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Client work: $20 per hour or 6% of a game's sales? which to choose?


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#1 Mrlemonyfresh   Members   -  Reputation: 102

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Posted 15 March 2013 - 08:13 PM

Hey. I have some friends who have just started a business, one of who i was going to uni with who I'm going to call John for the purpose of confidentiality. The other guy (who can be called Hank) is still completing a business degree.

Me and my other friend (who can be called Jason) are working for them in a client relationship despite the fact that the game was essentially our major project at UNI and we are continuing with it. On a side note I'm in the right forum yeah? this is about working for someone in a time where i'm fresh in the industry and I don't own a part of the company.

Me and Jason did by far the most work on the major project prototype, and Hank was not involved in it's production.


John is the game designer, project manager and writer for the project.

Hank is a legal consultant, business man and marketing director.

There's me, concept artist, modeller, texturer, rigger and animator,

And Jason who programs and helps a bit with game design.


My full time job employees who are a game company forbid me from making any more than a polished alpha build with my friends so there's about 9 hours of each 19 weeks for me to work on this part time.

John has offered to pay me either $20 an hour or give me 6 percent of the game's revenue. If I picked the former, he'd give me the total $3420 as soon as the 19 weeks were up and I'd finished all the work (which will be tricky with the amount of work).

If I picked the latter option I could be waiting an extra year just for the game to be complete. By that time the game would probably make no more than 100,000 over a period of half a year I'd guess. If it did make that much I'd get a slow $6000. John doesn't seem to be confident that their net earnings will top that 100,000 mark.

Thoughts? advice? tips?



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#2 Servant of the Lord   Crossbones+   -  Reputation: 20921

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Posted 15 March 2013 - 08:57 PM

I am not a laywer, nor have I been to college (so no student loans):

 

A hen in your hand is worth two in the bush, as the saying goes. $3420 would probably be very useful to you just out of college. If you can, I'd recommend putting the entire chunk of it to pay off part of your student loans, which over the course of the next several years, would probably save you an additional $500 in interest (free money. Or rather, free interest you no longer have to pay). Plus you'd pay off your loan several months sooner, which would probably feel very good.

 

In a year, the project could've been canceled and you'd end up with $0. Get it in writing that you get your $3500, whether the project sees completion or not. Get monthly payments for it, so even if the whole thing goes bottom-up, you still have whatever you already managed to get. If you don't get paid, refuse to give anyone permission to use your artwork and concepts.

 

I wouldn't be confident that the net earnings would top $100,000 either, simply because most games don't make that - but I haven't seen the game.

 

On the other hand, you've made the artwork for fun and for educational purposes. If you get even $100 for it, that's a plus.

If that game suddenly makes a million bucks, good for them! But do you want $3500, or a lottery ticket? If you want to really hedge your bets, write on a piece of paper a plain-english agreement:

 

I, <blah>, get $3500, paid over the next seven months in chunks of $500 starting April 2013. If the game makes over $100,000, then I get 3%, otherwise I only get the $3500 previously mentioned. In exchange, I give <otherperson> the non-exclusive rights to use <specific artwork and specific assets> in <specific game>. If <otherperson> fails to release the finished game project within two years, the rights to that artwork is returns to me.
 

Signed: ________(me) __________ (him) on __________ (date),

Witnessed by __________ (witness A) ___________ (witness B)

 

 

Again, I'm not a laywer, nor do I run a business - I'm just a hobbyist trying to go indie. I'd take the $3500 today over a promise of $6000 tomorrow, unless the person has a track record or I can see for myself the likelihood of that person really significantly succeeding. smile.png

 

Ofcourse there's the issue of the friendship as well. Is the friendship more valuable to you than the $3500? Then you aren't going to sue him if he doesn't pay, and also you might want to avoid discouraging him by saying or implying that you think he will fail. 


Edited by Servant of the Lord, 15 March 2013 - 09:25 PM.

