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    • By RyRyB
      I got into a conversation awhile ago with some fellow game artists and the prospect of signing bonuses got brought up. Out of the group, I was the only one who had negotiated any sort of sign on bonus or payment above and beyond base compensation. My goal with this article and possibly others is to inform and motivate other artists to work on this aspect of their “portfolio” and start treating their career as a business. 
      What is a Sign-On Bonus?
      Quite simply, a sign-on bonus is a sum of money offered to a prospective candidate in order to get them to join. It is quite common in other industries but rarely seen in the games unless it is at the executive level. Unfortunately, conversations centered around artist employment usually stops at base compensation, quite literally leaving money on the table.
      Why Ask for a Sign-On Bonus?
      There are many reasons to ask for a sign-on bonus. In my experience, it has been to compensate for some delta between how much I need vs. how much the company is offering.
      For example, a company has offered a candidate a position paying $50k/year. However, research indicates that the candidate requires $60k/year in order to keep in line with their personal financial requirements and long-term goals. Instead of turning down the offer wholesale, they may ask for a $10k sign on bonus with actionable terms to partially bridge the gap.
      Whatever the reason may be, the ask needs to be reasonable. Would you like a $100k sign-on bonus? Of course! Should you ask for it? Probably not. A sign-on bonus is a tool to reduce risk, not a tool to help you buy a shiny new sports car.
      Aspects to Consider
      Before one goes and asks for a huge sum of money, there are some aspects of sign-on bonus negotiations the candidate needs to keep in mind.
      - The more experience you have, the more leverage you have to negotiate
      - You must have confidence in your role as an employee.
      - You must have done your research. This includes knowing your personal financial goals and how the prospective offer changes, influences or diminishes those goals.
      To the first point, the more experience one has, the better. If the candidate is a junior employee (roughly defined as less than 3 years of industry experience) or looking for their first job in the industry, it is highly unlikely that a company will entertain a conversation about sign-on bonuses. Getting into the industry is highly competitive and there is likely very little motivation for a company to pay a sign-on bonus for one candidate when there a dozens (or hundreds in some cases) of other candidates that will jump at the first offer.
      Additionally, the candidate must have confidence in succeeding at the desired role in the company. They have to know that they can handle the day to day responsibilities as well as any extra demands that may come up during production. The company needs to be convinced of their ability to be a team player and, as a result, is willing to put a little extra money down to hire them. In other words, the candidate needs to reduce the company’s risk in hiring them enough that an extra payment or two is negligible.
      And finally, they must know where they sit financially and where they want to be in the short-, mid-, and long-term. Having this information at hand is essential to the negotiation process.
      The Role Risk Plays in Employment
      The interviewing process is a tricky one for all parties involved and it revolves around the idea of risk. Is this candidate low-risk or high-risk? The risk level depends on a number of factors: portfolio quality, experience, soft skills, etc. Were you late for the interview? Your risk to the company just went up. Did you bring additional portfolio materials that were not online? Your risk just went down and you became more hireable.
      If a candidate has an offer in hand, then the company sees enough potential to get a return on their investment with as little risk as possible. At this point, the company is confident in their ability as an employee (ie. low risk) and they are willing to give them money in return for that ability.
      Asking for the Sign-On Bonus
      So what now? The candidate has gone through the interview process, the company has offered them a position and base compensation. Unfortunately, the offer falls below expectations. Here is where the knowledge and research of the position and personal financial goals comes in. The candidate has to know what their thresholds and limits are. If they ask for $60k/year and the company is offering $50k, how do you ask for the bonus? Once again, it comes down to risk.
      Here is the point to remember: risk is not one-sided. The candidate takes on risk by changing companies as well. The candidate has to leverage the sign-on bonus as a way to reduce risk for both parties.
      Here is the important part:
      A sign-on bonus reduces the company’s risk because they are not commiting to an increased salary and bonus payouts can be staggered and have terms attached to them. The sign-on bonus reduces the candidate’s risk because it bridges the gap between the offered compensation and their personal financial requirements.
      If the sign-on bonus is reasonable and the company has the finances (explained further down below), it is a win-win for both parties and hopefully the beginning a profitable business relationship.
