I would track everyone's working hours. Pay them every month if I have the cash. If I do not have the cash to pay the team every month I would create agreement with them to pay after the game does some actual profit.

The agreement would go something like this.

Team member gets paid percentage of the net income of the game until something like 600,000 and the percentage is equal to the team members working hours percentage of the whole teams working hours.

So if I had 5 team members who worked together for 9,600 hours. One guy worked 1,200 hours. This guy would get 12.5% of the net income cash until something like 600,000 dollars. Which is actually 75,000 for the guy. Now another guy worked 2,240 hours so 23.3% of 600,000 is 139,800 dollars for him.

This to me seems quite equal to me. Though you can always go the way of the royalties and pay something for each asset of the game to those who created them, but with royalties you have to pay them as long as you keep selling the game and new update additions to your game would not bring any more money to your company.

It's not so super commercial project but if whole profit from game was about 100$/month, that would be nice. And maybe we wouldn't even like to play with all those formal agreements etc. Is that possible to let them just have a track of game profits so that they would be sure I'm not cheating? Maybe grant them access to profit statistics from the advertisement provider for example? We will more likely search for something like this I guess[/quote]

A couple points..
This is your idea and you are driving it. That means you get the lion's share of 'profits' (regardless of how large or how small). That is also reflected in how many hours you've spent creating the engine, etc.
The easiest/cleanest thing to do is to pay people flat fee, period. They give you stuff--you pay them money and you're done with it.

The reason for sharing 'profits' is either
a) you are a generous soul
b) you want to reduce your out of pocket expense.

By having someone create work for a 'share of the profits' (sometimes known as 'back end'), you are asking them to take on more risk-- There's virtually no risk in doing a job for a flat fee; there's lots of risk in sharing in the profits. So if you are asking them to take on more risk, there should be more reward for them.

ballpark I'd say keeping 80% of the profits for yourself, should decide to go down that route, isn't unreasonable.

And maybe we wouldn't even like to play with all those formal agreements etc[/quote]

You're playing with fire there. I get that a lawyer is expensive. And no fun. And it seems like a waste..


The problem is that this stuff gets complicated fast-- what exactly are "profits"? is that before or after things like web fees, marketing. Exactly who owns what? How is it that we can check to see if you're cheating us or not?
Odds are that won't be a problem, but say your game takes off? Or is bought by someone? Or you do it for another platform?

At the very least, have one clear, concise email summarizing exactly who gets paid what. Write this as a separate email AFTER you've come to agreement. Do not make it part of an email chain (the danger there is that you are thinking something 5 emails down still applies, but the artist doesn't, etc.).

Is that possible to let them just have a track of game profits so that they would be sure I'm not cheating? Maybe grant them access to profit statistics from the advertisement provider for example?[/quote]
This is usually taken care of in a clause in the contract that gives the others the right to audit you.

Bottom line-- like it not, when you create a game and put it out for the world to see (and buy), you have created a business. And if you have used other people to help create that game, then you have entered into business relationships with those people. And when you do that, a contract is everybody's best friend.

Brian

I thought about such agreement maybe - teammates are getting some % of profits until their earnings reach the flat fee estimated for their work.[/quote]

That's reasonable, except that in order to compensate the others for their increased risk (what if your game never makes a profit or drops off after only a few dozen downloads--in that case they get zilch!), you should increase the limit amount..

For example, if a sound person said they'd do the game for $1000, flat fee, It would be reasonable to see if they'd do it for $2000, payable as profits come in.
(btw 1000 was only an example. 10 minutes of music and 120 sound effects is quite a lot of work)

Of course, if you want to put on your ruthless businessman hat, you could just offer them their $1000 payable as you suggest (royalties up to a 1k cap) and see if they take it anyway. Or give them a choice of royalties up to 1k, or flat guaranteed fee of $500 etc. The art of negotiating takes more than a forum post

Note: in my book, I've found that being 'fair and reasonable' over the course of a career can pay off better in the long run than being ruthless, but that's just me..

Of course, this all needs to be spelled out very clearly in a written doc, whatever you decide upon..

Let us know how it goes!

Brian