It's perfectly fine to abbreviate my username to 'Servant' rather than copy+pasting it all the time.
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#3 Tom Sloper   Moderators   -  Reputation: 10148

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Posted 15 March 2013 - 10:50 PM

Servant gave you a number of options. You should make a decision grid.

 

My two cents: I don't think you can count on the game actually making money.  The $20 is assured.  The 6% is not. 


Edited by Tom Sloper, 15 March 2013 - 10:50 PM.

-- Tom Sloper
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Please do not PM me. My email address is easy to find, but note that I do not give private advice.

#4 C0lumbo   Crossbones+   -  Reputation: 2493

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Posted 16 March 2013 - 12:56 AM

Commit yourself completely to deciding this on the flip of a coin. Flip the coin. If the result of the coin flip makes you disappointed then switch.

 

Seriously though, you have a job and you have no dependents, you can afford to look at this work as a fun hobby that has an outside chance of making you rich. If you think that there's a reasonable chance of this thing earning >$100000 then go for the 6%.



#5 shadowomf   Members   -  Reputation: 323

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Posted 16 March 2013 - 03:03 PM

I would also recommend to you to take the per hour payment.

 

However I would also recommend to you, that you don't work on it for free and then expect the complete payment at the end.

Just let yourself get paid per month (or week if this is more common in your country), as "Servant of the Lord" suggested.

 

Make sure you bring all important parts of your agreement to paper and get them to sign it.

What's important? What you will get, what you will have to deliver, in what time frame you have to deliver and how it will be decided if you have delivered your work in the before mentioned time frame (e.g. make sure everybody has the same understanding of an alpha and about what you will give them).

 

By the way, even though alpha sounds like an early stage, it's actually much work and much of the game has to be finished to actually be called an alpha. Make sure you don't underestimate the time you will need to get it done.

 

And some other things you should do:

 

-Don't promise stuff you wouldn't want in a written contract. In many countries even a vocal agreement is legally binding.

 

-Make sure you do tax the income properly and pay the relevant insurances (social, pension, health care, unemployment, ...). If your employer is legally entitled to do so, make sure your friends are paying the necessary insurances.

 

-If you go the route with the monthly payments and they don't pay, make sure to contact a lawyer (even better, contact a lowyer before you enter an agreement with our friends). In some cases even if they don't pay you fast enough you will still have to keep working, you can't just quit or stop working just because they didn't pay you last week (milestones would be one way to solve this problem and will also give you a better way to notice if you're behind schedule).

 

-If they are forming a company you could also ask for shares instead of the x% of the games profit. It could be more profitable in the long run.

 

-If you take the x% of revenue road, make sure you did understand what part of what earnings you will get. Don't let yourself get screwed, take x% from the sales (before any cos where divided). Else they can use all kinds of cost to reduce the money you would get, e.g. by marketing cost or by discounts.

 

-If you don't like any of their offers, there is always the choice of not participating, which is also okay. Maybe you could spend the time that you would use for this project for something better, let it be family time, a more interesting project or just relaxing at the beach. You just have to decide if you want to use the done work for yourself, let them use it for free or wish to sell it to them.

 

-And of course you could also ask for more $/hour or %. Try to estimate how much work you will have to do, what cost you will have, if you want to do it for the money of maybe just for your portfolio (make sure you have the rights to use it in your portfolio in any case) and how much of the money you own will end up on your bank account. Then decide how much money you think you (your time and work force) are worth. I believe 20$/hour ist pretty low even for a graduate. But you will have to decide yourself.

 

However you decide, I would love to hear about the outcome.

 

And of course I wish you best luck.

 

ps: sorry for all the commas and braces... (It's just that I always find stuff that I wish to clarify, in case my English explanation wasn't good enough.)



#6 Mrlemonyfresh   Members   -  Reputation: 102

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Posted 17 March 2013 - 03:27 AM

Thank guys, all really good advice and I really apreciated the time you've taken to offer your tips and advice. I think I'll be taking the per hour route, it's been made really obvious that them hitting a 100,000 mark on the first go is very unlikely, so i guess that's all there is to it in this scenario.

 






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