Category Archives: Negotiation

Negotiation is mostly about getting an agreement where both sides win.

How to Get a Big Discount On Anything

Here’s a practical tip for anyone wanting to get a discount on purchases: ask for a discount and give something in return. While I don’t think it’s so practical to be a bargain hunter (and make false savings), I think sometimes it can be worth asking for a discount. If you have something to offer (it can be anything from publicity, links, referrals – anything) then you might as well ask to trade.

If you want discount on your favorite indie game, then how about asking if you could help translating (parts of) that game to different language?

If you want discount for a some game engine or development kit, then how about trading the kit to some software you have?

The key is to find something that the other party values, and then make the deal. If you don’t happen to own anything that the other party wants, you can still find some 3rd party and use his services to close the deal. For example, if company A sells computers and needs consulting on leadership but not marketing. You need a new computer and know marketing, but cannot consult on leadership training. You then realize that company B does leadership consulting, but desperately needs help in marketing. Since you can do marketing, you can tell company B to give leadership consulting to company A and in exchange you give marketing aid to company B. Now company A gets what they want, so they can give you a computer.

But a word of warning: don’t get too fixed on getting discounts. Sure… you can get them if you try, but I wouldn’t spend too much time on doing the deals. Simply get to the point fast and if the other party doesn’t want to make the deal, then stop wasting your time.

Everything can be negotiated. It’s another question if it’s worth it.

What Terence Hill and Bud Spencer Movies Taught Me About Haggling

I’m kind of a Terence Hill and Bud Spencer fan. They act in clueless stories concentrating on fighting with as many people as possible… yet there’s something in their movies that makes you want to watch them over and over.

Anyway, in their movie I’m for the hippopotamus there are scenes of haggling. In these scenes, these guys are always countering to money offers by saying “double at least”. The price should be at bigger – double at least.

While I doubt it’s efficient on every situation, I think this tip is worth remembering. If you are thinking of doing a $100 deal or $100,000 deal, you can always try to think bigger – “double at least” bigger. The next time you are about to make a deal, why not asking to double your price?

Who knows, it just might even work.

Lesson I Learned About Negotiating With People

In negotiations I remind myself about my the bottom line and concentrate on making a win-win deal.

Some time ago I was after an animator again and got a proposal. I asked a price from him, and he made me a good offer. Since I wanted to increase my chances for getting the job done well (after failing twice for getting the animations) I decided to suggest a new deal for him. I was looking at the big picture – not the price tag. I told him that I would double his offer, if he does a good job. I agreed to pay him the dollar amount he suggested, and told him that if he does a good job I would double the payment.

The price is still good for me, but I bet this offer motivates the guy to do a good job. I think I could have haggled the price lower, but I’m after getting the animations done not to do false savings. I believe in a long run I will save time and now I made sure it’s a win-win deal for both of us. I also believe that the animator now has more motivation to finish the job so he can get his payment, and the bonus.

The Most Important Guideline to Remember In Negotiations and Sales Meetings

There’s one extremely important thing to remember in negotiations: your bottom line. The bottom line is the point below you simply won’t accept any offers. That’s something I always keep in mind when negotiating – always.

Some people go to meetings to accept everything in order to make a sale or close the deal. This leads to worse situations, and worse deals in the future as the old bad deals are eating space from future good deals. These guys think that “it’s better to have a poor deal than no deal at all.” That’s rubbish – it’s much better to be 100% open for good deals than fill 100% time with poor deals that eat all the space from good deals. And when the poor deal is closed, these guys are most likely are in a situation where they simply don’t have space for good deals – and the poor deals are eating them alive.

Here’s a concrete example. Some weeks ago I got a business offer where the money looked pretty high, but so was the amount of goods I would have needed to give. I took a calculator and did some math to find out that the offer I got was simply too small and I had to reject the offer. The guy told “this is the best I can give”, but I replied: “Here’s my bottom line. I’ve sold same goods to other people for much higher price, and this good price I give to you is very good for both of us. Anything less would be very bad for me, and this price is really good for you if you compare it to here and here. I want to make sure we both are happy with this.” The guy said a few more times that “the price is too high”, but I told him: “This is the best price you can get from me for this quantity – and it’s really good deal for you.”

