2 hypothetical questions - if you have been working on a game, from a suggestion by a publisher, and no contract has been signed and no money has been advanced to the developer for it, is the developer still liable to sell it's game to the publisher? and if the developer has finished the game with no financial help from a publisher and the publisher offers to buy it with a lump sum and some royalties - does the publisher recoup the lump sum first before the developer is due any royalty payments or do the royalty payments to the developer kick in straight away? any help or pointers in the right direction is much appreciated, thanks.

Quote: Original post by evelyn
2 hypothetical questions - if you have been working on a game, from a suggestion by a publisher, and no contract has been signed and no money has been advanced to the developer for it, is the developer still liable to sell it's game to the publisher?

Ignoring the fact that you should never, ever work for someone without a contract the answer is "maybe". If it is a license they own or their IP then you are probably stuck. If it is an original game and they just said "we would like a Hippo juggling game" and you then went and wrote one then you can do what you want with it. If however there was a verbal agreement that you would develop it and they would publish it then there is a risk that they may try to sue if you take it elsewhere. Unfortunately even if there wasn't a verbal agreement they might claim there was - then it just comes down to who can afford the legal fees.

Quote: if the developer has finished the game with no financial help from a publisher and the publisher offers to buy it with a lump sum and some royalties - does the publisher recoup the lump sum first before the developer is due any royalty payments or do the royalty payments to the developer kick in straight away?

Money paid is almost always royalties, regardless of when it is paid. A development advance paid prior/during development is usually an advance against future royalties - that is why it is recouped from royalties once the game goes on sale, because you have already had those royalties. Likewise a lump sum paid on a finished game is usually a "guarantee" - meaning they guarantee to sell a minimum of X units and pay you the royalty for that up front. As before you now have to actually earn those royalties from sales before getting any more.

I can only think of a couple of times when I would envisage getting a fee that wasn't recoupable. First would be on a no royalty deal, where you sell the game outright and second would be if the fee was actually for something other than just the game (such as a one off payment for ownership of the IP).

Thanks for that, I suppose I was expecting that answer, however a bummer it is!.

if a negotiation is settled between publisher and developer regarding q2 above and the developer goes out of business fairly soon after delivery of product, what happens with the royalties that will surely accrue once the game is fully on sale? Do the royalties go straight to the publisher only or can the revenues go towards paying back debts accrued by the developer?

confused :(

Accountancy law isn't really my thing but from previous companies I know that went bust it depends.
If they just go bust then they don't exist and the publisher keeps the money. If they go into administration (someone is appointed to manage the company and distribute assets to creditors) then in theory the administrator would collect money owed and pass it on to creditors. However they charge a lot for this so if the company is small it would never happen. In addition there are different levels of creditors and the little folks at the bottom of the list would likely never see a penny.

Of course if a company goes bust a creditor could step in and buy it up/buy rights for next to nothing and end up owning the projects and any royalties owed (if the contract between the dev and pub is assignable).

Thanks Dan for the info, things clearer now :)

evelyn

How is development going on Gasoline?

The screen shots on your site look quite stunning! Will Kuju be selling this title, and all your other upcoming games? Or are you looking for a better deal?

Haha!..if you wern't an AP I wld PM you!

Our website is out of date now as the current project we're doing is not on the list but Gasolene does look fantastic and the game design is awesome - it was something that was pitched to 2 carriers for 3g and, although they are extremely interested, sad to say it's on the back-burner just now as we'd need development money up front and they're concentrating on other things at the moment, but we're still hopeful that, one day, we can get to develop it.

Regarding publishers, we would be looking for deals with any that are interested in our games. Our next 3 concepts are being worked upon as we finish up our current project, so it is hoped that we can get several publishers interested in the very near future....so, if you know of anyone you could let me know! ;)

Have a nice day