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Bakuda

Non Disclosure Agreement

17 posts in this topic

I've recently run into something that I'd like a little advice on. Yesterday I found a listing for a developer looking for a team to create a game, including a composer, but would not release any information at all about the game. I emailed him asking for more information and sent him my portfolio. He replied stating that he would not release any info about the game at all until I signed a non disclosure agreement. I didn't mind that, so after reading the 5 page document I filled it out and signed it, giving only my city and state for my address. I am very careful about who I give my personal information to, especially my address, and am not willing to simply hand it out unless I know I can trust said person. Anyway, the agreement was kicked back to me with the developer stating he needs my full address for legal reasons.

I understand the importance of non disclosure, but I wanted to ask if it's standard practice in game development for all parties to sign an agreement such as this before any information at all is released.
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Hello,

I cannot speak from experience on whether or not this is common in indie development (though I'd say about 1 out of 4 in the hobbyist classifieds require an nda to be signed). If you're willing to sign one, you'll also have to give your address (after all, it's most likely possible to get that anyway, no matter how cautious you are).
However, I'd really think about whether you want to work with that specific team, even if you have to agree to their conditions. While NDAs are fully understandable in the AAA-industry, where marketing is timed to the minute, to the actual gamedevelopment and especially to indie-dev it's highly damaging and there'll be more and more projects requiring ndas as long as it's possible to find members under such conditions.
As you can probably tell, I'm quite biased on this topic so I'll stop now; however, feel free to ask me anything if you'd like to discuss this further.

bw,
Tobl Edited by Tobl
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[quote name='Tobl' timestamp='1351628203' post='4995556']
However, I'd really think about whether you want to work with that specific team, even if you have to agree to their conditions. While NDAs are fully understandable in the AAA-industry, where marketing is timed to the minute, to the actual gamedevelopment and especially to indie-dev it's highly damaging and there'll be more and more projects requiring ndas as long as it's possible to find members under such conditions.[/quote]
Okay, I'll bite. ;)

What do you think is harmful about it? I like reading devlogs and I think keeping your production process open to the public can be helpful depending on your marketing strategy (crowdfunding etc.), no doubt about that!
But having some secrecy going on and making sure that everyone keeps it this way can work out just as well if done right, both for indies as well as "AAA" productions. And some people like to protect their ideas and process from being copied, which is understandable. And what's harming the game development process there, except maybe a lack of creative exchange with other developers and the fanbase (if any)?

Cheers,
Moritz
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Well...I guess the best way to put my feelings right now is that I really need to get out of hobby mode and into business mode. This is been on my mind the past few days and has been brought on by comments I've seen on this board. But now I do see that I need to take a time out and really set myself up, write a business plan, take my website from blog style to professional, and really start treating this as a business. Really, one of the biggest reasons why I was so hesitant to disclose personal information to this developer is I have no idea what kind of work he's done in the past, or even if has has done anything. I don't know if he's a serious developer of some guy with an idea, though he did mention payment in the posting. But, as you said, if I truly am running a business then that business address is public knowledge.

Once again, thanks for the advice. Looks like I've got some work to do on setting up my business.
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Hello,

@ Bakuda: I'm sorry for taking this a little offtopic.[s] I will move this to a new topic if the discussion should grow any further, but please bear with me for the moment.[/s]

I will start with the less radical part of how NDAs hardly give you any advantage:
- First of all, nobody forces you to make all your content public. Just say "hey, I'm making this <short description> game, contact me if you're interested", you don't need an nda to do that.
- Of course the nda is mainly about that person then revealing all of the content. Fortunately, our brains are quite capable of evaluating whom we can trust. If the other one is someone trustworthy, you can simply ask them to please not reveal anything and they most likely won't. If on the other hand the other one is someone out to screw you, they will do so with or without an nda, there's always a way.
- The above is even more true considering that an nda is nothing but a piece of paper with a little bit of ink applied if you're not willing or able to enforce it. If someone actually breaks the nda, it will cost time, energy and money to actually hold them accountable for that. Even if you are willing to move time and energy from the gamedevelopment to the courtroom, being an indie-team, you most likely won't have the funding to pay a lawyer.
- "But what if someone steals my idea?". That is certainly the most-asked question in this context. And even though it's been said countless times, let's repeat once again: ideas are cheap. They're a dime a dozen and anyone working in gamedevelopment has more ideas in their head than they'll ever be able to produce. What makes a good game is the execution, not the initial idea. The only reason someone in indie would prefer to steal your idea instead of working together or making one of his own, is that they don't have any. But if that is the case, they'll hardly be capable of making that idea into a game any better or faster than you.
- The other main reason for NDAs is marketing. The trick with mystery-marketing however is that, while no one knows what the answer is, everyone knows that there is a 'mystery' (in this case, the content). The big industry can pull that off pretty easily, they can just push content into the media until everybody is sure to have heard about that at some point. Indie teams on the other hand do not have the budget for that and mainly rely on word of mouth advertisement, and it's just really hard to get people to say "I've seen this cool upcoming game. I've never heard of the guys who make it and I don't really know what it's about, but you should definitely check it out." Maybe there are examples where it worked and it would be great to hear of them, but most of the time, indie-gaming is still too small and at least I wouldn't know of any cases where that really worked on a large scale.