      A Bit about Finances
      First off, I am not a business accountant nor have I managed finances for a business. I am sure that it is much more complicated than my example below and there are a lot of considerations to take into account. In my experience, however, I do know that base compensation (ie. salary) will generally fall into a different line item category on the financial books than a bonus payout. When companies determine how many open spots they have, it is usually done by department with inter-departmental salary caps.
      For a simplified example, an environment department’s total salary cap is $500k/year. They have 9 artists being paid $50k/year, leaving $50k/year remaining for the 10th member of the team. Remember the example I gave earlier asking for $60k/year? The company cannot offer that salary because it breaks the departmental cap. However, since bonuses typically do not affect departmental caps, the company can pull from a different pool of money without increasing their risk by committing to a higher salary.
      Sweetening the Deal
      Coming right out of the gate and asking for an upfront payment might be too aggressive of a play (ie. high risk for the company). One way around this is to attach terms to the bonus. What does this mean? Take the situation above. A candidate has an offer for $50k/year but would like a bit more. If through the course of discussing compensation they get the sense that $10k is too high, they can offer to break up the payments based on terms. For example, a counterpoint to the initial base compensation offer could look like this:
      - $50k/year salary
      - $5k bonus payout #1 after 30 days of successful employment
      - $5k bonus payout #2 after 365 days (or any length of time) of successful employment
      In this example, the candidate is guaranteed $55k/year salary for 2 years. If they factor in a standard 3% cost of living raise, the first 3 years of employment looks like this:
      - Year 0-1 = $55,000 ($50,000 + $5,000 payout #1)
      - Year 1-2 = $56,500 (($50,000 x 1.03%) + $5,000 payout #2)
      - Year 2-3 = $53,045 ($51,500 x 1.03%)
      Now it might not be the $60k/year they had in mind but it is a great compromise to keep both parties comfortable.
      If the Company Says Yes
      Great news! The company said yes! What now? Personally, I always request at least a full 24 hours to crunch the final numbers. In the past, I’ve requested up to a week for full consideration. Even if you know you will say yes, doing due diligence with your finances one last time is always a good practice. Plug the numbers into a spreadsheet, look at your bills and expenses again, and review the whole offer (base compensation, bonus, time off/sick leave, medical/dental/vision, etc.). Discuss the offer with your significant other as well. You will see the offer in a different light when you wake up, so make sure you are not rushing into a situation you will regret.
      If the Company Say No
      If the company says no, then you have a difficult decision to make. Request time to review the offer and crunch the numbers. If it is a lateral move (same position, different company) then you have to ask if the switch is worth it. Only due diligence will offer that insight and you have to give yourself enough time to let those insights arrive. You might find yourself accepting the new position due to other non-financial reasons (which could be a whole separate article!).
      Conclusion/Final Thoughts 
      When it comes to negotiating during the interview process, it is very easy to take what you can get and run. You might fear that in asking for more, you will be disqualifying yourself from the position. Keep in mind that the offer has already been extended to you and a company will not rescind their offer simply because you came back with a counterpoint. Negotiations are expected at this stage and by putting forth a creative compromise, your first impression is that of someone who conducts themselves in a professional manner.
      Also keep in mind that negotiations do not always go well. There are countless factors that influence whether or not someone gets a sign-on bonus. Sometimes it all comes down to being there at the right time at the right place. Just make sure you do your due diligence and be ready when the opportunity presents itself.
      Hope this helps!
    • By James Britton
      Video game industry is at its best with $108.9 billion in global revenue for 2017, representing a 8% growth compared to 2016. According to Newzoo, there are currently more than 2.2 billion active gamers across the globe.
      In spite of this massive growth in gaming industry, the video game retailer GameStop has been struggling over the past few years as video game purchases from retail stores continue to decline due to the strong growth in the e-commerce and competition from online giants like Amazon.
      The Grapvine, Texas-based company, which had a total of 7,535 stores at the end of its fiscal 2016, anticipated to open about 100 new stores as well as close about 130 Video Game Brands stores worldwide and 55 Technology Brands stores in fiscal 2017.
      The demand for Nintendo Switch drove GameStop's sales up 15% in the recent quarter. https://news.alphastreet.com/gamestop-q4-2017-earnings/


