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emcconnell

Contracts and Profits Sharing

7 posts in this topic

I am a programmer who is making an indie game for the android outside of my day job. The game was more or less half passion project, half portfolio fluffer. Recently it caught the attention of two artist at my work and they wanted to get on bored as an environmental artist and character artist.



I was originally going to put the game up for free on the android market, to both get my name out there and let potential employers see what I do. Now I think it is more than worth the $1 minimum android pricing (I'm not looking to make serious money here). So my question is two part:

1) What should I offer, if anything, the artist who want to work on the game? They would be doing minimal work as I am the programmer, designer, model rigger, animator and any other hat that needs to be worn besides what they provide me. The money coming in would be extremely low but just in case this blows up for some reason I think they are entitled to some percentage of that. Also I've yet to set up a company/LLC, should they be contractors or part of the company when I set it up?

2) What kind of contracts/forms should I have them sign to assure ownership of their work (for sake of full ownership of the game)? Are there standard forms for situations like this?

I'm very lost on the business side of things. I know I should contact a layer for advice but I thought I would start here and hear if anyone has or is currently in a situation similar to this. Thanks
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1. You should pay him the amount specified in your written contract. That amount depends on what you can negotiate (probably more than you want to pay him but less than he wants you to pay him).

2. You should pay a lawyer to write a collaboration agreement for you (preferably a lawyer with experience in game contracts).


http://www.sloperama.com/advice/article58.htm
http://underdevelopmentlaw.com/collaboration-agreements-and-online-development-teams/
http://www.obscure.co.uk/directory/directory-legal/
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Of course, talking to a lawyer is your best movechere. Like it or not, as soon as you start paying other people and receiving money for your work, you've created a business, and doing business without a lawyer is risky..

For this game, it sounds like you want to hire them for a specific, and relatively small amount of work. For that reason, your probably want to get a "Work for Hire" agreement. That's a simple agreement that says what they are making for you, how much you are paying them, and also (this is important) assigns all rights to what they've created over to you. I.e. you pay them a flat fee, and they give you ownership of what they've created in exchange for that fee.
If you are the generous type, you can specify they get a bonus if for some reason your game does immensely well. (eg give them a $50,000 bonus if the game has over $1M in post-android's cut income, etc).. I'd avoid giving them a percentage-- that's generally used when there is a lot more collaboration than seems to be the case here. It's also a potential for large headaches if the game gets big as you both argue over things like net revenue, marketing expenses, etc.

If/when you do set up a company/LLC, your business relationship with them depends on your actual relationship with them. It sounds like you're the instigator and 'brains', and you just want some art. That sounds like a "contractor" relationship. If you make someone 'part of the company', then you have gone into full fledged business with that person. At the risk of a non-PC analogy-- A contractor relationship is like normal dating. You can break up at any time without any real issues. If you're in business with someone, it's like getting married-- you are legally bound to this other person, so you want to make sure it's someone you want to be legally bound to.

As far as what to offer, take a look at what contract artists on the market are getting. Better yet, write a fairly detailed description of what you need, and then have them give you a quote.

Brian Schmidt
[url="http://www.BrianSchmidtStudios.com"]Brian Schmidt Studios[/url]
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One small followon. Assuming you're operating out of the US, if you pay a contractor more than $600 in a calendar year, you are required by the IRS to provide that person with a "1099-MISC" at the end of the year. That form tells them how much you paid them during the year. You also then need to file a form with the IRS that says "I paid people and gave them 1099-MISC forms". So keep good records.
Great fun...huh? :)
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Yeah, it's funny how things go from innocent indie game I'm making on my own to having to getting a crash course in micro business management
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[quote name='kdog77' timestamp='1333816507' post='4929077']
Make sure you check your contract with your current employer. Many employee agreements contain clauses that limit outside activities that compete with the employer's business or that require IP assignment to inventions created outside of work that are in the same line of business. This often comes up for developers working at big publishers. Moonlighting is often tacitly condoned or ignored, but there is always a chance your employer is not that enlightened. Good luck!
[/quote]

Very good point. Somehow I missed that in the original post.
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