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Compensation/Contracts ????

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Here's the scoop. I want to create a COMMERCIAL strategy game. I don't know any programming, or game development at all (save for what I have learned from the boards so far). I have just learned of a friend of a friend who used to program and write code for EA sports. Worked on some big titles. Wants a change now studying in another field. I do not know the person's background with graphics / design possibly programmer only. I have an art background and have proven able to pick up technical skills quickly. If I approach this person to see if they want to collaborate, my idea with their programming ability, and either I learn the 3D graphics or hire someone else. Other that partnerships, what are going rates for that type of work, i.e. %, flat production rate, hourly rate etc.? I also believe that person would be quite important, not just for development sake (would save me learning it), but due to contacts within EA. Thanks in advance, Brian

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1) Game Developer Magazine publishes an annual salary survey, the 2003 edition is online at: http://www.gamasutra.com/features/20040211/olsen_01.shtml. There's a US bias there, and the salaries look around 10-20% higher than I've experienced in the UK (which could be just higher salaries in the US or flaws in the survey or the responses).

2) In-house game development jobs are usually paid by yearly salary; overtime usually isn't paid; but milestone bonuses and time off in lieu of overtime are reasonably commonplace.

3) Contracting is becoming more popular - some contracts are essentially exactly the same as permanent in-house jobs except with a fixed term (e.g. the duration of the project), often renewable. I've heard of both hourly rate and flat rate as well as milestone based contracts for freelance programmers. As an experienced programmer, I'd expect a contract to pay at least 20% higher than an in-house position.

4) The average development team size for current-gen (PS2/Xbox/GameCube) console games is in the region of 25-50 people (roughly 60% artists, 40% programmers IME), and that's excluding tools, technology and QA; programmers in such teams tend to be specialists in one very specific area such as "AI", "graphics" or "Animation". Making commercial console games isn't cheap!

5) IMO, the scope of what a two person team (assuming that's what you're talking about creating) is going to be able to do will be limited somewhat. A cell phone, PDA or non-AAA PC game maybe; but a console or multiplatform game would definately need more people to do much more than a basic prototype. Finding funding for an incomplete and non-established team will be very difficult.

6) Beware that the publishing side of a large company such as EA is usually very separate from the development - with very little cross communication between the two sides for the majority of staff - so someone who worked as a programmer at EA will have lots of other development contacts and a good industry knowhow, but is unlikely to know many people in the publishing side of things unless they were in a "producer" or possibly "technical director" role.
[That's based on my own experience, EA may be different; I've worked as a programmer for the internal development divisions of 3 publishers now, two large, one small; all were the same - the two sides of the business were very separate]

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I want to create a COMMERCIAL strategy game. I don't know any programming, or game development at all


That right there sets the tone for the rest of my reply. You want to create a commercial product in a field you have no knowledge nor experience in. That about sum it up?

Quote:

I have just learned of a friend of a friend who used to program and write code for EA sports. Worked on some big titles. Wants a change now studying in another field.


Another field within or without game development. Sound to me that after EA, most people don't want ANYTHING to do with game dev and thus this idea dies before it starts.

Quote:

If I approach this person to see if they want to collaborate, my idea with their programming ability, and either I learn the 3D graphics or hire someone else.


And a gift for unfinished sentences? :)
I'll tell you what will happen: he will laugh in your face, either politely or not. You are putting nothing on the table except potential...and you need to convince a friend of a friend that you have potential enough for him to risk allying themselve with you...for right now you are off the charts with risk.


Bottom line: Spend a year or two making a game THEN approach this guy. Spend these next two year building a relationship with him...get some insight from him....learn. But there is no way you will ally yourself with him.

Quote:

Other that partnerships, what are going rates for that type of work, i.e. %, flat production rate, hourly rate etc.?


Get your feet wet in game dev, and these questions will answer themselves! :)

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As an experienced programmer, I'd expect a contract to pay at least 20% higher than an in-house position.


Out of curiosity, why? You don't drive to work and you set your own hours. What about freelance work that is 20% harder or requires 20% more skill than if you were working in an office?

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In-house you get benefits (health, paid holiday, pension etc). Freelance you don't get those and you don't have job security (not that employees do these days), hence you earn more.

