Interest from publisher

[Cunning Plan]

Recently received an email from a company that will remain nameless for confidentiality purposes. They are keen on the genre that I am developing a game for (in that they like the sport and there isn't currently a huge amount of competition).

Their current line of business is as a distribution company, however they are looking to move into publishing and see my product as a good choice for one of their first releases. They believe an independent publisher joining forces with an independent developer would be a good match (and to a certain extent I agree).

Having had recent discussions with them it seems very promising - they are keen to build up a series of games, and admit that they are willing to conceed that as an indie developer, timescales might be longer. However they like the approach I am taking and seem keen to help in everyway possible. They do though want to own the rights to the brand name. In addition they wish to sell the game offline (on the shelves in territories suited to the product) I will receive loyalties of between 10-20%. They are also looking at online digital distribution where loyalties will be between 30-50%.

They seem very keen on the product and are willing to invest in a professional website and the like.

What do you guys think of all this?

:)

[GBGames]

Warning: I am still struggling to start up my own business and so have no real experience with the business.

That said, I would say you need to think about what is important to you. Do you want the rights to your IP, or does having a designated publisher seem more important?

I personally would prefer to keep the rights to my own creation. Being indie to me means being my own. Other people might not care that much about their own creation, thinking of it as a product they sold.

As far as the numbers go, I am not sure whether or not they can be considered good. Do you know if this company can guarantee a certain amount of exposure? Do they want exclusive rights to distribute, or can you also try to sell the game on your own as well? Will they give you a decent advance for development, or are you expected to fund yourself? With an advance I can understand giving up your IP, but otherwise...

[Jack Norton]

I must warn you... all publishers I've talked with said lot of lies.
They changed their mind in less than 3 days, changed the contract details and then get surprised if I didn't sign it, and so on.
If you want you can PM me the name of that publisher, maybe I know who is and I can give more advice privately.

Anyway: always remember to stop the easy enthusiasm when talking with publishers... ! :D

[Bluecat]

The first thing you should do is to find yourself a lawyer.

That's the second and third thing you should do as well. It's really that important.

The fact that they want you to sign away the IP rights without funding the development (I assume from your post that's the case) sends up a red flag to me.

Have a look at the Dexterity article "Basic Negotiating for Fun and Profit" http://www.dexterity.com/articles/negotiating.htm and see where you stand and what you want to do.

[cliffski]

Ive had quite a bit of experience now with online and retail publishers.
heres my advice:

Will they pay you an advance in the thousands of dollars range? if not, just ignore them, they arent serious, and possibly even conmen. Distribution is big business, a thousand dollars is nothing to a distributor.

Give them a price to give up your IP, and one where you keep it. I'd try to keep your IP. If the game is a sudden hit, and you gave away tens of thousands of dollars worth of sequel rights, you will be very annoyed ;)

Try and get the right to keep selling your game online. Personally this is a deal breaker for me. Most retail publishers dont achieve anything at all online, and if they are taking exclusive online rights, thats a deal breaker, unless they are paying a HUGE advance ;).

Make sure you know what rights you are signing. is this retail worldwide? or just one country? Are they going to sell it standalone or part of a bundle. If its bundled with other games, even 20% of the price may amount to virtually nothing.

There is always potential to make good money from retail (I've just signed 2 retail deals myself, after literally 7 years of talking to various publishers), but also potential to get ripped off big time. (Ive had so-called publishers just take my game and stick two fingers up at me, keeping all the cash). If you have heard good things or bad things about this company, take that strongly into account when you negotiate.

And remember, EVERYTHING is up for negotiation. Don't accept any crap about standard contracts and standard royalty rates. EVERYONE gets a different deal. Just reading about some of the rates other have got with a big online publiher makes me shudder.

And good luck! Retail needs more indie games ;)

[Mark Fassett]

If it were me, I would make the sale of the IP seperate from the publishing contract if at all possible. This is one of the biggest things I hate about publishers and their deals with developers. Rarely does a fiction book publisher ever acquire IP from authors. They buy the rights to publish the book in a particular market for some period of years. Maintaining control of your IP is of prime importance - especially if they're only going to pay you minimal sums of money, or even a royalty only deal. If you created the IP, you shouldn't give it up except for HUGE sums of money. Enough to fund the current game and a couple more titles.

[Coyote]

Publishers never really fund the development - they simply give you a loan for you to fund the development yourself. The upside is that you don't HAVE to pay it all back if the game doesn't sell enough copies to pay back the loan on your royalty payments. The downside is that not only will you not have to, you generally won't be able to.

Don't give away your IP rights for the chance to be abused and short-changed by a publisher. Remember - unless they are one of the big names, with lots of money to throw at you and a good reputation - you are taking a chance on them as much as they are taking a chance on you. If you sign over your IP rights, you are effectively putting your fate in their hands. And if you don't like the deal later - well, they own the IP, so they can turn around and get some other developer to do the sequels and make them more money, you can get completely squeezed out of the equation.

You also need to think about what other demands they are making with their offer. Are you going to be stuck in a situation where you are obligated to keep cranking out updates and patches forever to get them to stop withholding payments?

