So you want to develop games?
Whether you want to form a big work-for-hire studio or a bootstrapped indie game company, the basic principles are the same. Have a plan, protect your personal assets and your company’s IP, and follow the laws. I can’t underestimate the importance of adhering to a good legal structure for your company.
With that in mind, here’s my ultimate checklist for everything you need for your own game development studio:
Your Game Company Game Plan
Before you file any paperwork, you need a plan. The three steps below sound basic, but they’re the decisions that determine whether your studio has the runway and direction to actually make and ship a game — or runs out of both in the first year.
1. Draft a business plan
A solid business plan is the basis of any new business. It contains your plan for funding the company, researching your market, developing your product, promoting the game to consumers, staying afloat, and finding success. The games business is a difficult one – planning for both success and failure is a crucial part of it, and needs to be addressed before you begin.
2. Gather your team of advisors
Most entrepreneurs don’t know all of the ins and outs of starting and running a business. Any good business has a team of specialized advisors to help them. At the very least, get an attorney and a tax advisor to make sure you’re staying compliant and protecting your new business.
3. Fund your company
Businesses need money to develop and sell a product. A game company is no exception. There are a number of ways to fund your company, from bootstrapping it yourself to getting investors (whether for equity or through crowdfunding). Figure this out as part of your business plan. See our guide on funding your indie game company for a breakdown of each option.
Form Your Company
Formation is where most indie studios make their most expensive mistakes — usually by rushing to file an entity before sorting out ownership. Getting items 4 through 9 right means your company agreements reflect the actual deal between everyone involved, not a template you found online.
4. Decide what kind of business entity to form
There are a few different types of business entities, each with its own pros and cons. Our guide on choosing the right business entity for game development covers each option in depth. For limited liability (which is super important), your two main options are corporations and LLCs. Deciding which to form is a choice you should make with your attorney and tax advisor’s help.
5. Figure out how to divide up ownership
If you are the only owner in the company, things are easy – you own the whole thing. But if there are multiple owners, or some active owners and passive investors, things can get tricky. There are many options here, but it’s best to discuss them with an attorney first.
6. Avoid “dead” equity
One issue that’s common with startup companies is something called “dead” equity, where one of the founders has left the company but still owns a piece. To avoid this, you have the membership “vest” over time, so they don’t get all (or any) of their ownership interests until they show that they’re in it for the long haul.
7. Be an equity miser
Another issue that startup company founders face is giving away too much equity. Once you give it away, it’s difficult to get back, so you need to be careful and a bit of a Scrooge when handing out ownership. One great way to do this is through a dynamic equity system like the “Slicing Pie” method, which fairly distributes ownership based on actual time and money contributions. For a deeper look at how to divide equity fairly in a game studio, see our post on dividing equity in a new game studio.
8. Form the business entity
Once you’ve got all the issues worked out, it’s time to actually form the entity. In many ways, this is the easy part – usually there are just some forms or paperwork that need to be submitted along with a fee. However, there are many potential pitfalls in doing this wrong, so it’s best to have professional help.
9. Get your company agreements in place
Now that the company exists, you need paperwork to show all of those decisions you made earlier about ownership and control. Again, these are best drafted by a professional, rather than trusting forms you found on the Internet or get through LegalZoom. I’ve seen my fair share, and they ain’t pretty.
Own Your Intellectual Property
A game studio’s value lives almost entirely in its IP — the code, the art, the characters, the brand. Items 10 through 12 make sure the company actually owns what its people create, rather than discovering after launch that a contractor retained copyright to your game engine.
10. Get employment agreements signed
A game company’s value is almost entirely wrapped up in its intellectual property (the game content, the brand names, and the software you create). When you hire employees, you automatically own the copyright to what those employees create (in most cases). However, the safest bet is to have a comprehensive employment agreement signed, which transfers not only copyright, but also patent and other important IP rights.
11. Sign agreements with your contractors
Unlike with employees, you DON’T automatically own copyright to work that’s done for you by independent contractors. You need a written and signed “work for hire” agreement in place. This is vital for your business, and not doing it can be a MASSIVE headache down the road. Bonus sub-topic – are you sure you know if the people working for you are employees or contractors? This can be a murky distinction, and it’s best to talk it through with your attorney. For a deeper look at what that agreement should cover, see our post on 4 vital contract terms when hiring a game developer.
12. Protect your trade secrets
Some things are best kept a secret. This can be inventions or processes that you plan to patent, or proprietary software code that you’ve developed. Keep these secrets under wraps by taking reasonable security measures and getting signed confidentiality agreements (otherwise known as NDAs) in place. Hint: they can be integrated into your employee and contractor agreements.
Protect Your Intellectual Property
Owning your IP and protecting it are two different problems. Items 13 through 16 cover the external threats: someone else using your game’s name, a competitor cloning your title, and what to do when you need to enforce your rights.
13. Choose your company and game names wisely
Have a cool-sounding name for your new company or its first game? Hold up a second. You need to do a proper clearance search for those names before starting to use them. If you don’t, and someone is already selling a product under that name, you could open yourself up to a trademark lawsuit and lose out on all of your brand marketing.
14. Register your trademarks
Once you (or your awesome attorney) has cleared your names, it’s a good idea to get them registered with the USPTO. This puts everyone on notice that you have exclusive rights to that name, allows you to sue them in federal court, and makes you the presumptive original owner of those trademarks. These are all important things when building your brands! For a step-by-step overview of the trademark process as it applies to games, see our guide on how to protect your video game trademark.