The guy said he needed some days to think about it, and couple of days later he agreed with my price. And it was good for both of us. If I had accepted a poorer deal I would have been going below my bottom line, and that’s not acceptable. Even though the guy said that it was his best offer… somehow he managed to pay what I wanted.

Maybe it wasn’t his bottom line after all.

How to Make a Business Offer

When you’re trying to get funding for your project, are hiring team members, want somebody to link to your website, or whatever it is you are trying to get, it’s important to think in terms of the other person. Don’t focus on what you want, focus on what they could get.

For example, if you are looking for some funding for your project and summarize your request “we need this much money in order to finish the game” it’s no wonder if you are getting nowhere. Instead you could show the potential money or reputation that the investors could get if they choose to fund your project.

If you want a new team member, you could show them how interesting project you have, show them a demo, and show them how fun it could be to work with your team.

If you want somebody to link to your website, don’t just ask people to link to you. Tell them that you would link back to them or that you would mention them in your blog, or whatever it is you could give to the other party.

Whatever it is you are after, don’t focus on what you want to get. Instead, focus on what you could give to others. After you’ve done that, the ‘get’ part comes naturally.

How Much Control Portals & Publisher Want?

Question:

How much game-content/technical control can an indie-developer expect to be imposed from those who manage a game-portal?

Example 1:
game portal: We need you to change the amout of score for each gem collected.
developer: Fine, no problem.

In this case, the management ask’s the developer to tweak rules\gamelogic issues, something which I dont mind much.

Example 2:
game portal: We want you to reduce the polycount on those 3D characters.
developer: From an artistic point of view, the characters needs this amount of polygons to look good.
game portal: We also want you to change the technology/method used to render characters shadows.
developer: Based on my experience on shadow rendering alghorythms, I suggest the current method should be used to be able to work on the widest range of display adapters.

In this case, the developer strongly disagree with the management about changing the inner workings of the game engine.

Answer:
You gave two good examples. The first example is very typical for portals: they will most likely give suggestions on how to improve the game and to make it more portal friendly. Very typical – you will see these kinds of requests. Not all of them has to be approved – but it’s possible that you need to tweak some elements in game for portals to accept the game. Some portals require more tweaking while others take your game easier.

The second example…. not going to happen. Portals won’t be interested in polycount numbers or shadow algorithms. This is something you have to manage inside the team. The portals will tell you if the game runs too slowly – and in this case it’s developer’s job to figure out how to optimize: whether to reduce polys, change LOD systems, tweak shadow algorythms or something else. Portals will tell you what results they want to see, but won’t be interested in methods – it’s irrelevant for portals whether you changed 200 or 3000 lines of code to meet their needs. They just care that you solve the problem.

Question:

Im using Blitz3D and BlitMax as my favourite development platforms. In my opinion this is fine as long as the game works and its fun to play. Does gameportals require the exclusive use of C++ as development platform?

Answer:
Definitely no – they won’t require exclusive use of C++ or other language (in most cases). I have never heard portals or game publishers to require use of certain language for 3rd party game developers.

It is true that some publishers might focus on “Torque games only”, “C++ games only” or “Blitz3D games only” but typically the question is about game platforms (PC, Mac, consoles…) rather than specific language. The publishers might have certain requirements like “must work with DirectX7 or higher” or “must run on GeForce2″ – but it would be very irrelevant for them to require certain language to be used. It’s the result (for example running on PC/DirectX7) that counts rather than method (must use C++).

Dealing With Publishers

MariuszH presented several questions about dealing with the publishers. First of all I must admit that the games I have been producing (or co-producing) haven’t had a retail publisher behind them so I needed to consult other people to help me with these questions.

