no one yet answered me two things bellow,i guess it is hard to say but i guess you people have experience in it,i really dont know where else i could ask..and we really need those informations so that we get reasonable contract...

1.) how big percentage of profit we can ask? i need minimum percentage so that is still rational and also maximum percentage that we can ask on start (if we ask low they will give even lower)

2.) is it possible to make game complex as Legend of Zelda : A Link from the Past in 6 months? take in consideration that we are not starting now and also take in consideration that we never before made big game and we are not professional programmers (but we are gonna be in near future ,we hope)


i asked them can they give us contract with milestones instead contract that tells that we lose all if we dont finish project in time and they accepted..they say that they have contract like that with other team but if we want other conditions that it is ok and we will negotiate about it ...

> 1.) how big percentage of profit we can ask?

This is one of those "it depends". There are no template, guidelines, or standard for those kind of things.

You are being paid two different ways here. One is via the NRE (Non-Recurring Engineering) fee you get from developing the game in the first place. The other source is extra royalties from sales of a product; you don't have control over that process. Consider putting an emphasis on doing the game a profitable endeavor, with the possibility of added royalties as icing on the profit cake. In other words, resist the temptation to make the game for free in the hope of making loads of cash in royalties; odds are, you won't.

I can guess your next question already: how much should I ask for the NRE fee then? Answer: so what's your cost structure for this project?

> is it possible {...}. we never before made big game and
> we are not professional programmers

Given your expressed lack of experience and that of your team, I'd say VERY unlikely. Do you have a complete game design plan? Do you have a schedule everyone believes in? Does your team have a history of meeting schedules? You will increased your odds of succes by having a solid plan in place and have everyone committed to it. Consider this project as an opportunity to nail down the whole development process correctly, to evaluate and optimize your cost structure, and get relationships in place to be able to get another project in the future.

-cb

Quote: Original post by xraven13
1.) how big percentage of profit we can ask? i need minimum percentage so that is still rational and also maximum percentage that we can ask on start (if we ask low they will give even lower)

I already answered this one. In an ideal world, you wouldn't be risk-averse so you would ask for the same percentage every time. In the real world, the percentage must depend on the expected amount of sales, in order to hedge yourselves against the risk of selling nothing.

Quote: 2.) is it possible to make game complex as Legend of Zelda : A Link from the Past in 6 months? take in consideration that we are not starting now and also take in consideration that we never before made big game and we are not professional programmers (but we are gonna be in near future ,we hope)

It's not impossible, but it would be quite surprising.

Quote: i asked them can they give us contract with milestones instead contract that tells that we lose all if we dont finish project in time and they accepted..they say that they have contract like that with other team but if we want other conditions that it is ok and we will negotiate about it ...

I wonder if your contract could be exploited the following way by your team: say you're a team of six people. You create company "Engine" (who has no programmers) and company "Game" (who has all six programmers). The "Game" company then delegates five programmers and a half to the "Engine" company, so that they write an engine for that company. That company then licenses the engine for free to the "Game" company, where the remaining half-programmer writes the game based on that engine.

Should the game be late, the "Game" company must, according to contract, transfer all the game code it owns to the publisher. However, the "Engine" company, which has never signed the contract, gets to keep its entire engine code (if the "Engine" company had been Valve, and the engine had been Source, the publisher could not have asked to own the Source engine).

Quote: Original post by ToohrVyk

Quote: Original post by xraven13
1.) how big percentage of profit we can ask? i need minimum percentage so that is still rational and also maximum percentage that we can ask on start (if we ask low they will give even lower)

I already answered this one. In an ideal world, you wouldn't be risk-averse so you would ask for the same percentage every time. In the real world, the percentage must depend on the expected amount of sales, in order to hedge yourselves against the risk of selling nothing.

stuff is that even if we know much game will be sold (and we dont) i wouldnt know how big percentage we can ask..is it 10%,15%,20% etc..some people told me we can ask 50% , others told 20% etc...
and again if they tell me that they will sell that big amount and give as some percent it can happen they lied and it will have much bigger amount of sell...
that is why we need ( i guess) make that depending on amount of sales our percentage become bigger or lower ( i am not sure )..
Give me some numbers , percentages for different amounts of sales and with different prices ,so that i have something to negotiate..they will first sell game on internet and if it will be sold good then in dvd boxes...first in countrys next to us and then if will be sold good in europe and rest of the world..

This is your profit equation:

Profit = (NRE - CS) + (N x R% x P).

where NRE is how much you are asking to make the game, CS is your cost structure (i.e. how much it's gonna cost you to complete the game), N is the amount of units sold by the publisher, R% is the royalty rate and P is the retail price per unit.

Since you don't know P, you can bundle R% and P together so you have a royalty value in dollars R$. Hence you get:

Profit = (NRE - CS) + (N x R$).

You can easily plug this into a spreadsheet and runs some numbers to see where you stand.


> Give me some numbers , percentages for different amounts
> of sales and with different prices ,so that i have something
> to negotiate

Instead of one single royalty rate, you can spread the royalty rate across the sales volume. I'm making this up here just to give you an idea: 50% on the first 1000 units, 25% for the next units all the way to 5000, 10% from 5000 to 25000 units, and 5% for anything beyond 25000 units. Your cut is bigger on low volumes and that of your publisher is smaller. It's the reverse on higher volumes; your publisher gets a bigger cut than you. That's a strong incentive for the publisher to sell a lot of copies because they get a better cut per unit.

Again, if you make some profit by making the game (that's the '(NRE - CS)' part of the equation) then whatever you make on the royalty part of the equation is a bonus.

-cb

[Edited by - cbenoi1 on October 16, 2008 6:16:10 PM]

Even without a lawyer, you can tell them you consulted some experts and they advised you the conditions are not something you should accept.

Publishers often have milestones set; for meeting each milestone you get some amount of the money, and there are set penalties for being late. That might be something you suggest.

ok and how those milestones should look like , something like this :
-Minerva weapon working same like design tells
or much more specific? Or those milestones should be bigger parts? It would really help that someone got example of contract with milestones payment system.

> Or those milestones should be bigger parts?

With a detailed project plan and schedule, it's easy to see where there are natural 'cuts' in the schedule that could be made into deliverables. From those 'cuts' then simply write down what would be achieved at that point.

-cb