Ok so where is Frobs respons was there "any positive advice" i could practically use to further my goals ?

Well, I guess Frobs put in more direct words what I wanted to hint at.

Which is basically "revenue sharing schemas are hard to get to work"... or, put in a less nice and more pessimistic, but PROBABLY more realistic way "revenue sharing models don't work". Depends on your level of optimism, and how much risk you are willing to take really (no to mention how much risk everyone else involved in the project is willing to take).

I would say what you SHOULD take away is a general sceptical stance of members on this forum that this is the right decision to Kickstart a game project, or game studio, or whatever similar project you are planning. That could mean that you should really look into alternatives, or make damn sure that your plan is watertight (so that you can meet your milestones by the end of the year), or that you make sure all the "creative guys" you have on board really understand what they signed up to.

I'd say, if you have a team that is ready to do this, and a clear, SHORTTERM goal that is achievable, go with it. What is the best revenue share plan only you and your team can work out. I certainly would set this up officially, maybe even with the help of a lawyer, so nobody comes back in a year when you missed your goals and can claim the whole thing doesn't stand up in court.

Also, make sure you think about all the things that can and will go wrong. Milestones WILL be missed... what do you do then? Features will creep, or get dropped, what do you do then? People WILL drop out of the project, potentially taking all their work done so far with them... what do you do then? People MIGHT get pissed about something, there MIGHT be fights among the team about ownership.... as nobody gets paid anything, make sure you clear up ownership and stakes in the project in advance.

And make sure you keep your team happy... seems you found a bunch of rare individuals ready to delve into such a risky undertaking. Try not to loose them, they will be hard to replace.

Thanks guys, appreciate the time you both took for a solid respons.

There are problems with this kind of revenue sharing, and very few seem to succeed (at least that I know of). The ones who do succeed with revenue sharing are usually groups of experienced professionals who already knew each other.

Note: I have zero industry experience. Below is opinion.

50% of project revenue is directly shared between team members with royalty based contracts.

the remaining 50% revenue is for the company.

the company is split into 100 shares, up to 20 of those are available as "founding sharing" to be paid as a revenue share on total company income before subtracting company expenses.

I can point out a several possible problems. There are likely more than this, but these are just off the top of my head.

• What happens when someone does alot of the work, but drops out before the project is complete? Who gets his share, the person who did the 70% upfront, or the person who did the 30% remainder to the end?
  
• What if the person didn't "drop out" early but fully went as long as he could, but you underestimated how long the game would take, so he fully satisfied his contract to work two years, but the game took longer than two years to make? Does he still get 100% of what he was promised?
  
• What if the scope of the game is larger than you imagine, so you have to hire more people halfway through? If an artist did 100% of the work he promised you, but the game was bigger than you planned, and you had to hire someone else to go beyond the 100% originally planned for, as the game gets bigger in scope, and you have to bring in more people, that distributes more shares, and so everyone gets a smaller cut of the pie, despite doing 100% of the work they promised to do?
  
• If someone does 100% of the writing, but it's only a single month's worth of work, and someone does 20% of the art, but it's a full year's worth of work, who gets paid more, the person doing 100% of the writing or 20% of the art? Why? Are writers worth less than artists? What if the writer was really skilled? What if the writer is a poor writer?
  
• Suppose you released a game today, and you owe someone 20% of the game's profits. Thirty years from now, when the game sells one copy for $5, you have to track down that person and give them their $1 share? At that point, it costs you more money in administrative fees to distribute the shared profits than any member actually earns, because you've locked yourself into an never-ending contract of legal commitments.

You can easily think of "solutions" for some of these problems - but these solutions are just band-aids, they don't fix the root issues, and the more problems you have to band-aid, the more likely it's going to leak somewhere.

What are the root issues of revenue sharing?

• Employees have to support themselves during development, which means they need enough money already in their bank account to support themselves for two years (or three years or more if the project lead is inexperienced). Very few people already have >$50,000 in their bank accounts. Even if they do, if the game is a failure, they lose their life savings.
• Employee pay is unpredictable and not guaranteed, which can lead to stress especially if they are trying to raise a family or they have college debt, car loans, house loans, rent, emergency hospital visits, and etc...
• Not all work is created equal, but giving people different shares - or changing their shares on them later on - can make them feel unvalued.
• As the team size grows, employees see their share shrinking.
• ...probably some others I missed...