Question:

Let’s assume, that we have just finished working on self-financed game, and now we want to get publishers (not only portals, but also retail ones). How to find and get in touch with CD/other publishers? How do we do that?

Answer:
I believe best way to reach any publishers or retail distributors is to announce a press release. We’ve got plenty of offers from different companies and organisations after we made press releases. Another way is to make sure your website has direct info. A Finnish game development company Frozenbyte is selling their Shadowgrounds game in retail stores. They have an announcement page where they list release dates for different countries and announce that they are interested in hearing from publishers/distributors.

If you want to personally contact publishers then start googling & asking in forums for potential publishers. Fetch their websites and phone or email them.

Question:

Are there other ways to contact & deal with publishers?

Answer:
It’s possible that publisher (or a company) has a brand (it can be any brand from toys to candy – or everything in the between) and you ask them to finance a branded game for them. When we worked on GEOM we got a contact from one major toys company: they wanted GEOM to display their graphics and they wanted to distribute GEOM through retail channels (as an addon for toys). The deal never happened – their offer was simply too low for us – but this example shows exactly what ways there are to deal with different companies.

Question:

We are a startup company, not established yet. So it’s almost impossible for us to find any company which would work with us. Though our games are not that bad. Some companies don’t even reply. So how to get noticed?

Answer:
It’s a tough world out there. Small indies are hard to spot – especially if there’s no legal entity behind them. I would seriously suggest establishing a company. If you want to make it fast & easy you can start as a sole proprietorship (that’s how I’m doing it). Notice: there are legal risks (like I’m fully responsible for my company – if the company gets sued, it’s basically me who gets sued) in establishing a company. If you have a company your image will be much better than having “just” a team. It gives you a professional look and will have an impact.

If you still don’t want to start a company then you really must prove that you have finished projects earlier and make sure your achievements are noted. Best way to get noted is to make a darn good game, and make the world know about it: press releases again play important role here.

Question:

How should we make our first contact? What should we place in our proposal? Do we want publisher to sign NDA, or maybe we will be asked to sign publishers NDA?

Answer:
Publishers most likely have a template for publishing proposals and for publishing contracts. If you make a press release you will most likely get proposals from different publishers requesting more info and making a preliminary proposal. Some might tell them the exact royalties they want to give. It really depends on the publisher.

On the other hand, if you are the one who is reaching for a publisher then I think there’s one important element what they expect to hear: money. They want to hear sales expectations, information about your company and they want to see your game. If possible, show rather than tell. Use screen shots, concept art and demos to present your game. If you are the one who approaches, then you must have a solid business plan behind your proposal. Here’s a small list of items what you should contain in the proposal:
- Company information (name, contact info, phone etc.)
- Proposed title and brief description
- What you are selling and for what need?
- Who is going to buy this game? And why?
- What’s the business logic – how will you sell the game? (Subscription based? One-time payment, Expansion packs and add-ons? What?)
- On what stage your game development is at the moment? (On development? Finished?)
- What’s new in this game?
- List top 4 competitors and explain why your game is better than them
- Is the game trademarked or patented? Is there legal protection?
- Any additional information (websites, resources, etc.)

If you want to keep your business proposal secret then you might want publisher to sign NDA. I’m quite sure the publishers will ask you to do the same. Just not a big deal – just sign it and continue negotiations.

Question:

What should we expect?

Answer:
I wasn’t sure if this question was “whether the publisher accepts” or “in terms of money”. I’ll answer both:
- If you are determined to find a publisher for your game I’m confident that you can expect to find one. Make it your goal and it will be possible. You might hear thousand “no”s before getting the first “yes”, but that’s part of the business.
- Money: It’s true that beginner indies put their expectations very unrealistic (I did – and I know many others…) at the beginning, but – I think that with proper business planning it’s possible to wield realistic figures & goals to expect. If you have a vision – go forward to it. My friend & business partner Tim is a great example of ‘making it big’ – he simply won’t accept “no”. He says he “must get the money” and he does what it takes to get the money. Now he’s got several big companies interested in his igLoader (system that let’s downloadable games to be played in browser). Just be enough stubborn and you’ll make it. Aim high, think big.