Like the advice above - get yourself a lawyer. Don't sell yourself short. You want this to be more than just a learning experience. Be aware of ALL of your other options, including self-publishing or other publishing offers. Remember - they aren't a white knight coming to save you. They are strangers flattering you and offering to be your partner - and take the lion's share of the profits from your hard work. Be absolutely positive of what they are bringing to the table, and that it makes sense to your business.

Also be certain that you have means at your disposal to enforce their keeping to their side of the bargain. You don't want to be stuck in a situation where they aren't returning your calls, aren't sending you checks your know are due, but you have no recourse except for a very costly court battle that will likely eat up whatever royalties may or may not be due to you. Make sure you retain some leverage you can keep using later. Maintaining the IP and rights to move the subsequent products to a different publisher is a HUGE bargaining chip.

Well, there's my ranting and raving from a guy who's never had to go through all that himself (yet), but I've seen some of the pitfalls from within an affected company, and I've seen it happen to others. Just be really careful, and don't go in with stars in your eyes.

[milieu]

Just wanted to repeat everything everyone else said. ;)

1. GET A LAWYER!! There are many pitfalls in contracts, and you will miss something. One example I heard was where the publisher kept the promotion rights. What this meant was that the developer could no longer put the game on his webpage, advertise it, or even list it in his portfolio!

2. If they do want ownership of the IP, then they need to pay. Figure that the brand will go own to launch 5 sequels, a movie, and action figures, and price it accordingly. ;)

3. 10-20% sounds awfully low for a game that they didn't fund the development. Are they handling support and customer service? What are you getting for the 80-90% you're giving to them?

4. Get money up front. If they don't sell a copy, or worse, disappear into the void without paying royalties, at least you end up with something.

5. Make sure rights return to you if they breach the contract, don't sell enough copies, stop selling the game entirely, etc. Otherwise you can wind up losing rights to the game, which then sits unused because they no longer want to spend the time or money on it.

[Guardian_Games]

Will they pay you an advance in the thousands of dollars range? if not, just ignore them, they arent serious, and possibly even conmen. Distribution is big business, a thousand dollars is nothing to a distributor.


I second that advice. Even before worrying about IP rights. If they won't deliver an upfront amount of at least 10% of what they expect to sell, then something is very wrong. And if 10% isn't at least $1000, then ask yourself if you really want to do this.

[svero]

I second that advice. Even before worrying about IP rights. If they won't deliver an upfront amount of at least 10% of what they expect to sell, then something is very wrong. And if 10% isn't at least $1000, then ask yourself if you really want to do this.

I third this advice. Money up front is an excellent filter. Even a small amount can tell you whether your potential publisher is serious.

My approach is to always ask the publisher what they think they will achieve at a minimum. If they tell me they can sell at least 50,000 units and that I will get 20% then I calculate how much money that is and ask for 30-50% of it up front. If they balk I walk away.

[Jack Norton]

My approach is to always ask the publisher what they think they will achieve at a minimum. If they tell me they can sell at least 50,000 units and that I will get 20% then I calculate how much money that is and ask for 30-50% of it up front. If they balk I walk away.
Yes, same thing I do. They flee away in the 99.9% of the cases :D

[svero]

Yes, same thing I do. They flee away in the 99.9% of the cases :D

But sometimes they dont. Then you know you have a winner. They believe what they're saying and they're not bs'ing you. Doesn't mean it will be successful, but it at least points in the direction of honesty and gives you an idea that they arent just naming figures to attract you. That's why I ask the minimum expectation.

[Yuriy O]

This aint sound keen :D

[Rhubarb]

On our first release, we took a bit of a risk, and went with a UK based distribution company who were completely new to publishing. (I wonder if it's the same one??)

We agreed on a 'royalties of sales' deal (20% of sales revenue(not based on RRP) of the publisher (NOT net profit)), with a small amount of advance in the form of setting up a website on our behalf, and helping with a few costs (about £1500 worth of costs).

We were actually very suprised at how well they did! The game hit retail in the UK and small parts of Europe only, and to date they have sold over 5,000 copies based on a retail of £19.99 (which exceeded our expectations!), royalties paid, and is still creeping out... we haven't got rich off it, but it shows that not publishers can work out at indie level.. we justy simply would not have had the time or the contacts that they used.

The benefit of the distributor is that they deal with other distributors on an every-day basis, and so have a regular contact with them.

We have been pleased with the service.

Just a note to say that it can work out!

[rhm]

Rhubarb, could you name the company?

Roman

[Sillysoft]

And also point to your game if possible, Rhubarb? Thanks for the info.

[Mustra]

yes rhubarb, i would liek t onow to, the game and the company, it would be reallly helpfull !

[Jack Norton]

Without either the name of game or company your post is meaningless... :rolleyes:

[super_e]

Rhubarb: Another thing we would like to know is how long did your publisher take to sell 5000 copies of your game?

I hope you can share with us the info. Thanks.

[gpetersz]

Hey guys you cornered him well. :cool:

[Jack Norton]

Well anyone can come here and make such post, but without any names it could be fake :) simply as that...