs and complicate the development process. |
| Costly Office Furniture | High-end furniture is not always appreciated by clients and can be a significant expense. |
| Custom Printed Merchandise | Personalized merchandise is a minor detail that most clients overlook, and it can be expensive. |
| Unnecessary Software | Paying for software with features you don’t use is a waste of resources. |
| Premium Coffee Brands | Most employees are content with standard coffee options, making expensive brands unnecessary. |
| Extra Office Space | Maintaining more office space than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Overly Frequent Office Renovations | Constantly updating decor and layout can be costly and disrupt operations. |
| Expensive Office Decorations | Elaborate decorations are often ignored by clients and add to the cost. |
| High-End Office Supplies | Luxury office supplies are prone to damage and expensive to replace, often going unnoticed by clients. |
| Excessive Team Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive Marketing Materials | Frequently redesigning marketing materials is costly and often unnecessary. |
| Unused Promotional Materials | Ordering more promotional items than needed leads to waste and unnecessary expense. Get our marketing budget planner template. |
| Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
| High-End Event Equipment | Specialized event equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your video game development agency!
Managing a budget for a video game development agency when funds are tight can feel like a nightmare. It's like being trapped in a maze where any unexpected expense can derail your entire project.
This constant pressure makes it nearly impossible to invest in innovative projects, leaving you always chasing after expenses. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, scraping together resources and barely making ends meet. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on growing your revenue. More income means more breathing room and more money to invest in your next big game.
And no, you don't necessarily have to spend money to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of game development agencies just like yours. Get them now!
Make your video game development agency more profitable
We have studied the strategies of the best video game agencies in the world. All their tactics are explained in our pack!