      View full story
    • By James Britton
      Video game industry is at its best with $108.9 billion in global revenue for 2017, representing a 8% growth compared to 2016. According to Newzoo, there are currently more than 2.2 billion active gamers across the globe.
      In spite of this massive growth in gaming industry, the video game retailer GameStop has been struggling over the past few years as video game purchases from retail stores continue to decline due to the strong growth in the e-commerce and competition from online giants like Amazon.
      The Grapvine, Texas-based company, which had a total of 7,535 stores at the end of its fiscal 2016, anticipated to open about 100 new stores as well as close about 130 Video Game Brands stores worldwide and 55 Technology Brands stores in fiscal 2017.
      The demand for Nintendo Switch drove GameStop's sales up 15% in the recent quarter. https://news.alphastreet.com/gamestop-q4-2017-earnings/

    • By Ann Chufarlicheva
      Hey. I'm new on this forum. I and my friends create our first game. I'm drawing graphics and doing animation for our game. Well, I want to ask how much the artist or animator earns in the gaming industry. I plan to move to the US later this year. I want to try work in the gaming industry. I am from Russia.
    • By Vik Bogdanov
      DMarket, the world’s first and only working marketplace on blockchain for in-game items trading, today announced the release of its product version 2.0 Beta.
      One of the key features of v2.0 is Steam integration. It allows users to trade and exchange Steam-stored in-game items on DMarket, providing a whole new model of assets monetization. The annual turnover of in-game assets trading is over $10 billion, and it has the potential to reach $450 billion. The average monthly trading volume of skins globally exceeds 60 million items. 
      DMarket v2.0 also features an upgraded version of the Blockchain Explorer that has been supplemented with a cold wallet functionality for enhanced user security.
      The company launched version 1.0 of its marketplace in October 2017. DMarket Founder’s Mark, a unique piece of memorabilia commemorating the marketplace launch, has already risen in price from a few cents to thousands of dollars. To date, the trading volume of DMarket Founder’s Mark is 486,000 DMC.  
      Most recently, DMarket signed a partnership agreement with Unity Technologies, the world’s most widely-used real-time 3D development platform. This will allow any Unity-based game to easily plug into the DMarket API and integrate in-game items into DMarket blockchain for trading and exchange. Under the agreement, DMarket will build a custom SDK for Unity games integration that will be officially certified by Unity and presented and supported in the Unity Asset Store.
      About DMarket
      DMarket is the world’s first and only working blockchain-based marketplace for trading in-game items and turning them into real assets.
      To learn more or test DMarket in action, check out dmarket.com

      View full story
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Can I get a critique on a Profit Sharing Agreement?

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So I recently started a Hobbyist Project on Game dev, to turn a project I've already created into a video game. I've recently hired a programmer I think looks promising and we are getting to work on the project. I don't expect profits and my main goal is to complete the project, but just in case I figured I should start a contract between us.

 

I know it's a good idea to just get a lawyer, but for a project that I have no *expectations* of making money, I'd like to keep the costs down. Someone suggest I just make a contract in plain english, so I did, I'm wondering if anyone here can critique it or offer advice. One possible complication is that I am in Canada and my programmer is in Saudi Arabia.

 

The basic thing I'm trying to get across is:

 

1) I still own the rights, including whatever he makes

2) We both get paid if the game makes money

3) It lasts for 5 years.

 

Anyways, here it is:

 

--------------------------------------------------

 

This Profit Sharing Agreement is entered into as of (Date) by (My Name) located at (Address) and (Second Party), both of whom agree to be bound by this Agreement.

 

Whereas, (My name) has developed Wars of Keridor (“the game”) and holds ownership of all current intellectual property rights in this product, in addition to those developed by (Second Party) for the creation of the game.

