"Once the games are sold, either online, at a retail outlet, or through some other medium, the publisher usually shares a proportion of the profits with the developer in accordance with a previously agreed-to percentage called a "royalty."" My question is that how big is this "royalty" percentage usually?

only a few percent if I remember correctly.

our team were offered up-front + 3% royalties, which we negotiated to be up-front + 6%. This was our first project tho.

regards,
Jack

Oh it reads in the same article that it''s about 10 to 20 percent. Do you have other information?

Is it really that low? By the way what is up-front?


[edited by - constans on December 1, 2003 7:00:39 AM]

up-front - you get paid before any sales are made
And yes, it''s low. Especially now as economy is in a low. Might change a bit for better in several months time.

There are a huge range of different deals and hence a wide range of percentages. On a licensed game a first time developer might get zero % (but a good enough advance to make the deal profitable). At the other end a major developer funding their own game might get 35-50% in a co-publishing deal.

The average deal (publisher funds a full price game) would be 15-20%

Going down to the budget price point the percentage remains the same but the developer is usually required to fund the development.

The above figures are a % of Net Receipts.

It would be normal for a decent publisher to offer a guarantee (a minimum number of units they expect to sell) and to pay the royalty for those units in advance. - This might well be split along the lines of 33% on signing, 33% on delivery of master and 33% one month after release.



Dan Marchant
Obscure Productions (www.obscure.co.uk)
Game Development & Design consultant

As a matter of fact, Obscure, I am just reading about The pitch on your site and found some real intriguing things about the way it all works. However this all sounds a bit creepy. As a first time developer (speaking of my case) it will be quite a challenge to do any development without any funding in advance. I mean noone ever wants to work for free, right? And what''s even worse - usually any of the work done for free is not what you expect it to be. My question generally is what are the possible scenarios if I happen to close a deal with the publisher, having in mind that this deal should be closed by the means of representing them a game project documentation only. No demo shall be made because of the "free labor" reason I already mentioned. Is this up-front payment actually the funding you''ll need to secure the development process or the funding is to be provided separately? Thanks.

Welcome to the wide, wonderful world of Bootstrapping!

The way I''ve seen it work is that it''s kinda like tightrope walking and juggling at the same time. You line up the talent. You get them to commit *IF* you secure funding. You go to the publisher. You try to make the deal with the understanding that you''ve got the team once they provide the money. Ideally, you already have a really good idea of what it''s going to take, and what your team is capable of doing. Your publisher will need a similar level of confidence, and the more team members you can get onboard before you actually sign the deal, the more confidence the publisher will have that you''ll make good on it... etc.

It doesn''t get much better, either. A lot of independent studios --- "hired guns" for publishers doing contract work --- have to keep dealing with this problem as they go forward. They have to start interviewing people for positions that might not ever become available, because they are still trying to negotiate a deal with the publisher. If the deal doesn''t go through - or worse, if the deal goes through but they can''t find the manpower to make it work --- they are in trouble.

I''d assume that you''d at least need to have some form of prototype game before you approached a publisher. I can imagine that many people and ideas get rejected outright without a proof of concept of some sort.

Pro01,
Sorry but I don't know of any publishers that will sign up a first time developer that has no demo. The article at http://www.obscure.co.uk/the_pitch.shtml lists what you need if you want to get a publishing deal and this article http://www.obscure.co.uk/demo.shtml explains the importance of a demo.

quote: Original post by pro01
As a first time developer (speaking of my case) it will be quite a challenge to do any development without any funding in advance. I mean noone ever wants to work for free, right?

You're not working for free, you're investing in your business. If you intend to get paid for developing a game then it is a business and you need to invest time/money into it before you can hope to get anything out of it.

To get money from a publisher you need to convince them that you are creative, skilled and professional. You do that by investing the time/money to produce the items listed in the first article. If you can't can't do that then it is unlikely that any publisher will fund you because there are lots of experienced developers out there (with demos or finished games) and the publishers would rather pay them.

Dan Marchant
Obscure Productions (www.obscure.co.uk)
Game Development & Design consultant

[edited by - obscure on December 2, 2003 3:58:46 PM]