15. File timely copyright registrations
Once you’ve published a copyrightable work (like a game), you need to file a federal copyright registration for that work within 90 days. If you do, you get to take advantage of legal damages dictated by statute, get your attorneys’ fees paid, and avoid having to prove how much you were actually damaged (a difficult task). It’s cheap to do – there’s no excuse for not filing a timely copyright registration.
16. Police your trademarks and copyrights
Once you’ve started your brand and released your game, you need to stay on top of any infringement that’s out there. There are a number of tools available that don’t require litigation – cease and desist letters, DMCA takedowns, filing complaints with publishing platforms, etc. Then there’s always filing a lawsuit, which is often a last resort, as it’s the most expensive and time-consuming.
Get Your Game to Market
Getting from a finished game to an actual launch involves a new round of agreements — and these are the ones developers most often sign without reading. Here’s what to review before you click “publish.”
17. Read your distribution platform agreements
Steam, the App Store, Google Play, and Epic Games Store each have developer agreements that hand certain rights to the platform in exchange for access to their store. These cover revenue share terms, the platform’s right to remove your game, refund obligations that come out of your cut, and rules about pricing and exclusivity. Read these before you upload. What you agree to when you publish governs your relationship with millions of customers — your own terms of service govern your relationship with the platform, and both need to coexist without contradicting each other.
18. Review any publisher agreement before signing
If you’re taking a publisher advance, you’re trading a share of future revenue — sometimes permanently — for upfront money. The terms that bite developers most often are buried in the fine print: recoupment language (does the publisher recover its costs before you see any royalties, and what counts as “costs”?), territorial rights (which countries?), and IP reversion clauses (do you get your game back if the publisher stops selling it or goes under?). A publishing agreement without a clear IP reversion clause is one of the most common mistakes that haunts studios for years. Have an attorney review it before you sign. For a full breakdown of what publishers do and what they typically take, see our guide on what a video game publisher does.
19. Get your age ratings sorted before launch
Retailers and major platforms require age ratings. In the US, ESRB ratings are technically voluntary but effectively required by any major retailer or platform. Submitting for a rating is a separate process from platform certification — budget time and fees for both, and start the process earlier than you think you need to. Getting your rating wrong, or skipping it entirely, can delay your launch by weeks.
Stay Compliant and Protect Your Company
A privacy policy violation or a class-action dispute over in-game currency can cost more than the game made. Items 20 through 23 cover the ongoing legal obligations that kick in the day you go live — and that most developers only think about after they’ve already shipped.
20. Have a comprehensive privacy policy
Unless your game isn’t connected to the Internet in any way, you’re probably taking some kind of personal information from your users. If you are, you need to have a comprehensive privacy policy available to them. This details what you collect, how you use it, and who you share it with, among other things. It’s the law – don’t skip this step!
21. Protect users’ personal information
In conjunction with your privacy policy, you should have reasonable security measures in place for protecting that personal info you collect. A plan for what to do in case of a data breach (including notification of users and mitigating further harm) is also recommended.
22. Get an ironclad terms of use drafted
There are a number of potential legal wrangles you can get into with your users. Disputes over virtual currency, in-game behavior, and termination of users’ accounts can all blow up into something much bigger (class actions). Avoid these issues with a bulletproof terms of use, limiting your liability and preventing class action lawsuits over your game.
23. Follow local regulations
Depending on where you are and where you release your game, there could be a number of local regulations. Gambling laws, game rating requirements, and many other things are dealt with on a local level and vary between countries. Make sure you’re staying on top of these when you release your game.
Frequently Asked Questions
Do I need an LLC to start a video game company?
You need a limited-liability entity, but an LLC is not the only option. An LLC is the most common choice for indie studios because it separates your personal assets from business liabilities and offers flexible tax treatment. An S-Corp or C-Corp may make more sense once you have investors or employees. Your attorney and tax advisor should make this call together.
How do I protect my game’s intellectual property before launch?
Get IP-assignment clauses in every employment and contractor agreement before anyone writes a line of code. You don’t automatically own what a contractor creates. Register your game’s name as a trademark early. Copyright protection attaches automatically, but federal registration within 90 days of publication lets you claim statutory damages and attorney’s fees if you’re ever infringed.
Do I need a lawyer to start a video game company?
Not for every step — but for the ones that matter most. Filing an LLC yourself is straightforward. Where founders get hurt is in the paperwork that follows: operating agreements with bad buyout terms, contractor agreements that fail to transfer IP, or publishing deals signed without understanding recoupment clauses. A gaming attorney who knows the industry pays for themselves the first time you avoid a dispute.
Can I start a video game company by myself?
Yes — solo indie studios are common. The legal steps are simpler with one owner: no equity split, no vesting schedule, no co-founder disputes. You still need entity formation, IP ownership agreements with any contractors you hire, and the full compliance stack once you ship. The business plan and funding questions get harder solo, but nothing in this checklist requires a team.
How much does it cost to start a video game company?
State filing fees for an LLC vary by state — Delaware and Wyoming are known for low costs, while California charges substantially more. Attorney fees for operating agreements, IP assignments, and trademark registration are the larger expense and scale with your team structure and IP complexity. Add ESRB rating fees and platform developer program enrollment once you’re planning a commercial release.
Conclusion
That’s it! A 23-step roadmap for starting your new game company — from the initial plan through formation, IP protection, getting to market, and staying compliant once you’re live.