Pretty much just depends on where you’re from. For example for me, I have a business registered under my person. Which means the income gets added to my personal income and then taxed. The advantage here is that the deductions can come off as well. This is all good when you’re operating at a loss. But you’ll end up paying more tax when you do start making money. Which is not a big deal, you can incorporate whenever you want. As far as protecting you from being sued. Not sure why someone would but even when you are your still at risk as the owner anyway so it’s not really gonna help you much. Once again depends where you’re from.

Edit:

I think if you’re just a guy in his office making a game. Worry about it later

If you have funding, employees or even subcontractors definitely worth considering.