Now for the real deal, why is it actually bad for development:
- Methods and standards have evolved in game design and continue to do so, but in it's core, it is a creative process. And like any creative process, it relies heavily on the dynamic within the team and the motivation of the individual members (even if money keeps them working, motivation is what produces quality). NDAs damage these dynamics by introducing yourself with two basic premises: Even though you might make a 180°-turn from outside the team to inside, the very first connection between the team members on which anything else is built will be distrust. Secondly, even before the new guy is joining, you define an unhealthy hierarchy: You are the boss and you alone decide the rules under which one might work with you. While I certainly don't say there shouldn't be any hierarchy at all, the role of the team leader should be a supporting one, not the bad boss that want's to control everything.
- While there might not be many that are higly opposed against ndas in indie-teams, the simple fact that they have to make quite an effort to only view the most basic content of the game and thus even consider joining the project is a huge inconvenience for many people when looking for a team. The result is that quite a few of them simply won't and stick with a project that tell's them what they're up to from the beginning instead, resulting in fewer that are even contacting you. Those that do contact you are then likely to contact the other teams with ndas as well, resulting in them having lot's of options which project to join. All in all, it will result in you having a much harder time finding members than you would have had otherwise.
- As Katz already said, this will also take away the exchange with other developers and the community. While many might do well enough without input from other developers, a quick glance at the gamedesign forum shows that most of the people that ask for advice there get tons of ideas they wouldn't have ever thought about on their own. Even more important might be that this doesn't apply to design-questions only, but also to tech-questions. So especially if someone on the team is inexperienced or trying out something new, they won't be able to ask "I'm trying to <do this>, how do I accomplish that?", making work much harder for them and lowering the quality of the product.
- Finally, a game idea evolves and changes heavily during production. While it's always good to have a design document, an nda requires you to have a very detailed one so that as many of your ideas as possible are covered by the nda, and then reinforces the notion that those ideas are "worth protecting". This leads to a very static design process, where many deferring roads remain unexplored and lots of potential goes unused.


TL;DR: Lot's of reasons why one person believes that NDAs are bad for indie teams.

[s]If you think this topic is worth further discussion, please send me a pm and I'll port what we have now to a new topic in order to avoid spamming this thread.[/s]

bw,
Tobl
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[quote name='Moritz P.G. Katz' timestamp='1351639156' post='4995617']
[quote name='Tobl' timestamp='1351628203' post='4995556']
However, I'd really think about whether you want to work with that specific team, even if you have to agree to their conditions. While NDAs are fully understandable in the AAA-industry, where marketing is timed to the minute, to the actual gamedevelopment and especially to indie-dev it's highly damaging and there'll be more and more projects requiring ndas as long as it's possible to find members under such conditions.[/quote]
Okay, I'll bite. ;)

What do you think is harmful about it? I like reading devlogs and I think keeping your production process open to the public can be helpful depending on your marketing strategy (crowdfunding etc.), no doubt about that!
But having some secrecy going on and making sure that everyone keeps it this way can work out just as well if done right, both for indies as well as "AAA" productions. And some people like to protect their ideas and process from being copied, which is understandable. And what's harming the game development process there, except maybe a lack of creative exchange with other developers and the fanbase (if any)?

Cheers,
Moritz
[/quote]
The problem with a NDA is, that it is only a one-way contract. It protects the right of them, but it will hinder my future decisions. If I sign a NDA and got information about an idea I got myself, I will be hindered to use this idea in future projects. Signing many NDAs would be like killing off most of my creative decisions, even worse if I do not really know if any of the last X projects I worked on used this idea or not.

