Comments on: Why Game Publishers Get 70% And Game Developers Only 30% of The Royalties?

By: Chavez

Chavez — Sun, 02 Jul 2006 12:35:38 +0000

Maybe now it is good time to name some publishers that are worthy to cooperate with?

Can you tell your top10 ?

Can a portal (like bigfish or realarcade) do the same or better job in promoting and selling you game like a publisher (for example popcap, garagegames, gametrust, trymedia,..etc..?)

In the case he (portal) can spread your game better or equal to a publisher – and you can get f.e.30% of the full price 19USD from a portal – then i think it is better to go for the portals and not for publishers right?
because publisher will get for example 50% from his portal partners – and then give developer 30% from his 50% – and developer ends up with 1 or 2 $ for a sold unit.

right?

what do you think?

By: Juuso - Game Producer

Juuso - Game Producer — Thu, 16 Mar 2006 07:06:27 +0000

@Jay: Scott Miller’s blog is great reading, I recommend that too.

And I must point out that publisher CAN pay the development costs. Developer does it in most cases, that’s true – but not always. That post is bit dated, but contains still useful information.

1) Publisher advance
It’s not a loan. Or – as you said: it’s a strange loan that you don’t need to pay back. Either way it cannot be said that *developer* is paying the development: publisher is – If the game won’t sell – you don’t have to pay the advance back (=publisher had to).

2) Investors
It’s possible to get investors (who can own for example 49% of your company – leaving the majority 51% to you). Investors can fund the development – and again this money is not necessarily needed to pay pack. Often it is, but not always.

But, as you stated: most of the time it is the *developers* who pay the development costs.

(It could be argued whether it’s *customers* or developers who pay the development, but I don’t want to get into that ;)

By: Jay Barnson

Jay Barnson — Wed, 15 Mar 2006 17:41:20 +0000

I refer you to a great blog post by Scott Miller called “Royal Tease”

http://dukenukem.typepad.com/game_matters/2003/12/royalties_and_a.html

The publisher does NOT pay for the development costs. The developer does in most cases. What the publisher does is give them a loan, effectively – but one that may not have to be paid back in full if the game doesn’t sell well.

By: PeterM

PeterM — Wed, 15 Mar 2006 09:49:30 +0000

@Twist and Juuso,

In regular (non-indie/casual) game development, the money that the publisher pays you to make the game is usually an advance. So if the game turns a profit, you don’t see any of it until you’ve paid back the money that the publisher loaned you.

Which isn’t quite such a great deal.

By: Jake Birkett

Jake Birkett — Wed, 15 Mar 2006 09:26:35 +0000

The portals DO make a profit of course. However, as the main blog says I’d rather have 30% of their sales than 100% of sales made from my own site, which would be very low unless I put in a lot of time and money making it a big, well known site.

By: threewayswitch

threewayswitch — Wed, 15 Mar 2006 09:26:12 +0000

I work for the 3rd-party assesment team of an internationally-renowned games publisher. We look at deal like this all the time, and it’s not so cut-and-dried as you might think. Sometimes a product will come in fully formed, simply needing a distribution deal and/or marketing agreement. This can come in the form of a royalty, one-off payment or share of totatl revenue. Similarly, a product might come to us in concept stage and the royalty/ returns are worked out by balancing subsidising the developement with needed royalty (ie the more money you sink in the outset, the better the royalty you require). Deals are made on the basis that developers are paid to make the best game they can, publishers sell it for the highest price to the widest audience they can, and as a result everyone’s happy. But that’s not to say that the publisher won’t try to make money off the back of the deal ;].

By: Ville

Ville — Wed, 15 Mar 2006 09:09:35 +0000

And those percentages are of course open for debate. If the publisher comes to you, you’re in a better position to ask for more. If you’re in a position where you have to plead for them to take your game, you’re bound to get a bad deal.

If someone has experiences from these negotiations, I’d love to hear them.

By: Juuso - Game Producer

Juuso - Game Producer — Wed, 15 Mar 2006 06:59:47 +0000

@Twist: Oh… in case of big publishers – don’t expect to get 30% :) They will pay salary & manage the expenses. Good point.

By: Juuso - Game Producer

Juuso - Game Producer — Wed, 15 Mar 2006 06:58:55 +0000

This 70% was just one example. Some publishers might take “50% of net income” (which can be the same as “70% of gross income”).

Is it fair? Well – it depends. I think you should try to look for win-win deals. Something where you will benefit, and so does the publisher.

I also think that Non-casual don’t need publishers – maybe deals with retailers/distributors, but that’s it.

By: Ville

Ville — Wed, 15 Mar 2006 06:43:43 +0000

My opinion is that the 70 percent does not come from their expenses, it would be ridiculous to say that they did spend that much time and money on just marketing/support. I believe the percentages come from the point of view that publishers often have an upper hand on developers. The developer may be small and never heard of, and the publisher an established business with experience in swindling you out of your share.

There is one notable exception, namely casual games where the developer actually does spend very little time developing it, and the publishing can amount to a larger share of the costs.

I strongly believe that non-casual indie games don’t need publishers. You can do it all in house, even gathering that user base.