I know that this question has probably been addressed many times in one form or another, but I haven't been able to find any information that really satisfied me so I'm going to ask anyway. Does any one know what percentage a developer can expect to make off of the sale price of a retail game if they have received the majority of the funding via a publisher contract? Take for example a game that costs 50 US dollars. The retailer is obviously going to take a percentage of this sale price leaving X number of dollars for the publisher. The publisher then takes its percentage, which I have been told is anywhere from 65-75% of the profits, and this is typically after the publisher has already taken 100% of the first sales in order to recoup the development costs. So after all is said and done, for a typical game that has a fairly standard publishing deal what percentage of sales per unit sold can be expected for the developer? I'm guessing somewhere around 10-15 US dollars for a 50 dollar game, but I could be way off. Does anyone know where this type of information can be obtained? Thanks guys for having the patience to answer a question that I know has been addressed several times. - Matt

As Dan mentions you are way off, for a $50 game expect something starting at $2 for a 10% royalty rate, many publishers will offer a slidign scale of rate linked to sales, and some of those will be hockey stick shape. Its all very heavily to the advantage of the publisher if you are a new team.

Now I remember in the dim distant past a meeting with you Dan at Phillips with a Mr Brown and a Mr Lynn Evans just before he jumped ship to Virgin :)

Thanks guys,

Only $2-5 to the developer for a $50 unit? If this is the case it seems that less than 10% of developers would ever be able to stay afloat.

Next question: If an existing company that already had trained artists and programmers were to self fund the development of a game so that a publisher was only required for marketing and distribution purposes would the percentage of return significantly increase or will the publisher still take the larger percentage?

Thanks again.
-Matt

Quote:Original post by engineeredvision
Only $2-5 to the developer for a $50 unit? If this is the case it seems that less than 10% of developers would ever be able to stay afloat.

You apperently haven't looked too closely at the actual pay-per-hour rate most salaried developers get, and the razor-thin profit margins of most game companies.

Quote:Next question: If an existing company that already had trained artists and programmers were to self fund the development of a game so that a publisher was only required for marketing and distribution purposes would the percentage of return significantly increase or will the publisher still take the larger percentage?

I read this question as: "If they don't give me money up front, can I get more money at the end?" The answer is obvioulsy 'Yes'.

If they fund development, they are basing the contracts on the risks that your game will actually get completed. They factor this in to the negotiated per-unit royalty formula. I like the hockey-stick description given earlier. Until you hit the bend in the hockey-stick, your royalties are getting reduced mostly to fund the games that never make it to market, or do poorly. That bend is moved based on your project's risk and your negotiating skills.

Bringing them a completed game and negotiating a publishing deal gets you a much more attractive royalty rate since they don't have to take the risks of you actually completing the project, and because they don't have to incur significant costs for the 18-or-so months before they see returns. Again, the actual rates will depend on your product and your negotiating skills.

frob.