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TheArtifex

"Selling out" (IP assignments in exchange for credit: is it a job?)

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Greetings. Just as a quick background check: I'm an indie developer over at Trillæm Productions, and I'm trying to learn the ins and outs of the publishing/marketing aspect of indie development. I don't have a ton of experience, but I do have a pretty good idea of what I'm doing, and I've been very fortunate with a team that shares my dedication and passion for the project, as well as being very talented in several fields. I've looked around at some of the other posts here, and found a handful of very helpful posts related to self-publishing vs external publishing. However, there is one major concern that I have with external publishing, and I'd like to hear some more experienced takes on it. You see, the game I'm working on is just the first in what I'd like to develop into a franchise. And, just like any other developer, I'm very attached to my creation, and would never want to lose full and exclusive rights to do absolutely whatever I want with the franchise. If this were just a one-time deal, I wouldn't be so worried about it. But it's not. This is a beginning of a franchise that is not only very important to me as my creation, but very important to me because it's something I'd like to continue working with, and would ultimately like to build a career around. I don't want to be told what to do by a publisher, and I don't want to give 65% of our profits away for some big-wig to do all the shipping and handling. I do enjoy some of the more "paperworky" aspects of project management, including public relations, marketing, and advertising. I, personally, see external publishing as the "easy way out", and also a very easy way to lose a lot of profits to a middleman. Finally, and what I'm most unsure about: I don't know what kind of ownership the publisher retains over the franchise when I publish through them. Do they obtain ownership, as well as a percent of the profits? Is it a case-by-case deal? If so, what publishers will let me retain full and exclusive rights to my work? All I know is that I don't want to sell this franchise out to anyone. I want to maintain complete ownership of it as a team, and, ultimately, as that team's leader- even if it means having to publish it myself. [Edited by - TheArtifex on December 19, 2004 1:31:35 PM]

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Hi, I can only go on our company's experience with mobile games, so I'm not too sure if this would be relevant for you.

We go through a publisher who gives us 40% of NET revenue and we keep the IP. The current game we're developing has the same conditions...even although it may be branded once it's finished, it's still gonna be our IP.

The publisher had some input to our first game (changing collision detection and a couple of other wee things) and a 'wish-list', although the 'wish-list' is just that, if we didn't want to or did not have the time to do any of the 'wishes' then we didn't need to, as long as we got everything else right for them.

Perhaps you should pm Obscure and ask his opinion - the more info to hand, the better!. Good luck!

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I have found that most deals are around a single title, and that the developer generally keeps all their IP. Of course, there are always exceptions, they key is to shop around, checkout all your options. If you don't like a deal, don't take it.

The other side of that coin, however, and something we have run into with some people who wanted us to sell for them, was IP association. Not only did they want to maintain all their IP for future releases, they didn't want consumer association of the current IP to anyone BUT them. This would have forced us to brand out sales site for the product to look as if it was the developers, with no cross market to our other products. Was a bit too much to ask, since with this small volume market, single titles that don't generate cross pollination to other products don't really make much for the publisher/distributor.

Anyway, good luck!

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I agree with the previous posters on intellectual property, but they havent touched advertising and marketing.

Should you decide to advertise, market and sell this - at a profitable rate - you're going to need a lot of capital to reach enough people. There is a reason why publishers take 65% of the profit, partly because they can, but mainly because the advertising costs outweigh the development costs.

Advertising is expensive and the large cut takes account of this. For example an local magazine, with a reader base of about 200,000 and age demographic of about 25-35 charges $15,000 AUD for one full page ad, in one month of their magazine (its only printed once a month). $15,000 for a start-up company is a lot of money, and thats probably the cheapest advertisement you'll come across. From $15,000 and a potential 200,000 readers we rise to upwards of $50,000 to reach a possible million for just a simple web based campaign.

Not only is advertising expensive it also requires some expertise just like software development. Maybe for this first game you let someone else handle the publishing and your next title, you can do it yourself. A good publisher will have years of experience with marketing, sales and distribution. Which means a good advertising campaign is only half the package, the next half of the package is their relationships with distributors. Developers usually don't know any one in a position to get their game out there through retail outlets. Publishers on the other hand have established links, know the right people to talk to, and also have some level of credibility behind them.

Of course you could approach the retailers themselves with your finished (when i say finished i mean finished, no glitches, no bugs, no unfinished artwork) product in an attempt to sell it to them. Make sure its well polished and gives them an enjoyable experience. Don't make a mistake i once did, don't take an unfinished product to a person used to saying NO. Any sign of an error or bug and thats exactly what you will get. However, i hope if you do take this route, which i encourage you to do so after much thought and consideration, remember you'll have to pay to package and mass-produce the software. A minor corner stone in the sale of your product.

