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Illyrious

Profit/Royalty splitting

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Illyrious    122
I'm beginning development of a game, and I have no idea what level of compensation to offer people as they roll onto the team. Does anyone have a recommandation for how to divide profits or royalties among the different categories of the development team (i.e. Writers, musicians/sound fx, programmers, artists, etc.)? Thanks in advance, Illyrious

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Tashi    138
That's a pretty involved question. You need to talk to a good lawyer that's knowledgable about intellectual property and S corporations and other limited liability companies.

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Guest Anonymous Poster   
Guest Anonymous Poster
Wow, you are assuming that are going to be profits when all evidence points the other way. Most game projects do not return a profit. What is you plan for compensating people in the case it does not turn a profit?

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pink_daisy    200
There are two broad ways you could structure your game making operation. If you have a team of friends and you all want to make a game then you could form a partnership whereby everyone is an equal in your organization. Profits, if and when they come, would be split among everyone in the partnership. The legal business structure for this type of organization is an LLP or an LLC (limited liability partnership/corp. respectively).

If, on the otherhand, you think you will have many people with varying levels of involvement and thus different levels of compensation, then generally a C or S corp. would probably fit well. In those cases, the business entity issues stock. You can then sell the stock to raise capital and you can also use the stock to split up among your various contributors. When you are making money the proceeds that are left over after all expenses are paid can be paid out as dividends to the shareholders. This would include yourself, those you sold stock to, and the people who worked on your project that you gave stock to.

In theory you could form any of these business entities on your own, but there is real value in paying an attorney to do this for you to help insure that it is done correctly.

As far as *how much* to pay each person working on your project, there are two strong factors: What is the going market rate for their work, and what is that particular person willing to work for. Some job search engines (such as www.dice.com) have salary surveys where you can see how much professionals in a particular field are making in a given geographic area. Also, it's a great idea to just ask the person you are courting how much they wish to make. You don't have to agree to their terms, but it's a good starting point.

There seems to be some animosity from programmers with regards to what other members of the team are worth. There is a thread going right now about voice actors going on strike.

linky

I'm surprised at the number of people who have commented about how little those people should be paid. Some programmers seem to think the programmer is the most important cog in the game-making machinery, and that everyone else is expendible. If writers, artists, modelers, CS, and the like were so worthless then why don't the coders just do the work themselves? I am a programmer, but i certainly appreciate the skills and knowledge these people bring to the team. If you look down your nose at other members of the team and fail to treat them with respect, then don't expect much in the way of respect, loyalty, or dedication from them either.

I had a person who had joined my group before i formed the company (this was in the thinking outloud stages) and he stated that members shouldn't be paid for time spent thinking and should only be paid for how much code they write. Since he was a coder, all he could think of was in terms of his own abilities, not anyone elses. Since artists, customer service staff, marketers, etc aren't writing any code they wouldn't make any money under his system. Needless to say he was quickly removed from my organization.

Again to answer your question of how much they should get paid i suggest looking at how much people in their field make and ask prospective contributors what they feel their time is worth. There is no magic formula.

good luck!

~don

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Illyrious    122
Quote:
Original post by Anonymous Poster
Wow, you are assuming that are going to be profits when all evidence points the other way. Most game projects do not return a profit. What is you plan for compensating people in the case it does not turn a profit?


I'm not trying to be naive, just optimistic. I realize the odds are against me. When I start recruiting, I will make people aware of the chance they are taking. For now I'm planning on offering money for services (like concept art), instead of a percentage. The question is: what do I offer the people who want a piece of the action instead of cash?

-Illyrious

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