• Advertisement
Sign in to follow this  

My first publisher agreement

This topic is 2996 days old which is more than the 365 day threshold we allow for new replies. Please post a new topic.

If you intended to correct an error in the post then please contact us.

Recommended Posts

Hi, I have received from my first round of agreement from my publisher. We have developed our title on our own without additional funding and the title is now complete. What type of payment options should I be looking at from this publisher apart from the advance payment option? -The publisher will be retaining the full publishing and distribution rights for 4 years (exclusive for retail); non-physical distribution non-exclusive -The territory is worldwide and is for PC -The royalties are 40 % of Net Revenues -The reporting and audit are Quarterly and Standard. -The publisher will be responsible for Marketing and PR campaign -The publisher also suggests for some additional extra levels for the retail version as we will be self publishing the title earlier. I am thinking of negotiating of the territory, the royalty and the term. Regards, Abhinav

Share this post


Link to post
Share on other sites
Advertisement
Should I ask for an advance payment and will I have to return the advance payment if the title does not perform?

Share this post


Link to post
Share on other sites
Quote:
Original post by Zatun
1. Should I ask for an advance payment
2. and will I have to return the advance payment if the title does not perform?

1. Since they are asking for you to create additional content, yes.
2. It depends on what it says in the contract. (It depends on what you negotiate.)

Share this post


Link to post
Share on other sites
Pay attention to the definition of net. Occasionally you'll see opportunities for publishers to "double-dip" in the revenue for amounts already recouped.

Chances are you won't get less than 3 years for a term, which is the typical life cycle for a game.

Share this post


Link to post
Share on other sites
Quote:
Original post by Haladria
From my experience, 50-60 % of net revenue is more common.

I bet it depends on the publisher. This article from an indie developer says that 40% of net revenue is actually high for portals like Big Fish Games. So maybe you are thinking of big name publishers like EA or THQ or something?

@OP: Congratulations by the way, best of luck to you and your game!

Share this post


Link to post
Share on other sites
Quote:
Original post by lmelior
I bet it depends on the publisher. This article from an indie developer says that 40% of net revenue is actually high for portals like Big Fish Games. So maybe you are thinking of big name publishers like EA or THQ or something?

@OP: Congratulations by the way, best of luck to you and your game!


That article is a bit one sided too. Of course the portal is going to offer a deal that benefits them, that is business. But they offer advertising and usually getting your game on dozens of other affiliate sites. Yeah you could just setup a PayPal account and sell your game on your own site and get all the money. But unless you are wanting to spend a lot in advertising nobody is going to know about your game. This statement has no real basis, but either way you go you probably end up with near the same net income. Just that a portal you are going to sell more units.

The other non item is games on portals can't have links to sites. Games on portals have game company splash screens so its not like its very hard to figure out who made the game and Google the site.

Share this post


Link to post
Share on other sites
Quote:
Original post by jtagge75
That article is a bit one sided too. Of course the portal is going to offer a deal that benefits them, that is business. But they offer advertising and usually getting your game on dozens of other affiliate sites. Yeah you could just setup a PayPal account and sell your game on your own site and get all the money. But unless you are wanting to spend a lot in advertising nobody is going to know about your game. This statement has no real basis, but either way you go you probably end up with near the same net income. Just that a portal you are going to sell more units.

Oh yes, I should've said I don't really agree with the article, but I remembered seeing actual percentages there so I pulled it up. Actually, many other indie devs that have posted their game sales statistics like this guy make a great deal more from portals than direct sales. The only ones who don't are pretty well-known indie companies like Positech and Spiderweb that have already built up a fanbase.

Share this post


Link to post
Share on other sites
Quote:
Original post by lmelior
Oh yes, I should've said I don't really agree with the article, but I remembered seeing actual percentages there so I pulled it up. Actually, many other indie devs that have posted their game sales statistics like this guy make a great deal more from portals than direct sales. The only ones who don't are pretty well-known indie companies like Positech and Spiderweb that have already built up a fanbase.


That is a pretty good article actually. Its possible to do 'alright' with casual games. You just have to play to the market and do hidden object/match 3/etc type games instead of trying to do FPS/RPG/3D spectacular games. But I digress, I am dragging this off topic.

As for the actual question, I agree pretty much with Tom. 40% the best I've seen from a casual portal. And if they are wanting you to add new features to the game its not unreasonable to expect some kind of advance. Whether or not you have to pay that back if the game doesn't do well you need to discuss with them. Mostly likely you wouldn't start getting any money from sales until they recouped the advance so you probably would be responsible for paying it back.

Share this post


Link to post
Share on other sites
@Tom Sloper - Thanks for the reply. I don't have the contract yet. This is the initial draft or term-sheets I have been discussing with the publisher.

@madelelaw - Thanks for your reply.I guess I have a lot to learn.

@lmelior - Thanks for your reply. Actually, 40% is what I get after the below calculation.

Retail price- X
Tax- 19%
Retail fee-30%
Distributors fee- 20%
Production-1 X/unit

The publisher will take 60% of what remains and I will be left with 40%.

@jtagge75 - Wow. Thanks for the information.

Share this post


Link to post
Share on other sites
Quote:
Original post by Zatun
@Tom Sloper - Thanks for the reply. I don't have the contract yet.

I never said you did have the contract. What I said is, that's where you'll find the answer to your question. In other words, WE cannot tell you whether you would "have to return the advance payment if the title does not perform," since YOU are going to negotiate that point into your contract. Certainly WE have not seen your contract, if you haven't yet!