Sharing revenue with employees on top of regular payments is good! Forcing employees to depend on "future payment" is not good. If this is not what you were talking about, fine! But it's the impression you gave both Frob and myself, so it's what we responded to.

Well that is a very depressing read mr frob, doom and gloom without much reasoning behind it or offering no real advice for me to proceed other then a general "it cant be done many have failed and so will you" type of crap.

It's one thing to say someone is being "gloomy" because they think everything will result in a failure. But if they are saying one specific way isn't good and offer alternatives, you can't just dismiss it as gloominess.

It's like building a house:

Inexperienced person: "Hey, what do you think of this blueprint I drew?"

Professional architect: "Your foundation isn't thick enough and those beams won't support that kind of weight - the entire house will collapse."

Inexperienced person: "You're just being gloomy! I'm sorry that your years of professional experience and degrees in engineering has ruined your ability to pretend things are okay and to turn a blind eye to serious problems!"

He gave you an experienced and informed opinion that you want to ignore, so you claim his experience is flawed.

It is perfectly logical for you to question his opinions and not just blindly accept it.

It is illogical to attack his professional experience as an escape route so you can ignore answers you don't like.

Blindly rejecting knowledge can be just as harmful as blindly accepting knowledge.

If someone with actual experience is giving you real feedback and saying, "This specific way doesn't work", you ought to listen and consider. If you disagree, you ought to ask more questions, not claim that they are 'ruined' because they worked at a company that you don't like - that doesn't make sense, because it has nothing to do with the question you are seeking information on.

Just because someone doesn't immediately start listing the reasons, doesn't mean there isn't reason behind it. Further, he offered two other ways that more commonly result in success. His post clearly said, "Method A isn't good and often results in failure, but Method B and C work very well!" - that's not "doom and gloom", that's you not wanting to listen to answers you don't like.

You're absolutely welcome to ask "Why do you think Method A isn't good?", but that isn't what you did.

If you reread Frob's post, and reread your own, you might understand why we're confused by your response.

Nobody said "you can't make a studio"; we just said, "the studio system you're thinking about probably isn't the best and seems to have contributed to failures in the past". It's good to be stubborn enough to continue to press on to your goal. But if you welcome diverse views, you can probably avoid painful mistakes along the way to your goal. Go form a studio! But take all the advice you can, and consider it all, before coming to decisions.

Thanks, "Servant" that was a very educational reading, i was not looking for conclusions i was looking for analyses such as the first part of your reply - it helps me understand WHY something does work or not work rather then just being told it does not work, to me learning is about understanding not just the conclusion, no one would ever make any progress if they just accepted conclusions without explanations.

Zmorfius,

I'm sorry you didn't like my answer. Your question was "What do you think of my proposed Share model?" My answer was "Revenue sharing is generally not viable", followed by two alternatives that generally are viable.

If you wanted different answers, please ask better questions. I'll even give you links to some related questions asked in the forum about the same topic later in this reply.

On to your rebuttal.

Shame they ruined you at EA, to bad they did not give you a % huh

Yes, I worked for EA for several years.

They actually did give me a percent. They they are fairly good about giving their all employees a percent of ownership who want it. Since they are publicly traded it makes the process easy.

During the time I worked at EA directly, a part of the hiring package was a set of restricted stock units, or "RSU". RSUs mean the employee is granted a small amount of stock for every year worked, up to the first 3 years or 5 years or whatever the agreement is. Maybe they'll offer 300 RSU over 3 years, or 500 RSU over 5 years, or whatever the person negotiates. Thanks to the value of the stock increasing, my negotiated amount was around $20K of stock at the time it vested. True it is a tiny sliver of a publicly traded company, but that is a direct offer of company ownership. Not a future payout if they ever offer make money, but EA actually gave me several hundred units of their company.