Question:

Can we expect any upfront money?

Answer:
Usually the patter is this: For retail (boxed) deals yes. For other proposals – hardly. Some (digital online) indie publishers might offer you upfront money, but as said: it’s not common.

Question:

How much [upfront money/sales] we can expect in different markets (USA / Germany / UK / Russia / Poland / etc)?

That really depends on your game. This is really hard to say. For example, in Germany there are relatively large amount of ‘real’ strategists who play all kinds of strategy games. These kinds of games would most likely get better deals. Very roughly speaking I would say the largest areas are: USA and EU. Russia is a growing market (but the price level is very low which makes it harder to make good profits from there). China and Eastern Asia are big & growing markets and all kinds of (anime) RPGs sell well there. Countries like UK, Germany or Finland are very different. UK is a big seller but you won’t see many sales in Finland.

Frozenbyte (selling their Shadowgrounds in different countries) expects to see total sales of 100 000 units (total sales from all countries). They have listed the following territories: North America, Finland, Germany, Austria, Switzerland, France, Benelux, Spain, UK, Italy, Russia, Australia & New Zealand and Scandinavia. Whether your game will receive 1000 or million or zero sales depends on your game and your goals. It’s impossible for me to say how much you will see. I presume you could expect seeing maybe $1 upfront (per estimated unit sold) for retail games: if the publisher estimates sales to be about 2000 per year, you might get $2000 upfront. This is only one rough example and the actual figures might be totally different.

Team Member Contracts & Profit Sharing

I’ve got two questions related to team member contracts so I decide to answer both of them in the same post.

Question:

Let’s say I want to make a team, a programmer and a graphics guy. What should the share in money be? What is the best solution when it comes to money in teams?

Answer:
I believe that the best policy (for indie team) is this: You – as the game producer – should make sure that everyone in the team benefits. Don’t make this mistake that some team leaders/idea owners do: never hog the profits so that you get most of the profits just because you want. Aim for win-win situation. Ask and discuss openly about the profits. I generally think that artist (sounds & music) should get one time payments and rest is shared evenly among programmers/producers depending on the contributed tasks/hours they spend. Basically – if all team members put roughly 10 hours per week then each should get an equal share. I don’t believe making such a big noise about who is the most talented or who contributed 70 hours and who 80 hours . If your team is focusing too much on how to split the revenue then I think there’s something wrong with the team. You could make a plan and set profits according to the finished work (like gameplay coder could get more than interface coders). Make rough guidelines. Remember to include profit sharing also in the updates – usually game programmers need to update & fix bugs in the game after the release. Make sure you take this into consideration when producing the game. That is actually one reason why I think one-time payments for artists is good: they usually don’t do much work after the initial launch.

The most important rule (in everything in life): Would you accept the suggested profit sharing if you were in other person’s shoes? Think how you would feel if you were the artist/programmer doing the assigned task and getting the profit you suggested.

I won’t go into greater details for bigger companies… but generally I think hourly rates and team bonus systems are a good way to go.

Question:

I am trying to get into the mobile game market and to do so, I definitely need to hire an artist. Now, some artists will sell their work for a flat rate. But does this mean that the work now belongs to you? I know that this depends on the artist and that it all should be worked out before hand, but some tips or links to more information would be great.

Answer:
You partially answered to your question: yes, it depends on the artist – and the contract you make with them.

I would simply define this in the contract: Write down that all rights of the artist’s contribution is owned by you (or your company) and that artist reserves only the right to show the art in his portfolio (if he wishes to do so). All rights are totally transferred to you and the artist cannot re-sell or anyway modify the work for another company. I would hire a lawyer if you need to do proper paperwork. There’s a guy called Tom Buscaglia, a game attorney available for indies. Check it out in case you need more assistance.