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Original post by S1CA
1) Game Developer Magazine publishes an annual salary survey, the 2003 edition is online at: http://www.gamasutra.com/features/20040211/olsen_01.shtml. There's a US bias there, and the salaries look around 10-20% higher than I've experienced in the UK (which could be just higher salaries in the US or flaws in the survey or the responses).
For a basic programmer with <2 years experience they say $59,400. From Yahoo Finance 1$ = £0.55 so that converts to £32,670.

That's a BIG salary for a programmer in the UK. I doubt anyone gets such a salary after two years experience in any field in the UK - £15K seems more like a starting salary up to maybe £25K after a couple of years.

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Original post by fastlane69
Quote:
Out of curiosity, why? You don't drive to work and you set your own hours. What about freelance work that is 20% harder or requires 20% more skill than if you were working in an office?

Simple, really. You don't get paid during down times, and you personally have to buy everything necessary to do your job.

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But I'm looking at it from the client's side...why should the client be responsible for all these things for you like health insurance or making sure you have the equipment when all of these are meant to be taken care of independently by the freelancer and are not the responsablity of the client...that is the core definition of a freelancer.

My understanding is that when I pay a freelancer, I'm paying them for their work and that is it...nothing more. This is because the definition of a freelancer is that they must have their own equipment to complete the job (hence why the extra 20 for this) and the client is not responsible for insureance (hence why the extra 20 for this) and the client has no control over workflow and there is no promise of work beyond the current contract...so if an employee could do this in 10 hours and the average salary for an employee doing this is 20 USD, I would expect to pay around 200 USD since that is the value of the work. If the person comes to me and quotes a price of 240, then I would want some extra value for paying above my expectations.

In my experience, the greatest allure of freelancing is EXACTLY that you aren't paying for your employee as an overhead and this makes freelancers a more economic option than in-house. What I hear you suggesting is that a client should STILL be responsible for these items for their freelancers and I don't see it that way.

Let me put it another way, as a client, what extra value am I getting for the extra 20%? None as I see it. Thus as a client, I would go with someone that isn't hiking their price up (and believe me, there are so many fish in the water) over someone who is...it would be nothing personal, just business.


Just to be clear, I do understand that a contractor's price has to based on a comfort level for both freelancer and client. But what I don't understand is expecting a client to pay you 20% more so you can have your cake (get all the employee benefits: equipment, insurance, unemployment) and eat it too (but NOT be considered an employee and thus I have no direct control over your work).


Quote:

That's a BIG salary for a programmer in the UK. I doubt anyone gets such a salary after two years experience in any field in the UK - £15K seems more like a starting salary up to maybe £25K after a couple of years.


I doubt these numbers are realistic in the US either. Almost 60K for a starting programmer? I doubt it.

EDIT:---------------------------------------------------------------
LOL
just figured this out:

Quote:

There's a US bias there, and the salaries look around 10-20% higher than I've experienced in the UK

Quote:

As an experienced programmer, I'd expect a contract to pay at least 20% higher than an in-house position.


So a US Industry Employee gets paid about what you would expect as a UK Freelancer should make?

then...
By your numbers, if you were to reply to one of my RFPs, then my price would already seem 20% higher to you since I'm basing it on US industry standards and thus you wouldn't have to modify it to account for your personal percentage, right? We would be automatically on the same page. :)

[Edited by - fastlane69 on June 13, 2005 3:05:40 PM]

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fastlane69:

1) Consider the per-employee additional costs after basic salary involved with employing someone in-house at a modern games company:
- bonuses (e.g. product success; profit share; milestone)
- training (e.g. conferences - with associated expenses)
- healthcare
- employers pension contributions
- paid vacation (i.e. you pay for hours not worked)
- paid statutory sick leave (i.e. you pay for hours not worked)
- paid maternity/paternity leave (i.e. you pay for hours not worked)
- employers tax contributions (12.8% of the employees salary in the UK known as "national insurance")
- employers liability insurance
- redundancy (severence) payment if you have to let them go (legal requirement if they've been employed with you for more than 2 years in the UK)
- office space and resources
- equipment
- employers indemnity insurance (if an employee causes damage or injuries [legal as well as physical], the employer can be liable)

