Developing passive income streams to fund your game development
TLDR: 15 years ago I left AAA racing game developer, Ratbag, to form Hyperfocal Design, which sells only sky textures (hemispherical sky photos). I've since been able to develop indie games mostly full-time using the passive income.
From 3D in high school to race tracks in games
I was in high school when I began working with 3D software, and this new obsession eventually landed me a job at Ratbag. While there, I helped make tracks for the PC racing game Powerslide, and designed Dirt Track Racing.
We made it part way toward an unreleased car combat game that looked a lot like GTA meets Mad Max, before I left to form my own company. I'd been inspired by reading Robert Kiyosaki's book, Rich Dad, Poor Dad.
Leaving game development to start a business
With a little background in photography, and experience using textures in 3D, I somewhat blindly jumped ship with the thought to make some random texture maps and sell them on Turbosquid. I drifted towards doing skies, because no one looked at me like I was a big weirdo, as they would when I was taking photos for dirt textures! Plus I could go to the same location every time and get a different end product!
To fund the business, I sold my Nissan Silvia sports car and promptly ran out of money a year later(!).
After scraping the bottom of my bank balance for another year after that, Hyperfocal Design began making decent money, and since that point has been a fairly solid, reliable source of passive income, meaning I don't have to actively work on the business to make money. That's only partially true, of course, since the longer I neglect the business, the less it gets promoted, the less updates go out, the more competition comes in, and the less money I make.
...went something like:
5 years at Ratbag
2 years of scraping through to get Hyperfocal off the ground
A few more years doing well (during this time, Ratbag 'went under' - closed by the publisher, Midway)
A year trying my hand at professional poker (I really love the game, but boy is this a stressful career choice!)
A few more years at Hyperfocal
After getting a real creative itch again, went back to developing games with Saxon Druce from Ratbag
A few years of making Zombie games with Saxon before parting ways
1 year creating Unknown Orbit, solo (first Unity title)
1 year back to Hyperfocal
1 year making prototypes + vr prototypes
Now: Over a year working on Exo One
During this time, I very rarely ever worked on Hyperfocal every day, except for the latest 1-year stretch. Mostly I'd put in a few months here and there, which allowed me more time to do whatever else I liked - semi-professional poker, training for triathlons, traveling, surfing, bread making, and whatever else I was interested in at the time.
While I've been comfortable from Hyperfocal's income, it doesn't bring in the big dollars or allow me to hire employees or anything like that. But with a pretty low-key lifestyle I haven't had to worry too much about money, while simultaneously not being chained to a desk 8 hrs a day. I'm also confident that if I had a higher income target, I could have certainly made it happen (as I did recently in 2015 where I dedicated the whole year full time).
When Ratbag went under, I was particularly glad that I'd gone and formed a business where no single entity (a publisher in this case) could 'fire me' or cut off my entire income stream. For Hyperfocal to die off, I need to lose every one of 100's of customers a year, which isn't likely.
Back to games
So since I began making games again with Saxon 8 years ago, I've been mostly making indie games while Hyperfocal pays the bills. If Hyperfocal ever started declining too much, I was perfectly free to take some time to prop it up. I wasn't forced either way to do one or the other, and I was never at risk of sudden and complete income loss.
I've also been fortunate that the zombie games we worked on together contributed a little to some additional passive income, which has certainly been a nice additional safety net.
Setting up your own content creation/passive income streams
If you're a game developer, or someone with skills in 2D/3D art, coding, sound, music, etc, there are good opportunities to create niche 'content', plugins, assets, etc that may help supplement your income, or fund your lifestyle entirely. Especially since so many game developers use Unity these days.
If this sounds interesting to you, I'd ask myself:
Where do my skills lie
What do developers need (in my case, choosing skies was a nice choice, since so many games take place outdoors!)
What niches are under served or don't suffer as much from multiple, similar assets.
What could I teach? (unless you're a complete beginner, there's people out there who know less than you!)
I'd personally (as an artist type!) look at assets that tick one of these boxes:
Don't require constant updating as new Unity versions come out (or even assets that are completely untied from any software)
Can be sold for a higher price. Lower prices typically = you dealing with more support issues.
Has a creative aspect that can't be easily copied (so making yet more 3D, real-world gun models would probably be a poor choice! )
Since working on Exo One, here's just a few things I've noticed, which may or may not be of interest:
Substances and procedurally generated textures are now pretty amazing, and there's not enough of them
Despite already having music in the game, I get a deluge of emails from musicians wanting to help (good luck, musicians!)
But zero emails from voice actors, despite, as above, already having voice/story/narration in the game
"Sim-lish" https://www.youtube.com/watch?v=u1_NVYPMmhE (voices that sound like a language, but are just gibberish, to go with text), is popular in games, but there's zero libraries out there as far as I can see
Real time volumetric skies are starting to look rather awesome!
Having decent support and response time from plugin developers is incredibly important, especially when so many people like myself are solo or small teams that rely on that support to put a game out.
Ensuring plugins work with other plugins is pretty huge
Platforms like Patreon and Kickstarter can help you get things started
To end with, I'll just say I'd encourage you to think about whether you have some skill that you can use to create products to help create your own passive income streams. As real-time graphics have gotten increasingly realistic, often a product or 'content' can also be sold to people in film/vfx and architectural visualization as well.
Depending on your skills, products could include art assets, sound/music libraries, plugins, a course where you teach something, etc.
Market your stuff!!
Perhaps the biggest challenge these days with almost anything, is that everyone is doing it - you will absolutely need to do some marketing and promotion! I also encourage you to put your face and name behind your business, to give it a personal angle.
Throughout Hyperfocal Design's life, I've rarely put much if anything into promotion for my products, outside of sending an email to my newsletter. "Back in the day", I got by with newsletters + Google search, but you can no longer guarantee a good Google placing. In 2015 when I finally decided to stop being a wuss-bag and actually market Hyperfocal's latest product, I had my best year ever! It is hard, and your ego is on the line, but power through!
I'm currently Kickstarting Exo One, and the campaign is now in its final days. If you like the look of it, please consider spreading the word, thanks!