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Is it better to be a freelancer or an employee in the video game industry?

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In this episode of Game Industry Career Guide Podcast, I answer a question from Mihai, who asks, “Is it better to be a freelancer or an employee in the game industry? I’ve read some articles about this but they didn’t offer me enough information to actually make a definitive decision.”

In this episode, you’ll learn:

  • The difference between an employee and a freelancer
  • The pros and cons of being a freelancer, and how it affects your financial stability
  • The best way to successfully start a career as a freelancer

If you have a question you'd like to get answered on the podcast, leave a comment below or ask me anything here.

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Happy New Year! Welcome to the Game Industry Career Guide Podcast. This is episode number 28. I’m Jason W. Bay from GameIndustryCareerGuide.com, and this is the podcast where I answer your questions about getting a job and growing your career making video games.

This week’s question comes from Mihai, who emailed me to ask this. “Is it better to be a freelancer or an employee in the game industry? I’ve read some articles about this, but they didn’t offer me enough information to actually make a definitive decision.”

Okay. This is actually a complicated question, so I’m not surprised that Mihai had a hard time getting a clear answer from his research on the web. But it’s also an important question because your choice will impact your job opportunities, your taxes, your paycheck, and your overall financial stability in the game industry. So, let’s break it down.

For starters, many people even inside the game industry are confused about the terminology. So let’s clarify what we mean by the term “freelancer.” A freelancer is a worker who is not an employee of the game studio. Instead, the freelancer and the studio creates a contract, a legal document that defines what work should be done, when it should be completed, and how much the freelancer will be paid for that work.

The work could take a few weeks for a short contract, or it could take several months depending on the project. A more common term inside the game industry is “independent contractor.” So, you’ll hear that. But you will also hear the term “freelancer” too. They’re usually talking about the same thing.

By the way, everything we’re talking about today will vary from country to country, and maybe even state to state. So I’ll be talking mostly about how things are done here in the U.S. I’m also not a lawyer, so you should consider talking to an attorney or other legal expert before making any decisions like this that would greatly affect your employment and your income.

Okay. Now that we’ve defined the terms, what are the important differences between a freelancer and an employee? There are several differences, but here are the three that are probably the most important to know about. Number one is that freelancers must pay for their own health and medical benefits. When you’re an employee, the company usually pays those for you. But when you work as a freelancer, you need to sign up for your own health insurance and pay for it out of your own pocket. That’s not a trivial expense. Health insurance could cost you a few hundred dollars per month, and you’ll need to pay it even during months when you might not have any actual income from your freelance work.

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Number two is that freelancers must pay their own taxes. When you’re an employee, the company just automatically takes the necessary taxes out of your paycheck so you never need to worry about it. They might even pay certain taxes for you. But as a freelancer, you need to pay those taxes on your own, and there can even be additional self-employment taxes that you have to know about. So, if you go the freelance route, be sure that you understand the tax situations so you don’t get in trouble for not paying enough taxes.

The last key difference between employees and freelancers is in job stability. As an employee, you don’t need to worry about where your next game project is coming from. It’s the company’s job to start new projects, and then keep your workload full so that you can be productive. You just come in to work, you do your work, and you go home. But as a freelancer, you always need to be searching for your next gig, even when you’re busy working on your current project.

So that means that you’ll need to be finding new work through networking and maybe advertising, sending out your portfolio, and so on. You need to have your next gig lined up before your current gig is finished if you want to keep that income flowing in. Otherwise, you’ll have a gap between projects and you won’t be making money during that time. Some freelancers even work on more than one gig at the same time, which can be harrowing. But it does help your financial stability.

So, in short, as a freelancer you are your own little, one-person business. You’re responsible for your own benefits, your own taxes, and your own business development. If being a salesperson and drumming up new business doesn’t sound like something you’d excel at, or if a higher degree of instability kind of scares you or stresses you out, then freelancing might not be for you.

So, why would anybody even want to be a freelancer? Well, first off, you can get paid a lot more per hour as a freelancer. For example, some freelance game programmers that I know of, they make well over $100 an hour, which is much more than they’d make as regular employees. Secondly, there’s the flexibility of working when you want, how you want, on projects that you choose. You’re your own boss, and a lot of people prefer that lifestyle so much that it more than outweighs the other annoyances and instability that come with being a freelancer.

Finally, some jobs in the game industry can be hard to get as a full-time employee. Jobs like music composer, sound engineer, and different writing jobs, they’re traditionally handled by freelancers. So, if you’re looking to do one of those jobs, you might consider freelancing at some point in your career because full-time employment can be a lot harder to come by.

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There’s one more thing that I want to mention about this, and I think this will answer Mihai’s question directly. If you’re just starting out in the game industry, I would recommend starting as a full-time employee, instead of a freelancer. And then, becoming a freelancer after a few years if you think that that would appeal to you. Why do I recommend that? Because working on a game team full-time for a while will give you experience and help you grow your mastery of your skills set, and build your portfolio of shipped titles.

That will come in very handy when you become a freelancer later on, and you’re trying to convince companies that you’re worth the money. Because it will be very difficult to get hired for freelance jobs if you don’t have a track record of shipping games. It’s just too risky for a game company to try you out. Also, because working in the game studio will help you build your professional network. Those people that you meet and work with at the game studio, they will play a key role in helping you find work and get gigs when you become a freelancer later on, which will make your sales efforts a lot easier.

Lastly, working full-time for a few years will give you a chance to save up some money to use as a financial safety net, in case you’re ever unemployed for a month or two between freelance gigs. Let’s be honest. It will probably take many months of effort before you’re booked solid as a brand-new freelancer. So, you’ll need all the help that you can get from your contacts in the industry.

The most successful freelancers that I’ve known over the years started as employees. So, for all of those reasons I’ve already mentioned I strongly recommend that you consider doing it that way too. Start as an employee. Get some experience. Build your network, and then become a freelancer later on if that lifestyle will work for you.

That’s an overview of the pros and cons of being a freelancer versus a full-time employee of a game studio, along with some ideas on how to get started. Thanks to Mihai for this week’s question, and thank you for hanging out with me today. If you have a question that you’d like me to answer on this podcast, stop by the website and leave a comment or just send me an email. For more information and inspiration on getting a job and growing your career making video games, visit me at GameIndustryCareerGuide.com. I’m Jason W. Bay. Let’s meet up again next week, right here on the Game Industry Career Guide Podcast.

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READ: Start Your Video Game Career

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