Project Management - This is probably the #1 issue faced by studios around the world, with special consideration for German and Austrian studios which tend to have fantastic project management resources and skills. Other countries tend to suffer from a lack of strong project management and tracking, meaning they have a hard time improving their speed and profitability.
Staffing - Always a top priority, training and retaining the best staff is difficult and instability within the games industry often pushes those that need more security in their job to other IT industries.
Content Fit - Studios that do a lot of work-for-hire are constantly trying to build their own IP, but often choose the wrong time to make the investment. It's a good general rule that for every 3-4 projects you complete, you probably have enough money in reserve to start pre-production on an internal idea. Then again, you need to have staff available and you shouldn't hire to prototype in my opinion. Use remnant time, but continue to track it so you know the real cost of the project.
Fluctuating Currency Markets - As new governments come into power, the stability of currency versus the world market becomes either an issue or an opportunity. Sometimes this is a real advantage where local prices remain the same, but studios are paid on international contracts. This is a time to build a war chest and prepare for changes as the rest of the world catches up to what their true purchasing power is in the country as well.
Market Changes - The market is always changing, so if you aren't following what's going on, you will probably miss the boat. Years ago when the retail purge of 2008 was happening and many B and A studios found there were no longer as many value product being built for consoles, most studios made the jump to mobile. Then the business model evolved and studios couldn't compete with true businesses being run in the sector. The jump to VR began. While VR is exciting, there still isn't an install base capable of supporting most game studios, which is why the platforms themselves were supporting the funding of titles to try to push hardware sales. The current trend is to move to digital console and Steam, but the challenges of discovery remain.
Lack of Publishers - Most emerging regions lack local publishing resources and know-how, which results in games never reaching their potential. We work to build studios into self-publishers and distributors and provide that external guidance and expertise so opportunities can be capitalized upon.
Lack of Funding - Most regions have a couple VCs that have dipped their toes in the water of investing in game studios. These are usually the first, largest, or most connected studios, but often don't have the best potential to return the investment. This hinders second wave companies from getting access to capital. Mezzanine funding (post seed, friends and family, or Series A) is often non-existent meaning without a hit game, the studio is done or converts to looking for work-for-hire projects.
So there are some of the challenges, but there are a lot of opportunities mixed in.
Lower Costs - If you can build cheaper, and at acceptable quality, there are a lot of buyers.
Unrestrained Creativity - Without funding and more established expectations, or even market viability research, studios sometimes create real gems that with the right help can reach their full potential.
We're always looking to work with new studios that are doing great things, so if you think you are ready to address the issues and embrace the opportunities, get in touch.