Therefore I would never sign a NDA for smaller projects or indie teams.
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Hello again,

@nsmadsen: wow, my arguments surely got ripped apart ^^. But after all, that's exactly why I was so eager and at the same time so hesitant to post them (eager to hear other's opinions, hesitant to misinform others since I don't speak from experience).
I can see many of your points, other's I'd still disagree with and very few we've simply got our wires crossed, but we've both made our points, so I won't go on about that and instead simply say thank you for helping me understand the people that like ndas a little better.

bw,
Tobl
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I think it's worth making the distinction between hobbyist and serious indie or professional projects when discussing non-disclosure agreements. It's also worth noting that just because a project requires signing an NDA doesn't necessarily mean that [i]no[/i] information can or will be provided to potential candidates, and I think the presence or absence of some information -- along with the developers reputation or lack thereof -- can be revealing about the project.

Having the proper legal documentation and contracts in place is really important for any serious project, and is something I would expect of an professional indie developer, [i]especially[/i] if they have an established reputation and are paying reasonable rates. There will normally still be at least some minimal information -- often one or more of the target platforms, perhaps a broad genre, maybe an idea of the theme -- provided, but the main details of the project may not be publicly available.


For hobbyists however, I find that an NDA is often simply a hindrance to the process, where a would-be developer begins recruiting with no information what-so-ever disclosed, one or more people proceed to request information and are told "you need to sign an NDA". For the professional developer who is actually going to pay contributors, and perhaps also has an established track record, this is fine, but when most people get this response from a hobbyist with no track record who isn't paying or is only offering royalties (which often amounts to not paying) they simply move on rather than spending the time to get more information.


An NDA isn't always appropriate, and you should judge the situation based on the information that is available. It's reasonable to be expected to sign a proper legal agreement for a proper, professionally handled project, but chances are it'll be a waste of time if you're dealing with a hobbyist who isn't paying and doesn't have a track record. As mentioned above, you should also be sure to read over the document carefully -- and even talk to your lawyer if you're not sure of anything -- before signing and make sure the terms are appropriate and agreeable; in the business world it's not a deal breaker to negotiate for different terms when those initially provided aren't agreeable, and you're doing yourself a huge disservice if you sign a legal document when you aren't happy with the terms.


The people behind [url="http://indie-fund.com/"]Indie Fund[/url] also have a pretty strong opinion on the matter which they shared in a blog post: "[url="http://indie-fund.com/2010/07/the-worthlessness-of-ndas/"]The Worth(lessness) of NDAs[/url]", and reading over what they have to say and consider the situation I'd have to say the biggest take-away message is that an NDA does not suit all situations.
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Solid discussion all!

I definitely agree that NDAs are not always needed and when[i] (and why)[/i] they're presented also matters. I also somewhat misspoke, NDAs are most certainly related to marketing to help give the company control over how and when details about it's project is released. But that's not the only reason for having an NDA and I agree with Brian's points 100%.

Good stuff you all!

Nate
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The following section from the indiefund site is the most appropriate point for indies:

"Enforcement – In order for an NDA to be worth anything more than the paper it’s printed on, a developer has to be willing to enforce it, and capable of enforcing it. That means retaining lawyers and investing significant amounts of money, time, and emotional energy. Even if a developer actually chooses to invest their time and energy in enforcing an NDA (at the expense of actually making games), they are unlikely to have the financial means to do so, or they wouldn’t be seeking funding in the first place. For deals worth millions of dollars, NDAs make sense because enforcing them in court could result in huge payouts. For deals worth $100k the risk/reward ratio means a legal battle is a terrible bet."

If you're asked to sign an NDA then ask for a mutual one. Just because someone gives you what looks like their "standard" NDA it doesn't mean it's their only one. It is most likely their most aggressive version trying to claw as many rights as possible. The same can be said for all type of contracts. If you aren't red lining half of the first contract that you get from someone like a MSFT or a Sony then you're getting hung out to dry.
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Commonly two reasons for NDA, ethier they have a good product or their being paranoid. Anyway you stack it, everyone thinks they have a good until the media and game reviewers rip it apart.
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Personally, I wouldn't have even sent it back to you.

I won't do business with someone who refuses to give me their address. Plain and simple. It's nothing personal. But I have an obligation as Executive Producer to ensure that the work of my team is not stolen. But you need to be informed as to the reason for this. I would try to explain the reason over the phone so that you could understand before I even sent you the NDA. It's obvious to me that he didn't do a good job at this. He mailed it a 2nd time before I would have mailed it the first. lol

Though we are creating games, which is fun, this is still a business. You have to be willing to do business if you plan to start working with any professional studio. The NDA is for your protection too. And yes, an address ensures that you ARE the person that matches the name. So, it is needed. Edited by Adam Spade
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Warning: I have zero understanding of this subject.

