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

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

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

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

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

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!

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