Submitted Dave Astle, Sep 10 1999 11:45 AM | Last updated Sep 10 1999 11:45 AM
Advance on royalties. Money given from a publisher to a developer to create a game that will be recouped from the developers royalties on sales.
For instance, if a developer is given $25,000 as an advance to create a game. When the developer is finished with the game and it is sold, the developer will not recieve any money from the sales royalties until the advance has been paid back.
So if the product is retailed for $30, and the net proceeds for the publisher to sell the game is $15 and the developer has a 10% royalty, the developer will recieve $1.50 for every game sold. Before the developer recieves any money after the advance the game will have to sell 16,667 units ($25,000 / $1.50).