Additionally through the stock purchase program every employee could get 'free' stock ownership. The ESPP (Employee Stock Purchase Program) is typical in publicly traded companies. You can direct up to a percent of your pay into a fund that either quarterly or semi-annually gives stock. It is bought at the several percent points below the lower of the price points at both ends of the purchase period and the previous purchase period. If the company did badly over the year you would get a free 15% bump in stock equity in the company. If the company did well (as it frequently has) you could invest a small amount, perhaps $3000 over the six month period in investment, then be granted $4000-$5000 worth of stock equity. In that area too, EA gave me several hundred units of their company.

And if that wasn't enough, many studios at the time (only some studios, and I'm not sure if they still do this) had ways for employees to get additional stock grants for contributions they made to the company. In this, too, EA gave me a percentage share of the company.

I'm not disappointed at all in that. I figure they gave me close to $70,000 worth of ownership in the company. I needed the funds for things like buying a home, but occasionally I look back at the stock grants and wonder what would have happened if I let it ride.

Well that is a very depressing read mr frob, doom and gloom without much reasoning behind it or offering no real advice for me to proceed other then a general "it cant be done many have failed and so will you" type of crap ... "any positive advice"

Correct, there is no way for me to recommend a variant of the model because this model is not a successful model.

You asked specifically "what do you think of my proposed model?" My direct answer is I think the model is terrible.

Instead of asking about other models, you went on about how my response was inappropriate. I suggest reading and reviewing this classic document, it is excellent advice.

Since you very nearly asked for my reasoning, here's a bit on why I think the model is bad:

The deal as described is not employment. It is not contract work. Workers are not partners, nor are they granted any form of ownership, nor is it self employment. The value of an individual contribution decreases and dilutes for every additional contribution, the more contributors and the more contributions there are the smaller the reward for those who joined early; for each worker it is in their best interest for the project to not grow, to not develop, and therefore to not succeed. For the worker it is "Do this unpaid work, invest with 100% risk in an extremely risky field of games, run by someone who is so amateur that they think that is a good model, you will get nothing from your efforts, and maybe in the future if this becomes a commercial success you might get a little payout." For the person starting the business it is potentially the founding of a business (if you properly incorporate, you have contracts or collaboration agreements that assign rights properly, you build a product, a brand, and IP) the business is based on a classic flimflam; the company provides nothing of substantial value and gets the rewards, those who buy into the plan get nothing, or at best, very little.

It is a pipe dream to start a business where everyone else invests, everyone else gives you money and time and resources, and you collect all the rewards. Great for the person running it, but terrible for everyone else.

Getting on to asking better questions, there are quite a few related forum posts. Most of then asked questions about ways they can build their project, rather than your post asking for opinion of a specific model. Here are a few that showed up in the search:

Has royalty share ever worked?

I need people ... how can I find them?

Dividing equity/profits in creative work

Question re paying programmers for indie game

Question about human and financial source management

Income distribution in independent team

Contracts and Profit Sharing

Revenue Sharing? -- Project Pay System

Also if you go with revenue sharing make sure you get in legal writing that anything worked on belongs to the company. Otherwise 6 months down the road a programmer or artist decides to jump ship and then tells you you are not allowed to use their code or art, they're completely in their right to do so.

I am sorry and i was clearly very wrong on a lot of things.

Also interesting to read from a insider that EA does not deserve the bad rep it has among gamers, or atleast not from a developers perspective.

I certainly do not find myself in this tho;

It is a pipe dream to start a business where everyone else invests, everyone else gives you money and time and resources, and you collect all the rewards. Great for the person running it, but terrible for everyone else.

But i am glad that you told me that is how you see it, and also further explained your reasoning behind your first post.

Now you have proven me wrong on-topic *bows down to Frob*

but the fact you came back to further explain would indicate you at least partially agree or understand how your first answer came across to me as negative without explanation.

If i am also mistaken on that last part you would be wise to keep in mind that my respons actually got me what i desired; a very full explanation from a industry expert, and it also encouraged other people to further elaborate.

Thanks Frob, ill remember to buy you a beer if we ever meet ;)

Also interesting to read from a insider that EA does not deserve the bad rep it has among gamers, or atleast not from a developers perspective.

There were a limited number of teams with serious problems who made the news. Ten years ago the "EA Spouse" blog and lawsuit were a real concern against a few specific people. With a company as large as EA there are always a few groups with problems, same with the other major publishers. Somewhere in the company there are managers doing stupid things, but overall they are not bad as far as employment goes.