[quote name='bschmidt1962' timestamp='1351717218' post='4995940']
A couple add-on points.
Insist on a bi-directional NDA. That protects both of you (and it can keep the would-be employer from doing things like telling a competitor of yours how much you charge).[/quote]
How does a bi-directional NDA typically protect ideas you yourself had prior to signing the NDA, that are now at risk from information the other party is divulging?

Example: I have a game idea involving x,y, and z. I sign a NDA for unrelated contracting work on Big Company's game. After signing the NDA, Big Company tells me their game involves x,y, and z. Now I can no longer use x,y, and z, despite coming up with the idea independent of their revelations, right? How does a bi-directional NDA typically protect both parties from independent and unforeseen conflicts in the information revealed?

[quote name='Ashaman73' timestamp='1351693320' post='4995830']
The problem with a NDA is, that it is only a one-way contract. It protects the right of them, but it will hinder my future decisions. If I sign a NDA and got information about an idea I got myself, I will be hindered to use this idea in future projects. Signing many NDAs would be like killing off most of my creative decisions, even worse if I do not really know if any of the last X projects I worked on used this idea or not.
Therefore I would never sign a NDA for smaller projects or indie teams.
[/quote]

Do NDAs typically have an 'expiration date'?

The only NDA-like thing I've ever received was the following (by email):
[quote][i]I ___________ , acknowledge that the information I am agreeing to receive is "CONFIDENTIAL".[/i]
[i]I ___________ , acknowlege that any information presented regarding the said topic, before or in
the future, is "NOT FOR DISSEMINATION", or to be used COMPETITIVELY.
I ___________ , understand the I am released from this agreement in 6 months ________, today's date.[/i][/quote]

It wasn't very professional, since the person sent me the information in question (both in email files, and discussing it at length via the phone) prior to having me fill it out. [img]http://public.gamedev.net//public/style_emoticons/default/laugh.png[/img]
I filled it out via email and sent it back, figuring it couldn't harm me since it had an expiration date anyway, and I knew it was unrelated to my own business plans.

I modified it before sending it back. My modified version ran thusly:
[quote][i]I acknowledge that the <project>-related information I am agreeing to receive is confidential, and not for dissemination.[/i]
[i]I acknowledge that any information presented regarding the topic of <project's general idea> and the monetizing of <project's general idea more specificly> is the property of <person I was discussing with>,
and I agree not to share the information without his permission, or use the information for competitive purposes.
I agree to not disclose the information contained within the package I am receiving, nor to make any use of it in any way without <person>'s permission.
I understand I am released from this agreement in 6 months from Thursday, March 13th, 2011, which is today's day.[/i][/quote]

In what ways can someone signing NDAs protect themselves from unforeseen sideeffects to their own projects? Edited by Servant of the Lord
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I wrote an article published in Edge Magazine several years ago, but the concepts and thinking about video game industry NDAs still applies. That article can be found at: [url="http://www.edge-online.com/features/curse-nda/."]http://www.edge-onli...res/curse-nda/.[/url] I'll also try to repost it on my site ([url="http://dlr-law.com/writings--pubs.html"]http://dlr-law.com/writings--pubs.html[/url]) but no promises.

That said, you should always keep in mind that an NDA is a contract, nothing more and nothing less. If you're on the receiving end, you need to take care in considering each and every promise that you're making. While NDA lawsuits in our industry are not all that common, the potential for one is still there. So take care in what you sign.

Over the years, I've come across a lot of misconceptions about just what an NDA is and why is is of use. In previous articles I've written about the concepts behind copyright and the fact that an idea is not protectable under US copyright law. On the other hand, "trade secrets" can be protected, even when they are in the form of an idea, if, for example, it that idea gives a particular business some sort of advantage. In that case, the lawsuit would involve what is called interference with a prospective business advantage. Here the NDA would be of value.

Where a lot of businesses get off track is in thinking that their NDA will protect their cool game idea, but they fail to consider that they may not have the resources to effect a lawsuit necessary to enforce it. In practicality, one must consider not only the purpose of the NDA, and whether you have the resources to enforce or provide a defense against it.

Finally, keep in mind that NDAs come in all shapes and sizes. You don't necessarily have to settle for what is proposed and are free to make changes, as you would in any other contract negotiation. If you've every dealt with Hollywood studios, you'll know that their NDAs are often one way, take-it-or-leave-it agreements. In these situations, you need to decide 1) can I keep the promises they are asking; 2) if I can't what will happen; 3) do I have any room to negotiate. Rarely will you be sorry that you've at least tried to better the agreement in your favor.

-D

As always, the information contained in this post is not legal advice and you should not rely on it for that purpose. The sole intention of this post is commentary only. Edited by danno_56
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