Total the above costs up. As an employer, you'll find them around 30% on top of basic salary. You'll find US government statistics to back this up at: http://www.bls.gov/news.release/ecec.t06.htm



2) So why might you as an employer want to hire a freelancer? Amongst other reasons:

a. $50000+20% doesn't seem so bad for a freelancer when you're paying your in house staff $50000+30%

b. someone has specialist skills you only require for a short amount of time. Employing them on a permanent basis means it's going to cost you money when you don't need them any more (severence/redundancy pay, and additional legal costs if they can claim the dismissal is at all unfair).

c. you need someone extremely experienced to train your in-house staff short term, but can't afford to pay them long term.

d. project specific contract. A project specific contract sets out much clearer rules for both parties, and is often used to shift indemnity onto the contractor (e.g. the difference between an in house employee infringing a patent and a freelancer who indemnifies their client against infringements)



3) Have you ever hired a tradesman such as a plumber to do a one off job such as install a bathroom suite? You will have likely negotiated a price that was mutually acceptable, the work will have been done, and that's the last you saw of each other.

Do you know if that plumber went out and bought a new wrench and some spare parts after you paid them?

Do you know if that plumber charged 40% more than he would get for the same work employed at a utility company?

Do you know if that plumber used some of their fee to pay for medical insurance?

Do you even care exactly what the plumber spent your money on? If a price was agreed, and the job was done, then you probably don't know or care.


See my point? Once a price has been negotiated and the work completed, it's no business of yours what that person does with the money.

If the price a freelance programmer charges is too high for you, as you say, you'll take your business elsewhere. If the price you're willing to pay is too low, then the freelance programmer will take their business elsewhere. There are always mugs who'll be exploited on both sides.



4) Regarding the UK games industry salaries: for programmers working in-house on a full time, permanent basis, average annual salary before bonuses and deductions is:

- junior (< 2 years work experience): £10000-£20000 ($18056-$36128)
- experienced (2-8 years experience): £20000-£30000 ($36128-$54196)
- senior (8+ years experience): £30000-£40000 ($54196-$72262)
- senior with desirable specialist experience: £35000-£50000 ($63216-$90303)
- senior with management responsibility: £35000-£80000 ($63216-$144484)

That does of course vary based on location, someone in the South East tends to make more than someone in the North due (partly) to higher house prices. It also varies with company, some pay high salaries; some pay lower salaries but higher bonuses; some only hire graduates and promote internally to keep below average; etc.

Speaking to friends working in the US, salaries for programmers working in-house/full-time/permanently seem to be higher than in the UK, a very rough estimate is somewhere between 10 and 20% higher. But every country has different taxes, different costs of living, etc.



5) Since your anger seems directed at me in particular (don't shoot the messenger!), I'd just like to make it clear that although I have completed a few freelance contracts in the past, I'm not a freelancer. For the most part of the past 12 years I've been employed full time/in-house at various companies.

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Quote:
Since your anger seems directed at me in particular


WHOA COWBOY! Let's get something clear... No one is angry at you. Don't take my disagreement with your viewpoint to mean I hate you. LOL :)

Quote:

I'd just like to make it clear that although I have completed a few freelance contracts in the past, I'm not a freelancer.


All the more reason for me to question you viewpoint, no? :)

Personally, what I think we are seeing is a classic Industry vs. Indy perspective. As an Indy, we are bound by the same laws, but they are applied diffrently due to the scope (smaller budget; smaller company size; greater use of oursourcing). As "industry" your been spoiled by all the benefits that a large game company has to (and doesn't have to) offer...consider:

Quote:

- bonuses (e.g. product success; profit share; milestone)


Must be offered to anyone over 21 and who worked at least 1000 hours in the last year.

Quote:

- training (e.g. conferences - with associated expenses)


Not required under US law.

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- healthcare


Only for full time employees.

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- employers pension contributions


Must have been employeed with the company for 3 to 5 years and earned at least 400 USD in that year for some (SEP-IRA) or worked at least 1000 hours in the last year for others (401k)

Quote:

- paid vacation (i.e. you pay for hours not worked)


Not required under US law.

Quote:

- paid statutory sick leave (i.e. you pay for hours not worked)
- paid maternity/paternity leave (i.e. you pay for hours not worked)


Not sure about this. I'm know the "leave" is mandated; I'm not sure that it has to be paid; the only stipulation I'm aware of is that your job must be waiting for you after you come back.

