Don't miss
  • 12
  • 6468
  • 6097
  • 20

Benchmarks are bollocks?

By on October 1, 2014
Conversion rates
Print Friendly

This is a guest post from Chris Kempt in response to a recent post by Nicholas


 

Last week I was at the UKIE AGM (a triumph once again) and while I was there I received a good-natured ribbing for my recent performance on the BBC’s Dragons Den – I’m probably paraphrasing badly but I think the comment was something like “I don’t know, go on Dragons Den, forget your numbers, make the games industry look stupid…”. Whilst this was clearly meant in jest and was forgotten moments later I’ve just been reminded of it by an article on GamesBrief by Nicholas Lovell.

You see the thing is – whilst I agree it came across like that – I think it’s a bit unfair. Like any telly, it was cut to tell a story – but more importantly:

1) In my opinion (a position supported by this article) benchmarks in the games industry at the current time are effectively meaningless. At best they can be considered as an average of a hugely chaotic system and, even then – since unsuccessful projects are less discussed – probably only an average of the minority of successful projects. In my opinion there are other, more useful variables we can be looking at.

2) Ultimately any an investor is only really interested in profit and it seems pretty clear that in the current market you either make nothing or millions.

3) Obviously, you’re not likely to be writing a business plan based on making nothing so we have to assume you’ll make millions – it’s just a question of how many.

4) At this point your investment proposition becomes quite simple – effectively 3 variables:

  • How much money you need
  • How many millions you think you can make
  • Your chances of success.

So, for example (and keeping the maths simple) if you’re looking for £100k and aiming to return a million then you need to create a business plan which makes a convincing case that you’ve got a better than 10:1 chance of success.

Now, the amusing thing about all this is that when i went into the Den the forecasts I had were based on a series of industry benchmarks and a revenue forecast taken directly from the GamesBrief site! Frankly, I wasn’t at all confident in the numbers which – regardless of how it was cut – clearly came across in the Den. In hindsight I wish I’d used a rationale similar to the above but at least, now Nicholas has said he’s also not super-confident in the numbers either, I feel a little bit vindicated.

Hopefully all this will settle down over the next couple of years but in the meantime, if we expect people outside the games industry to invest, I think we need to try and simplify what we’re doing and make the variables easier to understand, measure and – most importantly – communicate.

About Chris Kempt

Kempt are a small games studio based in the UK who have been earning a living making fun, playable and largely very silly games for over a decade. Over the last few years we’ve developed into a fully-fledged mobile games studio producing top ten games for iOS, Android and Windows Phone.