Idea for a new type of publisher

bit64 · 2005-02-14T19:13:04

Publishing, it seems to me, is the bottleneck of the game development world. Thousands of people are out there who would love to make a good game, have the talents and the drive to make that game, but no funding or organization. Enter the Indie game publisher. We have a few existing Indie publishers, but they don't offer money to potential developers as EA or other large publishers do. Fair enough since Indie developers would be considered a very high risk. But what if an Indie publishing company existed that would fund the independant developers? Would you sign a deal with a publlishing company that was willing to loan you 100,000 dollars to get your game done? The company could sit down with the developer and discuss their idea, and if the idea was doable, and fun, then they could work out a milestone deal. Let's say that they worked out 8 milestones over the period of two years. Every 3 months if the Indie met their milestones, the publisher would loan them another 12.5k dollars. If the Indie failed to meet two milestones, the publisher would have the option to stop funding, and the Indie would have to begin repaying the loan (at a reasonable interest rate). Of course, if all milestones are met, the Indie would still be responsible for paying off the loan, but the publisher could then pull the payments from the proceeds of the game, perhaps even withholding royalties until the loan was paid in full. Upon repayment, the Indie would again retain rights to their game. I would think that most Indie's could get a team constructed and work on a game for 20k/year (assuming 5 employees, or a smaller number of employees and buying their resources from a third party). The publisher would not be risking too much, since its dishing out only 4k/month with the option to pull out at the first milestone if the developers seem inept. Would you be willing to do this if you were an Indie? Of course, your games would probably never see the shelf at Wal-mart, because printing, distributing and advertising costs are outrageous. They would probably have to be sold online, and that markets not enourmous, so there would be a risk that you would have a partial loan to payback, even after a succesful distribution. But because you would retain rights to the game upon repayment of that loan, you would be free to sell it to EA/Vivendi/whoever in hopes of larger revenue. This would simply be a way to get a team organized and have food on your table while you are able to put a game together. Any feedback?

Games Business and Law Business

Started by bit64 January 16, 2005 02:50 AM

25 comments, last by ManofGoD 19 years, 2 months ago

bit64

218

Author

January 20, 2005 05:26 PM

Quote:Whats your opinion on this idea?

Quote:
From earlier post:

With the dawn of networked console gaming, I think that there is a huge oppurtunity open to sell games over the internet. I feel that the average Joe who owns an <your fav console> would gladly pay 20 dollars to download a new game directly onto his console if he didn't have to get out of his recliner. :) Even if it is from a developer/publisher he is unfamiliar with. Granted, this is not possible with the current generation of consoles (space limitations) but should become more feasible with the next generation.

Games would sell in the range of 10-20 dollars each and would have to pay 10% for licensing fees. However the developers would receive about 80% of the profits (minus what they owe), and the remainder would be used to support other projects and distribute DVD's to grocery stores and gaming magazines.

Don't be afraid to be yourself. Nobody else ever will be.

Obscure

175

January 21, 2005 02:41 AM

Quote:Original post by bit64
Games would sell in the range of 10-20 dollars each and would have to pay 10% for licensing fees. However the developers would receive about 80% of the profits (minus what they owe), and the remainder would be used to support other projects and distribute DVD's to grocery stores and gaming magazines.

While I realise you are doing this to help developers you also need to make some money if you want it to be a long term venture. The game software industry is hit driven so 90% of the titles you fund will lose money. Now, while the contract will state the developer must refund the advance, we all know the vast majority won't be able to or will only be able to do so in payments of $20 a month. So, unless you make substantial money from the 10% of titles that make money you simply won't be in business. The profit on $10-20 software is tiny and if you give 80% of it to the developer you are never going to have any more money to invest into new titles.

Dan Marchant - Business Development Consultant
www.obscure.co.uk

Azazeltr

128

January 21, 2005 05:46 PM

Quote:Original post by bit64
Quote:You dont understand.If an indie needs x amount of money for development,he needs more than x+ worth of immovables to be able to pay it back.