As for gamers hating EA, I can understand some of the reasons.

EA adopted a policy to push things online, in large part because of piracy. Every metric I've seen at every company has shown a >90% piracy rate of offline games, and the push to online is the only effective way to overcome that. For various reasons Steam overcame the stigma of the 'always online' service, but many gamers still reject similar systems run by EA and Ubisoft and Microsoft as being evil for requiring an online connection.

Notch of Minecraft fame blasted into EA's a few years back. Some of his accusations are true enough, EA does buy small and rising talent both as upcoming studios and by headhunting individuals. But this is true across the board for corporations: Google, Apple, and others all frequently buy businesses and headhunt specific talent. Notch also complained about them being "cynical bastards" by investing in all areas of games, including the smaller spaces of "Indie". When EA helped a bunch of small titles get polished and published in the "EA Indie Bundle", where they were seriously trying to help bring some quality games out of obscurity, this had terrible backlash from many gamers who said that the moment a major publisher helped these tiny games they were no longer indie. The small groups who had pushed for EA to publish their games called it a great success. It is funny to me how when companies like EA and Ubisoft do this, they are evil, but when a company like Steam introduced Greenlight where they publish the game, all is well.

I've also read a lot over the years about the hate for DLC. Somehow a game that ships with DLC available is not a "full game". From a development perspective, if you want to have DLC in your game you need to build the technology and test it out, so any game with DLC possible is going to develop DLC packages and test them during development. In the several months of lead time between the final build and the street date there is plenty of time to polish off a few DLC packs. If you've got a complete game then you've got a complete game. Maybe the game ships with four storylines, that is complete, and having a pay-to-unlock for two additional storylines does not diminish the four in the main game. To many players, they feel they should be entitled to those two extra story lines when the product launched because they paid $60, and not pay for the two additional story lines that are being sold separately. Everything from inexpensive board games to expensive motor vehicles come with additional parts you can buy beyond the base model. When BoardGameGeek reviews a game that has five expansions at release they have no complaint, they review the base game and review how the expansions change it. When you see something like a bunch of empty buttons on a vehicle there is no cry of foul, that's just the base model of a fully-functional vehicle. Somehow when EA has a bunch of expansions, they are milking the customer for money and selling incomplete products.

In my view, like the schoolyard bully or the ancient scapegoat sentenced to die, it is popular for the common man to have someone to blame. EA's been targeted for that for many years. In some groups it is popular to hate on EA, reminding me of the scene in "Life of Brian" where it was popular to stone people to death because it was a fun group activity, not because the person actually deserved it.

There were a limited number of teams with serious problems who made the news. Ten years ago the "EA Spouse" blog and lawsuit were a real concern against a few specific people. With a company as large as EA there are always a few groups with problems, same with the other major publishers. Somewhere in the company there are managers doing stupid things, but overall they are not bad as far as employment goes.

As for gamers hating EA, I can understand some of the reasons.

EA adopted a policy to push things online, in large part because of piracy. Every metric I've seen at every company has shown a >90% piracy rate of offline games, and the push to online is the only effective way to overcome that. For various reasons Steam overcame the stigma of the 'always online' service, but many gamers still reject similar systems run by EA and Ubisoft and Microsoft as being evil for requiring an online connection.

Notch of Minecraft fame blasted into EA's a few years back. Some of his accusations are true enough, EA does buy small and rising talent both as upcoming studios and by headhunting individuals. But this is true across the board for corporations: Google, Apple, and others all frequently buy businesses and headhunt specific talent. Notch also complained about them being "cynical bastards" by investing in all areas of games, including the smaller spaces of "Indie". When EA helped a bunch of small titles get polished and published in the "EA Indie Bundle", where they were seriously trying to help bring some quality games out of obscurity, this had terrible backlash from many gamers who said that the moment a major publisher helped these tiny games they were no longer indie. The small groups who had pushed for EA to publish their games called it a great success. It is funny to me how when companies like EA and Ubisoft do this, they are evil, but when a company like Steam introduced Greenlight where they publish the game, all is well.