 

(Second party) may not use works created for the game unless for a function that does not compete or hinder the sales of the game, or use its likeness in anyway.

 

The contract will be binding if the game is sold with coding created by efforts by (Second party). If the game is sold with no work created by (second party) the contract will be void. The contract does not apply to any derivative works, including but not limited to expansions or sequels where (second party) does not contribute additional work.

 

(My name) and (second party) will share profits realized from the sale of the game as follows:

 

% of net income will be kept by (My name)

% of net income will be kept by (Second party)

 

(Second party) will be paid any profits realized at these times:

 

At the end of each month following the release and sale of the game, if the game makes $250 Canadian or more within that time period.

 

Otherwise, at the end of each 3 months following the release and sale of the game, if the game makes $250 Canadian or more within that time period.

 

Otherwise, at the end of each year following the release and sale of the game.

 

This profit sharing contract will become null and void at the end of 5 years of the release and sale of the game.

 

------------------------------------------------------

Edited by monalaw
putting original OP back because seriously WTF

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Just some thoughts before the real lawyers get here...

Who decides what net income is?

Who defines what "sold with no work created by" means - and who checks it?

The whole "....in addition to those developed" clause is very vague. It doesn't help that terms like "for the creation of the game" are basically meaningless. Just like "coding created by efforts by". You're dancing around the substance rather than encoding it.

If you have to do this yourself, I'd advise less faux-legalese and a more precise plain English approach. e.g. References to code should be clear and unambiguous, such as "Code submitted to the project repository becomes property of (My name)" (although how reasonable that is, considering you're paying nothing until it ships, is something else. And some jurisdictions will say that's unenforcable until you've made some sort of payment or other consideration anyway.)

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I can see that you don't know much about copyright law, which isn't surprising considering you're trying to get people to work for you with this naïve model. But only a lawyer is legally allowed to give legal advice, and I am not a lawyer. What I will say is that what you're trying to do is called a "copyright assignment".

And the other thing I will say, if you go ahead with this, whoever was foolish enough to get in on it will figure out how bad it is for them and drop out sooner or later. Probably sooner.

If you really want to develop a game, you have three options:

  1. Do it yourself.
  2. Pay someone a proper wage.
  3. A combination of both (1) and (2).

What you are currently planning on doing simply won't work. It never has worked, and it's probably attempted by newbies hundreds of times a year.

Edited by JulieMaru-chan

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37 minutes ago, peterfc said:

I am in Canada and my programmer is in Saudi Arabia.

Then any agreement you make will be unenforceable. You cannot afford it.  Everything is based on good will, and often that breaks down when money happens.

Profit sharing is usually a bad thing for accounting and the few companies that used to do it have stopped due to complications. Are you prepared for the issues of sending and reporting taxable money to Saudi Arabia?

As to your agreement...

46 minutes ago, peterfc said:

I know it's a good idea to just get a lawyer

Yes. The agreement is pretty bad.

46 minutes ago, peterfc said:

1) I still own the rights, including whatever he makes

The agreement doesn't say that anywhere I can find.

I can see it says you currently hold all rights to the game, but there is nothing that assigns or transfers the rights of whatever they create over to you; it isn't yours and you would have no right to use the assets. 

48 minutes ago, peterfc said:

2) We both get paid if the game makes money

I don't see that in your agreement at all, or at least in the way you expect it.  Instead I find an EXTREMELY DANGEROUS mix of the words "profit" and "income", along with the vague term "if the game makes $250..."

Gross revenue, net revenue, net income, and profits are all rather different.  Games often require a large net revenue to produce a tiny profit. Your agreement says that if you make a small profit you must give up most of your net revenue. 

50 minutes ago, peterfc said:

3) It lasts for 5 years.

This one is actually rather complicated, and your agreement doesn't handle it well. Does it survive if either of you go out of business? Does it survive if you or he enter bankruptcy? Does it survive if either of you are bought out? Can either of you terminate the agreement, cancel it, or buy the other person out?

I know about four standard exit forms (voluntary/involuntary and you/them) and none of those four are addressed.

 

Get a lawyer and do it right, or don't bother at all.

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