So, step back assess your situation; remember your strengths and weaknesses, software and marketing respectively. Its probably a good idea to get someone else to do the marketing for your first product, and if you plan (and it sounds like you do) to handle some of the marketing yourself do this for the next one. Just pay close attention to whats done in selling your product and if it worked or didn't. On the other hand, you're going to need a lot of capital if you plan to market the game by yourself. Checkout http://www.sba.gov/starting_business/index.html to help get you started. A business plan will be your first step to success. As an example business plan i found http://www.bplan.com/spv/3250/index.cfm?affiliate=sba usefull.

Good luck, its always good to see fellow entreprenuers!

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If I told you that one of our coders, a self-made millionaire, was willing to fund our startup costs up to $60,000 (and has noted that he would be willing to fund even more if the startup was at all successful), and that several members of our team (including myself) have received awards in a university setting for graphic arts (and, specifically, for advertisement-type graphics), how would that affect your stance on self-marketing?

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A self advertiseing investment of $60+k, along with great artistic imagery is a waisted effort if you reach the wrong consumer base....there is more to it then just reaching the largest number of people...you have to get your advertisements in front of the people whom are most likely to be interested in your game....yeah you could reach a lot of people with a full page ad in EGM...but, while EGM subscribers are definetely interested in games, are they the type whom would be particularly interested in your game?



Besides $60k, while a lot of money, isn't enough for even rather small scale national grass roots (word of mouth) type advertisment campagins.

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You haven't provided any information on what type of game it is, how you intend to fund the project to completion (beyond the start-up phase) or how you intend to bring the product to market. All these issues make a massive difference to what you should do and what you will be able to achieve with $60,000.

What format is the game going to be on?
Will it be shareware/download or retail?
How do you intend to fund the venture through to completion?
What games are you expecting it to compete with, shareware quality game or AAA full price retail block-busters?

Quote:
I don't want to be told what to do by a publisher, and I don't want to give 65% of our profits away for some big-wig to do all the shipping and handling.

Publishers do an awful lot more than just shipping and handling.

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Quote:
Original post by Obscure
You haven't provided any information on what type of game it is, how you intend to fund the project to completion (beyond the start-up phase) or how you intend to bring the product to market. All these issues make a massive difference to what you should do and what you will be able to achieve with $60,000.

What format is the game going to be on?
Will it be shareware/download or retail?
How do you intend to fund the venture through to completion?
What games are you expecting it to compete with, shareware quality game or AAA full price retail block-busters?

Quote:
I don't want to be told what to do by a publisher, and I don't want to give 65% of our profits away for some big-wig to do all the shipping and handling.

Publishers do an awful lot more than just shipping and handling.


First up, a sincere apology for the underrecognition of the value of publishers. I perhaps am bashing them too much for something they don't deserved to be bashed for. I'll try to maintain an unbiased opinion.

Secondly, please keep in mind that I want to pose my situation in the light of legal/business advice, as opposed to other forms of advice that might be more suited to the Help Wanted board. ^^

Anyway, the game is a 3d fantasy MMORPG. The game would be expected to compete primarily with other popular indie MMO titles along the lines of Eternal Lands, although we would be very interested in expanding beyond the indie market into the commercial realm, where we'd be facing games such as International Ragnarok Online. Software licenses are being covered by our resident millionaire, along with personal investments by myself and other team members. He will also be providing us with free servers until we reach a point of self-sufficiency. All team members work on a royalties contract, so salaries are not an issue until we "publish".

The game is built using SDL, which is crossplatform for Mac, Windows, and Linux. It will be free to download and play up to level 10 (/100), and playing costs for the full game are probably going to be ~$9/mo.

Any other questions that will help as you give advice? Thus far, I've received a lot of very useful tips, but you can't ever have enough advice.

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Quote:
Original post by TheArtifex
... until we reach a point of self-sufficiency.....

From a business point of view this is the single biggest issue. When will you actually start making money.

Development starts
Lets assume that the whole team are able to support themselves for the two years it takes to make the game, and that your resident money man buys the software, supplies servers and also pays for development hardware
- cash flow is minus (and stays so throughout development)

Development reaches beta
In addition to the above you now need staff to manage the beta testing stage of the game, the customer support system, the billing system and the game roll out.