Share this post


Link to post
Share on other sites
Quote:
Original post by Tom Sloper
Quote:
Original post by Zatun
@Tom Sloper - Thanks for the reply. I don't have the contract yet.

I never said you did have the contract. What I said is, that's where you'll find the answer to your question. In other words, WE cannot tell you whether you would "have to return the advance payment if the title does not perform," since YOU are going to negotiate that point into your contract. Certainly WE have not seen your contract, if you haven't yet!


Sorry. I misinterpreted your statement.

Share this post


Link to post
Share on other sites
Quote:
Original post by Zatun

Retail price- X
Tax- 19%
Retail fee-30%
Distributors fee- 20%
Production-1 X/unit

The publisher will take 60% of what remains and I will be left with 40%.



Ok, I have 0 (zero, nada, nothing, none, no) experience in publishing a game, but essentially if read this correctly, if the retail price is $10, then for every unit sold you get ~$1.60.

I hope your game ships a lot of units!

Share this post


Link to post
Share on other sites
Quote:

[...] if read this correctly, if the retail price is $10, then for every unit sold you get ~$1.60.


You know it depends. If you are going for digital only, that sounds quite bad. But it seems that the publisher wants to put the game in boxes. Now if you would try that on your own your would have to pay ALLOT upfront. The biggest problem is that printers and cd manufacturer want a minimum number produced and to get the game onto shelves they have to "entertain" the retailers.

And since it is in boxes the chances that your game will sell are quite height. This is for a number of reasons: 1. The publisher has to get the money back they invested into producing the game (even if only the physical media). 2. Since it is on a shelve it will have much more exposure.

The devil is in the detail:

Quote:

Original post by Zatun

Retail price- X
Tax- 19%
Retail fee-30%
Distributors fee- 20%
Production-1 X/unit

The publisher will take 60% of what remains and I will be left with 40%.


If this is in the contract, great for you! If not then Net-Profits, means AFTER the publisher got all his upfront costs back. If your game does not sell as expected, you get no money at all. The problem is even worse, if the publisher thinks that the game will be the next hit and has a bunch of CDs produced but is only a Ok game and thus under performs (by the publishers estimate). You get no money, even though it might perform better than in your wildest dreams.

Share this post


Link to post
Share on other sites
Quote:
Original post by Zatun
Retail price- X
Tax- 19%
Retail fee-30%
Distributors fee- 20%
Production-1 X/unit


Can you explain that last line?

a. What is production exactly? (I know what it means to me, but what it means to me is not compatible with this formula above.)

b. And what does "1 X/unit" mean? (Surely it doesn't mean "one retail price per unit" because that doesn't make sense.)

Share this post


Link to post
Share on other sites
@Rioki - Thanks for your reply. I do agree its not financially feasible to print the boxes and the DVDs yourself and there is no way you can have a reach of the retailers like the distributors do.

Thanks for explaining "NET profits". I guess I will have to be really careful what I ask for.

@Tom Sloper: Hi Tom,1 X is 1 dollar or X euros of the production fee. According to the publisher, production here refers to the manufacturing of the CD/DVD, printing costs, etc

Share this post


Link to post
Share on other sites
Quote:
Original post by Zatun
1 X is 1 dollar or X euros of the production fee.

I still have no idea what you're saying there. But I think you've gotten the answer to your question?

Share this post


Link to post
Share on other sites
That X in the formula is probably the cost of CD production, manual, packaging and such. You might want to get that defined more accurately, I think.

My last contract has been several years ago, but it might still be of interest for you. I had a similar "share profits" deal, but a honest one, so that the contract said "per unit profits". Don't take the wording too serious, I'm translating freely here, but I think it might be a good idea to watch out for a term like this.

Retail price 39.99 Euros
- VAT 16% 34.48 Euros
- retail span 50something% 17.25 Euros
- per-unit costs (DVD, hull, manual) ~2.50 Euros 14.75 Euros
- 50% share -> our win per unit sold was 7.37 Euros

And we actually got that exact sum per unit, paided quarterly. It never actually paid for all the work we invested, but it was a fun time, a great learning experience, it impressed enough to get me my first job in game development, and we made some friends along the way. I already left game development again several years ago, but I don't regret anything :-)

Share this post


Link to post
Share on other sites
Quote:
Original post by Zatun
-The publisher will be responsible for Marketing and PR campaign


You might want to make sure that they'll market your game properly
If they have similar titles but receive a higher percentage for those titles, they might not put a lot of marketing focus on your title..

Share this post


Link to post
Share on other sites
Quote:
Original post by Schrompf
That X in the formula is probably the cost of CD production, manual, packaging and such. You might want to get that defined more accurately, I think.

My last contract has been several years ago, but it might still be of interest for you. I had a similar "share profits" deal, but a honest one, so that the contract said "per unit profits". Don't take the wording too serious, I'm translating freely here, but I think it might be a good idea to watch out for a term like this.

Retail price 39.99 Euros
- VAT 16% 34.48 Euros
- retail span 50something% 17.25 Euros
- per-unit costs (DVD, hull, manual) ~2.50 Euros 14.75 Euros
- 50% share -> our win per unit sold was 7.37 Euros

And we actually got that exact sum per unit, paided quarterly. It never actually paid for all the work we invested, but it was a fun time, a great learning experience, it impressed enough to get me my first job in game development, and we made some friends along the way. I already left game development again several years ago, but I don't regret anything :-)


Schrompf - Thanks for sharing your details.

Share this post


Link to post
Share on other sites
Sign in to follow this  

  • Advertisement