State of Hyperbole Games 2014
Steve Jackson of Steve Jackson Games writes an annual report discussing his company, their year's successes and failures, and the next year's plans. I love reading it and I am going to copy him. I think it might be useful to new folks interested in starting a business.
Hyperbole Games right now is just me as Owner and Manager. Boom! Title inflation.
2014: Revenues and Expenses
In 2014, Hyperbole Games operated at a loss. We earned many thousands of negative pennies. This was expected and fully inline with our plans. We had no revenue sources in 2014. I expected to receive a small sum of money from Farmageddon royalties, but unfortunately 5th Street Games declared bankruptcy and no royalties were paid for the year.
2014 was the first year of the company, which came with many fees. These included:
- Paying for assistance to found my LLC. I'm not keen on surfing the federal or California state government's bureaucracy and getting this wrong. You know how politicians like to talk about states being bad for small business? Well, California is bad for small business.
- Yearly fees to the state of California
- Art development fees for the prototype
- R&D fees to mail copies to testers. We invested in our development because it's important.
At the start of 2014, we were quite giddy and aggressive about our expectations. Like the grinning fool who thinks he just met his wife 10 minutes into the first blind date, we thought we were on the fast track. Then, in a mature moment of introspection, we removed our beer goggles and ripped out our own hearts. We needed more time.
In November, or the end of October, we found our game. Since then, we've conducted over 100 tests on this version alone, seeking to perfect balance, rules, and the overall experience.
Continuing where 2014 left off, we've spent 2015 preparing to publish Hocus. This has included several activities, including:
- Finalizing the name of the game (In progress)
- Hiring and overseeing art production (March and April)
- Hiring and overseeing graphic design (beginning May 1st!)
- Designing and editing our Kickstarter page
- Arranging for PR opportunities, including Podcasts, news, and previews
- Finalizing manufacturing and shipping plans
- Manufacturing supplementary product plans
- Balancing the spells
- Making final decisions regarding the product, including variants and such
Our current plan is to conduct a crowdfunding campaign in June and July. The primary purpose for this is to determine demand for our game and leverage Kickstarter's platform, which handles things like collecting money from customers. These can be complicated and expensive investments and it feels foolish to invest there at this time.
This means the game will be finished somewhere from November 2015 to February or even March 2016.
Expenses will continue to ding us for 2015 as we invest in our first product. We're investing in Hocus with AAA art and top notch manufacturing. We also continue to pay California LLC fees and the fees of CPAs to help us navigate this landscape. I will need to consider whether the Hyperbole business model and California make LLC the wrong corporate course for me. But, at this time I don't want too much churn. I've made the decision and I'm going to focus on delivering a quality game.
Revenue will still be sparse in 2015. We will hopefully gain $6,000-10,000 (ignoring fees and such) for our crowdfunding campaign. That's a low estimate, but a fair one. At the high end I think we can reach $25,000, which coincidentally is what my first game earned on Kickstarter in 2012. From my perspective, $25,000 is essentially $5 million. There may be other revenue sources I cannot discuss at this time.
We've also begun investing in art development for Landfall, a title we plan to release in 2016, but only after Hocus has been delivered. Our investment at this time is minor, but it exists.
We expect to finalize development of Landfall this year. We have prototypes in testing for much of the project and have done a great deal of cost analysis for goods, fulfillment, and more. Ideally we'll begin art production towards the end of the year so that we can kick this project off as soon as Hocus is fulfilled. But, as with all things, we'll pull the emergency brake as needed to ensure quality and the timing is right.
I think we have a few big opportunities that are actually the byproduct of time, performance, and a little luck more than monetary investment. The first of these is growing our newsletter. I would love to have a newsletter of 500 people at the end of delivering Hocus. Why? I want to build that relationship with our customers. I want to have an avenue to reach out to potential testers for future games. This is such an incredible tool that will take years to build, but it's so worth it.
Another more expensive opportunity is to develop Hyperbole Games to support direct sales. But, this looks premature. I don't expect to see a spike in traffic to our site, especially for customers. For now, our focus will be on partnering with a quality distributor and selling directly via Amazon.
There are other site improvements, like having a news blog, making the Newsletter subscription more prominent, or having a game page designed to showcase games and not act like a blog.
2016: Looking Forward
I think 2016 will be the first year we're a real company. It seems bizarre to think about that, but it's only 8 months away and a lot of things will happen. Firstly, and most importantly, we expect to have Hocus delivered to early Kickstarter supporters and ideally at retail.
Secondly, I am seeking a publishing partner for Farmageddon. If that is picked up, that will be a minor revenue stream. Furthermore, my title with Portal Games will potentially be on the market in 2016, which will be another small revenue stream.
We will need to invest in Hocus, if we deem it worthy of such investment, to make it a success. This includes a potential presence at GAMA to show it to retailers, a presence at local cons (San Francisco Bay Area and Seattle), ads and promotions on Board Game Geek, and working with reviewers to recommend and promote the final game.
On the subject of conventions, I don't expect us to be in official attendance at the large conventions for quite some time. By large, I mean Gen Con, Essen, Origins. We might never be there, depending on how successful we are. I think our money is best spent on art, manufacturing, and promoting our games. We need to build an audience and reputation and hold onto every dollar tightly. I think it will be a mistake to get lost at Gen Con among so many huge, incredible companies. I would love to have a small booth at BGG in 2016, but I have no clue what that costs. That is a wonderful, intimate convention, perfect for a small company with a small game.
We have a rough idea for our next game following Landfall. We have not begun work on it, but we're salivating at the thought. We have a queue and it's quivering with anticipation.
Back to the Present
As is common with my every day it seems, I need to go cut a check to my accountant. April 15 is a harsh reminder of both taxes and the birth of Josh. A terrible day, truly.
If you have any questions or thoughts about things discussed here, please ask. I'm trying to provide interesting and useful content for other business folks. The business interested and the business established. Thanks for reading!