These individuals will be on top of the existing development team and it will be very unlikely that they will also work for free - still, lets assume they do.

You also need to start marketing the product. The more you spend on marketing the more customers you attract and the sooner you get to self-sufficiency- the less you spend the less you attract and the longer it will take to grow the game to the point of self-sufficiency.

- cash flow is now even more minus due to the larger outgoings

Game launch
The game is given away free - zero income
The development staff are still required to maintain/improve the game
The customer support staff are also needed
the operating costs (servers etc.) still have to be paid
- Cash flow is still minus and the more users you get the more the support costs and server costs increase. You also need to continue marketing to grow the game.

Game launch+X
The first users reach level 10. Some of them opt to start paying while some will drop out
- Cash flow is still minus because there are not enough paying users to cover the costs of running the server.

Game launch+Y
The game is growing in popularity and attracting more customers. The problem is that due to the growth curve more new (non-paying) customers are joining than exiting customers are reaching the stage where they start to pay.
In addition you need to keep existing customers happy so the developers are still working, creating new content.
- The cash flow is even further into the minus than for Game launch+X. How long this continues depends on how fast the user base grows, how long it takes existing users to reach the paying stages and what % of users decide to pay vs quit.

Game launch+Z
The income from paying customers finally grows large enough to cover the running costs of the game and support all the non-paying customers. Only at this point will your royalty only staff start to receive any money.

Conclusions
i. Break-even and game launch are not the same thing - it could be months or even years after launch before the paying user base grows to a sufficient level for anyone to earn anything - the dev staff and company will have to survive not just throughout development but well beyond that point.
ii. Staff may work for free but you will still need to pay for marketing. The growth of the game will depend to some extend on how much you spend. That money needs to be spent prior to and after game launch - that is a debt the company will carry and which needs to be paid off before staff start earning royalties.
iii. If your marketing budget is too low or your game not very good your user base will grow slowly. Your debts will grow faster than income and the company go bust.
iv. The reverse is also true - if your user base grows too quickly the number of free users (each of whom is costing you money) will far outstrip the number of paying users and the company will go bankrupt - you need to ensure that you have fixed limits on user numbers to stop this happening.

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Mkay. So if I still want to make it happen, we're gonna have to pay extremely close attention to the signup rate for new users. If it becomes too popular, limit signups. If it isn't popular enough, lower the level to say, 5, to get people who aren't willing to pay out of our system. And it's up to our team to make sure the game is good enough to play, and to make sure we're marketing to the right people.

Also, I should make sure that all of my team members are prepared to work for free until we break even- rather than until we release the game. No worries, here- especially since almost everyone on our team is much more interested in getting the project done than about making money. Many of them have other forms of income, and have said that they would gladly continue working for free if we needed them to.

And- just to qualify- these guys aren't chumps, either: we've got award-winning modelers, 8th year movie soundtrack composers, game programming gurus, network systems experts... just trying to prove that this can be done, it can be done right, it can be done well, and it can be done independently. A very important question to ask is "for love or money?" For almost all of us, it's love.

Finally, I should be looking for either a) a way to pay for beta testing management or b) beta testing management that's willing to work for free until we break even- like everyone else on the team is doing. This will be a very difficult task- as every form of recruiting for free labor is- but one that I do not think we can't overcome.

Is this a correct summarization of your advice, Obscure? Anything else?

Oh, and:

Quote:
Original post by MSW
A self advertiseing investment of $60+k, along with great artistic imagery is a waisted effort if you reach the wrong consumer base....there is more to it then just reaching the largest number of people...you have to get your advertisements in front of the people whom are most likely to be interested in your game....yeah you could reach a lot of people with a full page ad in EGM...but, while EGM subscribers are definetely interested in games, are they the type whom would be particularly interested in your game?

Excellent point. It's gonna not only be a challenge to produce the advertisements, but to be able to correctly assess our target audience, so that we're not throwing money at a group of people who wouldn't even consider playing a non-mainstream game.

Quote:
Original post by MSW
Besides $60k, while a lot of money, isn't enough for even rather small scale national grass roots (word of mouth) type advertisment campagins.

Wholeheartedly agreed and understood.

Any other tips for self-publishing teams?

::EDIT::

I have failed to thank you all for your advice up to this point. My direct and to-the-point responses probably sound much more like challenges than questions, as I have done a poor job of showing my sincere gratitude for your advice. ^^

Thank you very much.

[Edited by - TheArtifex on December 16, 2004 11:41:55 PM]

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