How To Lose Money In Video Games

A reader emailed to ask that since I’m self-publishing audiobooks if that meant I was going to start self-producing video games based on my books.

Not just no, but heck no!

Audiobooks are expensive. But video games are much more expensive and infinitely more complicated – you have to hire developers, programmers, artists, sound people, music people, QA people, and then the inevitable time fixing and patching bugs. All of that is enormously expensive.

Actually, a funny coincidence – right now I’m listening to the audiobook SODA POP SOLDIER, a LitRPG book written by Nick Cole and narrated by Guy Williams, and one of the book’s subplots is a fantasy writer who invested all his money in an MMORPG based off his books. Except costs escalated, and he had to borrow money from bad people to keep the game afloat, and he eventually wound up in hock to an organized crime syndicate who use the game as a backend for various illegal activities.

Now, winding up in debt to the Futuristic Cyber Mafia is an extreme case, admittedly, but the underlying account of video game developers losing a lot of money is pretty accurate.

There are many, many, many, many stories of video game developers who went bankrupt. It is a very difficult way to make money. How difficult? Let’s put it this way. There’s no way I would ever invest in a restaurant.  Something like 90% of all new restaurants fail, and fail hard. However, if someone forced me to choose between investing in a restaurant or a video game developer, I would still invest in the restaurant. As difficult as the restaurant business is, a restaurant probably isn’t going to go out of business because of a technology change in the new generation of XBox consoles. Or for that matter, video games depreciate hard. If you can sell a new game for $49.99 in 2014, you won’t be able to to that in 2019.

So, no, I’m not going self-produce video games.