Good luck, man. I already did that, and it really paid off. I did it mostly alone, with my brother as musician, with no investment. But it isn't easy. I gone for ensuring success, which meant making a complicated piece of software that is unique and for which i can be certain there is some market without having to second-guess the audience or compete with anyone.
Going the path well walked, gets you competing with all the 99.9% remakes that are entirely invisible. The most profitable game may be cow clicker, but there's thousands upon thousands of other cow clickers that are not profitable, and which you don't see. When you say you look at 'success rate' of X, don't be looking at the % of the successes which are X, that's your basic application of rationality to this decision right here. The simple toy games are not even exercises in game programming. They are exercises in marketing (and blind luck). If you had 10 000 hours of marketing experience, then you totally should go for them.
Your company plan sounds very much like how Valve is structured. You may find it challenging to maintain your desired organizational structure, given that you also plan to be dependent on external investment. Also, starting a company with the express goal of selling it as quickly as possible conflicts with several ways you might operate your company to achieve a high degree of success. Many of the recent small studios that have gone on to generate large amounts of revenue (relative to their size) (Terraria / Minecraft / etc) are independently owned and bui...
Two pieces of advice.
Firstly, write a formal business plan with the numbers as accurate as you can make them, not to show other people, but for your own consumption. How much equity do you want to have at the various stages? What skill sets or experience will the VCs be looking to see in your first 2 hires? What pay structure will you need to offer them to secure that? What skills don't you have, that you'll need your co-founder to have? Once you've got a few variant plans that seem plausible to you, apply your rationality training to them. (For exam...
The amount of money I can make working for a company isn't even close to how much money I want to donate. There are multiple reasons to believe I will succeed, some of which I've listed above. Another reason for doing a game startup comes from Michael Vassar's advice: "Find something that inside view says you'll definitely succeed at, and outside view says you'll definitely fail it. Do it and see what caused the discrepancy." This is the fastest way to fix your perception of the world.
Starting a successful company is not magic. There is a set of skills, and I'm planning to learn and master them. Will my first startup be successful? May be not, but there is no reason to stop after the first failure, especially since I'll have so much more experience after it.
Start-up founders are hardly insane. From my perspective, it's the intersection between video games and start-ups that is the problem.
The things that make video games good (good writing, good graphics, good sound effects, good gameplay, etc.) are easier to accomplish when you have a decent amount of staff and enough money to throw at the problem. The video game market is horrendously saturated, with a large segment of the population not even finishing games once. (I don't have any hard statistics for this, but it's a trope that is well-attested on r/gaming and the game blogosphere, e.g. "You Gonna Finish That?").
To make matters worse, the market is also infamously critical of everything -- fail in one category, and you basically get panned. For example, Mass Effect 3 is getting a lot of flack for having a "bad" ending, despite being otherwise a well-polished game with a budget the size of Missouri.
One could subvert some of this by developing for phones, but the iOS market has notoriously finicky gatekeepers. Android, perhaps -- I don't know much about them.
Please re-read _Purchase Fuzzies and Utilons Separately_.
If you want to reduce X-Risk, go for it.
If you want to make games, go for it.
If you want to make lots of money, great! Go for it, it's great doing what you love and you can always buy some of the other two later.
Choose what's most important for you, because I fail to see how these three goals converge. Game development has awful ROI. Look at venture capitalists: who is backing game startups? Noone. Game development, like show business, is very hit-or miss and the fact that many successful studios hav...
I've had an idea that tried to tie together game development and X-Risk reduction.
Alas, I stumbled on stage 1. But I think it could work. Eliezer is known to love writing, anime and I think visual novels too; and I think money plus the chance of advancing the cause could have seduced him into this project.
This was before Eliezer started Methods of Rationality. It turned out to be more successful that ...
Actually, porn has gotten a lot less profitable recently. There are lots of sites on which you can see lots of different clips without paying anything. It's also dirt cheap to make; all you need is a camera, someone to hold the camera, and a woman who's willing to do sex acts on camera. All the competition makes it very hard to make a living in the porn business these days; demand hasn't fallen, but supply is way up, pushing the price down.
Here's some more data on the eroge situation in Japan:
History of Visual Novels
Summary:
Written from the perspective of an industry insider.
Era 1:The PC-98XX series of computer's success, despite its inadequacies in processing power and special features had erotic games (Eroge) on floppy disks contributing to its success. (Note: He may be overstating its influence, but the (super?)majority of PC games sold in Japan are eroge, the PC game market is so abysmal that Fallout 3 had to get a fantranslation). For the most part, the eroge just consisted of go to girl -> pick up line -> sex, but this quickly got old. This persisted utnil a company relased Dokyusei (同級生 - Classmate) in 1992 which was the first to implement 'routes' and stop being a simple porn game. The sex was delayed until you had sufficiently wooed a single girl by picking enough correct choices. Each individual girl had a story associated with them and you couldn't just have sex with anyone you met.
Era 2: Hard drives are invented, Eroge acquire more of a story focus, with the release of Denpa game Kizuato in 1996 and ToHeart a year later. ToHeart is mostly notable for being the FIRST instance of a relatively story focused eroge becoming successful, so much it's considered a classic to this day. This paved the way for the modern Visual Novel: Greater focus on story and emotional involvement by the consumer.
Era 3: 'Crying games' are invented. Members of 'Tactics' stumbled on a formula, where a comedic and romantic first half is contrasted by a dramatic, depressing second half. They thought they had something, so they spun off into a studio named Key and made Kanon, a game famously well known for making people cry. it's in this era when the porn becomes less and less of a relevant element.
Era 4 and Era 5 mostly talk about how successful eroge have become, including exploitative examples of console ports (if you think DLC is bad now, try buying Baldr Force four times for about 100 dollars each. One of the releases contained what amounted to bug fixes only and survival mode) and increasing rates of adaption into anime.
The notable thing about this history is that the major players were usually the first movers to break the eroge = porn only stereotype. Of course, this took place in a much different market environment than the American video game industry. So at the very least we can conclude if you want to make a porn game, put no porn into it and make it story focused and emotional. Of course this would entirely depend on good writers and directing ability for a visual novel, which of course rules it out entirely as a viable option for Mr Founder here unless he plans to start another 10000 hours learning how to emulate obscure pornographic video games from Japan.
Production costs and break even points
Break even point usually occurs at less than 5000 (!) copies sold, with about 90 dollars per copy sold and 60~80% of that cost not taken by the distributor. Note that there is an entrenched section of the marketbase who will snatch up any new titles. Liarsoft In particular has somewhere around ten thousand diehard fans that will purchase anything they make (this is true because I saw it on a memo!) even if it's unfinished or a weird sumo wrestler fetish game. Survival rates don't look good though with only 20% of brands making it to the 8 year mark. Eroge studios tend to be a lot more fluid though, with many people hired on for just one or two projects and there are a lot of brands who reform under another name or are absorbed into a sister brand.
So yes, it's a bad option.
Although...
[JASTUSA][www.jastusa.com] has made a profit on (close to? ) every single one of its games, despite licensing costs, general headaches dealing with Japanese company redtape and risk aversion by buying up cheaply licensed masturbation only games translating them for cheap and releasing them uncensored. Recently they've been buying up fantranslators to do the work at an even cheaper price for the more story centric and text heavy games.
But yes, visual novels don't sell much, and even download stats for pirated fantranslation patches still only peaks around 20000.