I've also read a lot over the years about the hate for DLC. Somehow a game that ships with DLC available is not a "full game". From a development perspective, if you want to have DLC in your game you need to build the technology and test it out, so any game with DLC possible is going to develop DLC packages and test them during development. In the several months of lead time between the final build and the street date there is plenty of time to polish off a few DLC packs. If you've got a complete game then you've got a complete game. Maybe the game ships with four storylines, that is complete, and having a pay-to-unlock for two additional storylines does not diminish the four in the main game. To many players, they feel they should be entitled to those two extra story lines when the product launched because they paid $60, and not pay for the two additional story lines that are being sold separately. Everything from inexpensive board games to expensive motor vehicles come with additional parts you can buy beyond the base model. When BoardGameGeek reviews a game that has five expansions at release they have no complaint, they review the base game and review how the expansions change it. When you see something like a bunch of empty buttons on a vehicle there is no cry of foul, that's just the base model of a fully-functional vehicle. Somehow when EA has a bunch of expansions, they are milking the customer for money and selling incomplete products.

In my view, like the schoolyard bully or the ancient scapegoat sentenced to die, it is popular for the common man to have someone to blame. EA's been targeted for that for many years. In some groups it is popular to hate on EA, reminding me of the scene in "Life of Brian" where it was popular to stone people to death because it was a fun group activity, not because the person actually deserved it.

Interesting read, I also have developed a dislike for EA as a gamer over the years for other reasons, but it is good to hear that at least EA seems to be not the bad place to work at as some people make it sound.

My personal peeve with EA stems from the trainwreck that is Origin, especially the EA customer support that should support Origin.

What happened some years ago when I wanted to try out the Star Wars Online game everyone was hyped about at the time (but died quickly afterwards as most MMOs do):

I tried to order the game over Origin. There was not really another way as far as I could see, and I never had any trouble buying games over Steam, and this was a big publisher, so what could possibly go wrong, right?

Turns out a lot, and it would take me 4 months to get EA to return my money. There was an error during the ordering process, and not having completed the order, I though I just had to redo it (I never got a valid serial, so there was no other way to join my friends ingame as fast as possible).

I soon found out that EA did charge my credit card twice even though I only got one serial.

Okay, things go wrong all the time, Origin was still quite new, and I thought that EA support could help me quickly since they should see a) I was charged twice, and b) only on of the serial # was ever used to access the game.

Well, it took me 4 months, and countless calls up the ladder from the lowliest support grunt somewhere in India to the supervisors of I don't know what, and even then a lot of explaining and talking until finally, one day, I found a charge back on my bank account.

After that, I vowed to never ever play an EA game again, even if Origin would die an ugly death and I didn't had to go through it again.

Now, that might sound ridicolous. But from a customers point of view, a) EA released a buggy storefront that not only crashed during checkout, it did so while charging my credit card, b) customer support was either quite incompetent and clearly not prepared for such a case, with nobody along the ladder until high up having the spine or interest to actually stick to my case without me calling them back every week, or worse, customer support was actually told to delay the case in hope that the customer would give up and EA could run with the money... given that my many calls most probably cost them way more than the 54 bucks I payed twice for the game, I guess its the former.

So yeah, I think there is a reason why gamers don't like EA too much. I'm most probably not the only one that got shafted by early Origin problems or their lousy support. That might be true about many other publishers too... but if you add the fact that a lot of EAs lineup are sequel of sequels of sequels, and there is very little new coming out without being tagged with a well known name (I got burnt by buying two different Modern Warfare games, paying full price for what was basically a glorified DLC), from a gamers point of view they do seem to be just after your money.

Again, same could be said about Ubisoft (I know they try harder, but I lost track of what should be the differences between the yearly sequel of Assasins Creed, besides being bigger than the last installment and being moved to a new historical era... granted I was not exactly a fan of the first game too), or any other AAA publisher in existence....

It just seems EA has done more misssteps than others, with the caveat that given their size, they had more tries at doing misssteps than others.

I really am on the fence on buying Mirrors Edge, and maybe ME2.... on one hand it sounds like an interesting game, and something different for sure. On the other hand I would have to bury my hatched with EA.... not sure I am ready to do that