No. You don't understand. I am not trying to get a loan, I am thinking about loaning out my 'own' money to independant developers to help the game industry move away from the state of static development that I currently believe it is in. Since this is my own money, I get to dictate why and to whom I loan it to, regardless of collateral and ability to repay.

No, i certainly understand you.That's why i said "Firms would financially be in big trouble not only from games that fail, also a lot of people would try to exploit this opportunity to ripp the firms and run away with the money".

Some questions come to my mind at a first glance:
How can you be sure that the profits that has been earned from the game will cover the loans you supply?
What experience do you have to be able to guess what kind of games bring what amount of sales results?
Do you have any opinion about the PC game industry endorsement?
Have you ever made a market research about game types and their selling amounts?

As you see, if you want to help indie developers that's something very respectable but you must have huge balls to do it.The circumstances may not be as you think.If you want to help indies you should also be able to make money to help them more as Obscure said.I was a finance coordinator of a finance corporation and i did this for 4 years.So i really know what i am talking about.Financers always consider this; "what are the risks, what are the profits".If the risks will be much more than profits, they dont invest or lend money.In your situation, the profit may be charming but the risks are a lot higher than the possible profit.So my suggestion would be to think as much as you can and do not make an attempt unless you are very sure about what you are doing.Also you must be financially secured plus you should have a lot of experience in this business area, before taking such risks like that.

I really support your idea and i would really want someone to make this idea turn to reality.Heroes are needed in every battle and i never forget that no battles can be won without heroes.But depending on my experiences, you are playing with fire and watch out yourself because you might get burned more than you can ever imagine.Good luck.

Peter Szabo Gabor

152

January 24, 2005 07:44 AM

Just one thought: if you are a publisher that publishes "indie" games, what is the difference between you and for example Activision? Size?
Activision signs contracts with developers and publishes their games (maybe funding the developement). So?

On the other side, I am freelancing beside my 40h job, and it is not easy at all, so I can understand what you mean, but the reality is rougher I think...

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Obscure

175

January 24, 2005 01:03 PM

The difference is mainly one of scale but also related to the type of developer.

Activision fund and publish games but they only sign up titles they consider will be big, triple A titles (of course they may end up being rubbish but that is just the nature of the business). We are talking $1million+ budgets and they only sign up big teams that have proven development experience working on big titles.

Indie in the sense that it is being used here means small independent developers. Often one man and his dog, sometimes ful time but many working part time while doing a day job.

Dan Marchant - Business Development Consultant
www.obscure.co.uk

glenrm

122

February 10, 2005 08:30 AM

A number of great ideas floating around here. I have to think that a whole new direct to consumer publishing model is about to become workable. There is Half-Life 2's steam powered direct to consumer, Stardock, and the Garage Games site. So clearly both large and small developers want access directly to the consumer. I tend to worry mostly about getting my next game into the hand of my customers without going through a traditional indie publisher. Perhaps you should look at some more dynamic and new publishing models to help with your idea. Also you could partner with an indie developer, perhaps buying a portion of the indie developer or teaming with them to create a new dynamic publishing site.

Glen Martin
Dynamic Adventures Inc.
Zenfar

ManofGoD

122

February 14, 2005 07:13 PM

One word of caution: don't get stuck in the value industry for too long. Your company will get labled, and landing that first Triple A title will be much harder. And most definately try to get out from under the publishers wallet as soon as possible. Controlling your own company/IP/development is very important.

Now on the other side, no matter what, never sign away all of your rights to a title. At the very least retain the digital rights to all of your titles. Direct sales now a days can lead to big dollars. Steam proved that a million units can be sold via this delievery system, the biggest complaint about HL2 however is the Steam system. Valve had the right initial idea, but failed to implement it. Check out Game xStream (www.gamexstream.com) they have true gaming on demand service, and is the perfect venue for indie developers. There is an interesting quote on their site from 3D Realms.

ManofGod

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