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How much money do you get!!

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I wonder how much money i get from the publisher if a make a good game. Thanks!

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It depends on which publisher you choose, for example [deleted][deleted][deleted][deleted][deleted][deleted][deleted][deleted][deleted][deleted][deleted][deleted][deleted][deleted][deleted][deleted]. Hah hah hah.

Nicole Poster (wife of Anonymous Poster)

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Dumb question and dumb answer.

This forum just isnt like how it used to be.

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To attempt a serious answer to this...

First let me clear up a misconception: Unless you''re an established game development company, you are unlikely to get a publisher for a game after you finish it. The logic goes something like this: If the game were worthy of being published, you should have been able to get a publisher before you started working on it. So if you complete a game, you''re probably limited to value publishers or self-publishing via shareware or whatever.

Publishers who put up money do so based on the proposed budget for the game. This budget is where you presumably have estimated how much money you need to complete the game. Not that they''ll give you what you ask for carte blanche. And when they do decide to give you something, they tend to tie it to milestones and deliverables. They''re not wiring you all the money all at once. Nope. That lesson has been learned.

Please note that the budget for development has little to nothing to do with how much money you expect/want/dream of making from the finished game. That''s a separate issue, and deals with royalties. Depending on who you are and how much money you get upfront and how good/bad your negotiation skills are, this can run from 5% to 30%, averaging about 15%. But even then, the publisher is going to make their money back *before* they start paying you royalties, and it''s a Rule of Thumb in game development that you almost never see any money from royalties.

Of course, all of this is moot unless you''ve caught the publisher''s attention with a decent game pitch or demo. Because publishers don''t give out money to just "make a game". They front money (they don''t "give" anything) to a developer to create a specific game that they see having profit potential *for them*.


DavidRM
Samu Games

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Guest Anonymous Poster
quote:
Original post by DavidRM

it''s a Rule of Thumb in game development that you almost never see any money from royalties.

DavidRM
Samu Games



Umm, I disagree, if this were the case nobody would developer budget games. Please dont make assumptions like that.

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I stand by my stated "Rule of Thumb", but I will clarify it a bit.

If you receive funding to develop a game from a publisher, you will almost never receive a dime of royalties. This is because the publisher will insist (and I tend to agree) that they make their money back before you get royalties.

This applies even to the budget games I''m aware of where the developer was paid by the value publisher to create the game.

If you take money from a publisher to create a game, your chances of seeing royalties from that game are about the same as you creating a runaway hit, whether you develop a budget game or an AAA title.



DavidRM
Samu Games

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Hi,


DavidRM has a very good point as far as budget games go. You will not always recieve a royalty, but more in terms of if a publisher would even want to offer one. Don''t forget that you will make a decnet profit on the development costs anyway! So if you did a number of budget games that were relatively quick to produce, you could earn a decent amount from them.

Now as for AAA titles, if you negotiate a royalty as well as a developement cost, then you may or may not recieve royalties depending on how well it sells. The publisher will usually tell you the target of money they hope to recoup before the royalties start being divided up.

If you do get such a deal, then you should only count on the development costs, never base anything on royalties.


Finally, all this aside, you should make a profit otherwise there wouldn''t be so many people doing it!


Thanks,



Marc Lambert

marc@darkhex.com

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Speaking of which, does anyone know anything about budget publishers? What sort of sales do their games get? What % do developers get? What''s the total money made by the developer in an average case? Assuming of course the developer made the game, then submitted it, and the publisher didn''t fund any of the development costs. Thanks.

~WarDekar

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So I guess the question I have is, where do you make money at in game development if not royalties? I don''t understand how development costs constitute profit making opportunities. I think of development costs being such things as paying salaries to the programmers, artists, etc., licensing fees for engines and code you use from other developers, etc., and of course costs associated with purchasing software to make graphics, compile code, etc.

What Iget from teh above dialogs is that your money is made, essentially, in the salary you pay yourself from the development budget. Is this accurate? Clarification would be great

Thanks!

Jason

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To put on my economics-degree hat for a second:
The main point about games financially, and one that pulls in some very risk-hungy investors, is that it is almost all fixed cost. In other words, the cost of making a single copy of Quake3 is massive (you need to code/test the game) but the cost of making a second copy is very minimal ( a tiny fraction of the price the consumer pays). With this in mind, you can see that when a game makes more than the original development costs, every additional sale is money for old rope. If a copy of Age Of Empires II gets sold tommorow, almost all the money is big lovely profits, because the development costs were paid back ages ago. This is why publishers like big AAA titles, the fewer and bigger the better, because they pay less development costs per copy sold on the smash hits, whereas lots of smaller games that cover their costs by a smaller percentage arent as attractive to them.
Because there is a lot of competition amongst big titles, a lot of them dont manage to get their costs back, but some of them (the Sims, AOE 2) make it big time, and the publishers basically gamble on having a hit like that every now and then.
The difference for the smaller (indie) developer with a small budget and a 2-3 man team is huge. In that kind of market, you may well end up funding the development yourself, and thus be entirely dependent on royalties to make money. My strategy game - StarLines INC was self funded, and we get a big percentage royalty for each copy sold. If it had been a big budget title we would have got a nice advance, but no royalties for quite a while (untilt he advance was covered), so the answer is, it really depends on what level of the market you are aiming.

Hope this was helpful to someone. Maybe we can turn this forum into a respectable one again!

http://www.positech.co.uk

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Guest Anonymous Poster
Who sells your games starlines?

