Comments on: Team Member Contracts & Profit Sharing

By: Juuso Hietalahti

Juuso Hietalahti — Tue, 24 Feb 2009 14:11:35 +0000

Sure, go ahead.

By: Achmad Sofyan

Achmad Sofyan — Mon, 23 Feb 2009 18:10:24 +0000

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Achmad Sofyan S.Kom

By: Juuso - Game Producer

Juuso - Game Producer — Mon, 20 Feb 2006 08:53:10 +0000

@Jay: Thanks for the comment. Really nice.

By: Juuso - Game Producer

Juuso - Game Producer — Mon, 20 Feb 2006 08:51:55 +0000

Protection? Nothing – nothing solid at least. (You can try contract papers… but those won’t really count – if guy from let’s say China joins your team and you are from US – what are the chances to legally bind the other member to do work? There’s none. In real life.)

I’ve noticed one thing: When you trust others, they trust you. I wouldn’t concentrate on logging everybody’s activities – that’s simply impossible. If your time (and everybody’s time in the team) goes to arguing who should get what instead of trusting others to do their best – your team is not ready to make games. You can create rough guidelines & responsibilities to help divide the share & workload – but that’s about it. You really cannot *know* that people would do anything (or anything *productive* – I’ve seen that too) at all… you just have to focus on positive aspects and motivate people to act. Let people have responsiblities – mutually discuss & agree on them. Base profits on that. Have everybody to agree. Make sure the contract says: “if person leaves, then his share is divided among others and the team can use his work”.

You cannot have solid protection for this. That’s why you should screen the people who want to join your team. I think I’ll put another post about that subject in the future.

I recommend checking Leadership books: Kenneth Blanchard has written some excellent books about the subject. The One Minute Manager series is fun to read & very practical to use.

By: John

John — Sat, 18 Feb 2006 21:06:12 +0000

I read a lot of advice telling groups to make agreements about compensation and ownership before they actually start the game. If a group of 5 decides each member gets say 20% ownership and profits, what protection do they have against members dropping out, or simply not putting their fair share of effort in to the project?

By: Jay Barnson

Jay Barnson — Sat, 18 Feb 2006 17:32:14 +0000

At Singletrac, back in the glory days of Playstation 1 development, we had a great profit-sharing plan that unfortunately we never saw enough profit to really receive. But the concept was that a portion of the profits would simply be put in a profit-sharing pool, and that EVERYONE would get a portion of it weighted by their base salary. So even the office manager benefited if the games succeeded (the idea being that she helped everyone else be more productive).

The plan worked pretty well the first couple of years – everyone was focused on the proper goal (making sure ALL of our products were successful), and put in some insane amount of effort to giving them the best chance to succeed. There were few complaints about resources getting shuffled between games – the success of the other team’s game had the chance to go into your own pocket.

At other companies I saw that it was more project based – which meant the most experienced team members always gravitated to the low-risk sequels instead of the new products which really needed the most attention. More abstracted (and CAPPED!) bonus plans replaced profit-sharing or royalties, which further eroded the personal stake the team members had in even their own projects.

In the world of indie game development, of course, it’s a tougher call. Something like 95%+ of first-time indie projects never see completion, and most that do never see a profit. It’s pretty high-risk. It’s very difficult to attract qualified team-members based on promises of shared profits. That doesn’t mean they shouldn’t get a share if you do manage to succeed, of course.

By: Mike

Mike — Sat, 18 Feb 2006 13:11:43 +0000

Thanks that answered my question. Just one comment:
//Would you accept the suggested profit sharing if you were in other person’s shoes?
This is a hard question, if I were an unknown artist in the industry I would be glad to do something for free but if I were really good… So, yeah it always depends on who the person is.