business-plan, sales, market-research, game-studioI have been working on a video-game project, and I am in negotiations with a publisher. Among other things I have been asked to provide projected sales, and i am not sure how to approach this. There are other products I can use as examples that have similar properties. But the only ones I would be aware of are the ones that turned out successful, which I feel would not be accurate.
How should I approach estimating sales in this market?
Although I have no experience in video games, in general business plans using factual market data and percentages to derive sales estimates works well.
For instance start big: depending on whether the game/app is written written for PC’s, mac, mobiles etc. do some market research and determine how many of these supported devices are in use worlwide.
Then narrow it down using known, available data. Is the app English-language only? If so how many people is that potentially? Then make a solid guess at your target demographic. Teen/adults/men/women etc. Now how many people?
You can eventually arrive at your very estimated potential market size and you can make some reasoned assumptions about how many people might be available to buy it.
Then you can look at your peer-game-group and see what their adoption rate and price points are to make a curve. Or if the price has to be solid one good guess. Your potential publisher (or investors) will then have to determine if the data is realistic. Also be sure to cite your sources for market research and that the sources are good.
You may also want to add afterwards how much effort it would be to port the game to a new spoken language or platform which might open up the rest of the markets you elimintated.
All content is licensed under CC BY-SA 3.0.