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Guest Anonymous Poster
REALgames

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Hmm... I heard that you could earn between $10,000 - $50,000 for a "small" game like a really advance and good tetris or a great chess game. I have only earn''t $200 for a promo-game

/MindWipe

"If it doesn''t fit, force it; if it breaks, it needed replacement anyway."

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if you planned it out properly, you could make a really advanced Tetris pretty comfortable with probably two people.

in other words, max. $25,000 bucks per person for a clone? If this small team makes four clones a year, they''re making six figures...

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Since I am mainly responsible for coming up with the investment strategy for our game, I may be able to shed some light here. Disney Interactive recently approached a company here in town asking them to propose a solution for a large MMORPG style game. The proposal went something like this:

Demo in 6 months, final game in 9 languages in 18 months, costs somewhere south of $2 million fronted by Disney, and 15% royalties off sales after the $2 million had been paid back to Disney. This along with almost 300 pages of context was included in the RFP.

Unfortunately publishers can make a deal like this and then turn around and inspect your entire company''s financials, etc., etc. The company here in town did not get awarded the contract because their revenue was not enough in Disney''s eyes to convince them the company would survive the project.

This being an example of what can happen may help to shed some light on the attitude that publishers can and do bring to the table. Whether or not the company here in town would have made money on the deal or not is an entirely different issue as DavidRM has said. To me, when approaching these types of contracts, your money can be made on the development side if your processes and development methodologies are in place and followed. This reduces the cost of development work and in turn increases profits. As always in contracts with any publisher, scope management is of utmost importance to make any money during development.

Who knows, given a contract like this, maybe it will be a hit and the royalties will come in. Given the above numbers your game would have to sell 44,445 copies @ $45.00ea to make you your first dollar which is roughly 63% as successful as the average game on the market today.(70,000 copies) It can be done though at $45 per and an average selling game the development studio would only make $172,500 in royalties assuming the price of the product remained $45 while on the shelf. Realistically you can reduce that $172K figure to around $110K - $130K after reducing the price to keep it competitive.

Kressilac



Derek Licciardi
President
Elysian Productions Inc.

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Kressilac, Does your company have a website? I tried searching for it once and did not bring anything up.

Just curious.

Justin

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Guest Anonymous Poster
i know a small game dev co. (11 people) that has published 5 or 6 games through a ''budget publisher''. they usually have a 4 month development time, and do get some money upfront. one title sold over 50,000 copies, i think. they work really hard, and are NOT getting rich. many of them have to have ''day jobs''. those that don''t could be making more doing corporate programming and graphics, but love what they do. they''ve got a couple of cool games they''ve designed, and are trying to get a big publisher interested.

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Elysian Productions Inc. was formed little over two months ago so unfortunately at this time we do not have a web site up and running. It is currently under development and should be available inside of a few weeks. I will post here when we put up our web site.

Kressilac

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Guest Anonymous Poster
quote:
Original post by kressilac

Given the above numbers your game would have to sell 44,445 copies @ $45.00ea to make you your first dollar which is roughly 63% as successful as the average game on the market today.(70,000 copies) It can be done though at $45 per and an average selling game the development studio would only make $172,500 in royalties assuming the price of the product remained $45 while on the shelf. Realistically you can reduce that $172K figure to around $110K - $130K after reducing the price to keep it competitive.

Kressilac



Wait, wait. Doesn''t the distributor take a big chunk too? I thought (and I am ignorant) that the publisher gets about 1/2 of the retail price. Then the developer''s contract would be based on the publisher''s revenues.

Obviously this only applies to sales through the big retail chains. If that''s true (and I have no evidence that it is, just a thought running around my brain) then you''d need double that number of sales to make any royalties.

Which means the average game would not make any royalties, which seems to mesh with what developers usually say.

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Guest Anonymous Poster
quote:
Original post by Anonymous Poster

one title sold over 50,000 copies, i think.


I''m interested. What game is that?

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To the anonymous poster:

In this case, given the size of the company involved, I would tend to believe that any money required to go to the distributor was handled in the Disney share of the royalties. I say this because, given the wealth power and size of Disney, there wouldn''t be a retail chain in the company that wouldn''t pay Disney to have its games. That being said, I am a little leary of taking that statement that far and would think that any type of distribution deal Disney had with a retail chain( CompUSA ) would favor on Disney''s side, taking the distributor leverage and cost nearly out of the picture. I believe the offer was 15% of the sales price and not 15% of the wholesale price.

In case I am wrong about this, it is easy to see that my point is only accentuated by your statement. If the distributor received 20% of those sales price and then your royalties were computed afterwards. The numbers in my example would rise to 55,555 units to payback Disney and the revenue generated from an average sale without discounting the boxes for longer shelflife would fall to $97,500 or realistically between $50,000 and $60,000 in overall royalty money.

In my opinion, there are only two ways to make money in this industry. Self fund your game and hope that you can self publish it or get a publisher to buy into a completed game for a smaller chunk of the pie. Generating huge fan support for your game helps with this strategy though that fan base has to be supported with your own funds.

The second way is by getting a title paid for and by getting lucky enough to have your game begin to sell into the hundreds of thousands of copies. If you make a hit, well isn''t that the holy grail of game programming.

Both are risky propositions no matter how you size them up. It will be a few years before the game industry sees the likes of a Procter and Gamble style company in the industry. As it stands right now with the US recession, the tech stock scare that investors are in and other factors, you can expect investors to ignore the game industry in the immediate future or at the very best moderately invest in titles that show very little risk.

Kressilac

ps I do hope all of this outlook is very different in twelve months. As a matter of fact, I am beginning to bet on it.

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