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if you had the time and money and man power of a studio would you make this game in 2.5d bitty?

Probably not. That massive book I wrote aside, I'm just not a fan of the style. If I had a bunch of people and money to work with, I'd probably put it toward: 

1. Faster production of what I make now. 

2. Higher quality of what I make now. 

3. Parallel production (more than one thing cooking at a time, although this may just be a version of #1.

4. Possibly exploration of simple 3d games, playing to the strengths of the medium.

5. Some limited degree of merchandise.

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Mezz fleshlight?????

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I was thinking more something like this. Lots of possibilities though.

something like that would be cool,,, but nekobb has a point XD

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But in all honesty a poster would be cool af

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Posters are another possibility, and high probability if I do anything because it's fairly simple to do and has a high likelihood of having room for a decent profit margin. As far as sex toys go, especially fuckable ones, my feeling is that they tend to be very expensive for something that wears out fairly quickly. As with the games themselves, I'd want to sell stuff (at least for the first few items) that was fairly accessible to people budget-wise. Also less health/safety concerns: I'd have to be REAL careful if I was selling toys that they were actual quality material and not contaminated with some shit. 

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Yeah I dont think toys would get very far. Did you have an idea when merchandise would be considered?  Like after chapter 3 or all five chapters?

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Probably will ponder some possibilities after initial release for Chapter 3.

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I've seen artists who've done collabs with sex toy companies with their characters like Braeburned and Twin Tail Creations. I don't know what the revenue sharing is like though. I remember one artist saying they got approached to do this once and all they would have gotten is a free copy of the toy? Which is neat but not exactly a great deal.

Yeah, that would be silly. The whole point would be to do an ongoing profit split. But again, silicone  ain't cheap, and with small-run stuff like this even more so because you don't have the economy of scale. So again, I'd probably target other, simpler stuff. That's in the future though, gotta focus on actually getting the first release of the game out first.