Quote:

- redundancy (severence) payment if you have to let them go (legal requirement if they've been employed with you for more than 2 years in the UK)


IF you fired them (as opposed to they quit)and it wasn't due to gross negligence (there is a way that if your employee REALLY fouled up, they can be fired without unemployment) AND they worked for you for 3 months or more, they are entitled to uninsurance.

Quote:

- office space and resources
- equipment


This is my point of contention since a freelancer should, by definition, have these already (otherwise, who could you conceivably do the job) and thus I, as your current client, shouldn't be directly responsible for buying your tools as per a 20% markup.

Quote:

- employers tax contributions (12.8% of the employees salary in the UK known as "national insurance")
- employers liability insurance
- employers indemnity insurance (if an employee causes damage or injuries [legal as well as physical], the employer can be liable)


These are the bare minimum required under US law for an employee. Since most of your benefits are optional or only applicable under long term cases, I would argue that your 30% is more like 5%.

Suppose you are an employee in a company:
-in a company that doesn't offer paid vacation, do you demand more so you CAN take paid vacations?
-in a company in which you aren't yet eligible for a 401K, is it the companies responsablity to pay you more until such time as you are eligible?
-in a company that doesn't do training, do you demand the company pay for your independent education
No.
-so in a Freelancer arangement where the freelancer is not eligible for any of the above, why does it make sense to make the client company pay more so the freelancer CAN get these?

Even if I accept that 30%, under your viewpoint, I'm going to pay the freelancer 20% more to cover costs, so I'm saving 10% and losing ALL control of the work plus having to negotiate rights of usage and engaging in riskier work than having an employee...If I have to pay a freelancer almost the same as an employee, then hell, I might as well just hire someone!!! It's only when a freelancer is distinct and offer financial advantages from an employee that they are viable options IMO. Under your viewpoint, that advantage is lost.


Quote:
See my point? Once a price has been negotiated and the work completed, it's no business of yours what that person does with the money.

If the price a freelance programmer charges is too high for you, as you say, you'll take your business elsewhere. If the price you're willing to pay is too low, then the freelance programmer will take their business elsewhere. There are always mugs who'll be exploited on both sides.



I agree wholeheartedly with all of the above. But this is different than holding on to the belief that I as a Outsourcer am somehow indirectly responsable for what a Freelancer doesn't get by not being an Employee. This is also diffrent from the belief that I should have to include an extra 20% in my "raw" price to account for this things.

I do have to be harsh here and remind you that you are NOT a freelancer nor are you an Outsourcer, thus your opinions of what a Freelancer should or should not do, IMO, is to be taken with a grain of salt. Not trying to be mean and I'm no professional company man myself, but alot of what I'm hearing sounds like idealized notions of what a freelancer is from an Industry that barely uses them and NOT what it actually is from the trenches. I outsource ALOT and in my experience, I have met with nothing but success by:
a) figureing out the hourly rate to do a work professionally (say 10 USD/hour amateur or 30 USD/hour expert),
b)count up the hours I think it should take,
c) and that is my final "price".

Anyone who would bid 20% above this price better add to the value of the bid, either by convincing me that their talent is worth it or that it is more work than I anticipated...whether they are really using that 20% to buy new paint brush doesn't matter to me one bit as you correctly point out...What I do care for though is what I get for that extra 20%.


Quote:

- junior (< 2 years work experience): £10000-£20000 ($18056-$36128)
- experienced (2-8 years experience): £20000-£30000 ($36128-$54196)
- senior (8+ years experience): £30000-£40000 ($54196-$72262)
- senior with desirable specialist experience: £35000-£50000 ($63216-$90303)
- senior with management responsibility: £35000-£80000 ($63216-$144484)


These salaries seem on par with my experience in the US. I would blame the discrepancies on diffrent jobs ( a senior programmer is usually more valuable than a senior artist) and location (living in califormia will bump it up AT LEAST 20% just to stay alive...conversely living in Arkansa for example, and the game dev house probably wouldn't have to pay you much more than what you quoted above.)

[Edited by - fastlane69 on June 15, 2005 3:46:14 PM]

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