Receiving funding from publisher

[Total Eclipse]

Hello.

Today our first casual game was released and we have already begun working on our next one.

We're thinking of asking a publisher for funding, which will help us develop our game with less constraints and achieve our goal faster.

Has anyone here have any experience from such a business model? What can we gain and what can lose from this?

Us preserving the IP of the game is essential, so what will a portal/publisher ask in return for such funding?

I noticed that the games that Popcap publishes become "Popcap games". The actual developer is "lost" in the crowd.

Chuzzle, for instance, is advertised everywhere as "From the creators of Zuma and Bejeweled", so Raptisoft isn't really receiving any credit as the developer, in the eyes of the casual gamers (unless of course they get the game from Raptisoft themselves).

What can we expect from a company that decides to fund our game?

Can you recommend any publishers in the casual games scene that is fun to work with and don't necessarily enforce their ideas on the developer (just because they pay for the development)?

Any help would be appreciated.

Thank you in advance.

Argiris

[gamemaker]

First of all, congrats on the release of your first game :)

We're thinking of asking a publisher for funding, which will help us develop our game with less constraints and achieve our goal faster Unfortunately, with even only one game out, I think this is highly unlikely to happen imo. Generally, publishers will not throw money away on the development of a product unless it's going to be developed from a well-proven company who has much experience of making good games and know what they're doing.

Us preserving the IP of the game is essential, so what will a portal/publisher ask in return for such funding? In these circumstances and depending on the relationship with the publisher, they MAY ADVANCE some money to you (if they think they can recoup the money no problem) which would be recouped first and foremost from revenues before the developer sees a penny, which could take a while depending on sales velocity, but, if they're giving development money up-front then they are effectively buying the IP from you.

Generally, if you want to keep the IP, then you should make the game to completion with your own resources prior to seeking publishers/distributers to sell it for you.

[svero]

>Us preserving the IP of the game is essential, so what will a portal/publisher
>ask in return for such funding?

Usually an exclusive for a certain period of time and the ability to be a part of the game's design and development before release. To have a say in how the final game looks.

>I noticed that the games that Popcap publishes become "Popcap games".
>The actual developer is "lost" in the crowd.

Yes you lose some of your identity. But actually this will vary from publisher to publisher. Each publisher will have their own set of guidelines for how the game is presented including the game's credits. Probably the most important thing to consider is that if a publisher if funding your game that means you're generally not doing direct sales and therefor the customers for that game are the publishers customers and not yours, at least until the ip reverts to you and the exclusive ends, assuming thats the kind of deal you have.

>What can we expect from a company that decides to fund our game?

It's too open ended a question really. What you should be asking is.. what can I expect from company X. Gamehouse, Iwin, Oberon, etc.. whoever it is you're working with will have their own style and help or direct you in their own way.

>Can you recommend any publishers in the casual games scene that is fun to
>work with and don't necessarily enforce their ideas on the developer (just
>because they pay for the development)?

Well on our last project we worked with iwin. They're great guys and while we didnt always agree with everything they wanted generally there was only a little give and take and it was all aimed at making a better game. I think in these sorts of relationships you've got to be prepared to compromise. I think any serious publisher will listen to your ideas. But in a situation where youre taking money mostly they have the upper hand. So it depends on you really. Im happy to hear what others have to say and try to incorporate what they want. But design by committee can be frustrating if you're used to being the last word. Id say if you take the money be prepared to compromise. It depends partly on your outlook. It can be you vs them or you and them vs the market or other games.

[Emmanuel]

BigFish Games bought a 1 month exclusive for Atlantis, and, a few days later, the publishing rights to third parties (GameHouse, etc) while we retain the right to sell it on our site and all the revenue that generates, which means we retain full IP. (We've sublicensed that IP since then, under yet another deal and payout, but I'm not allowed to disclose what that is for).

All in all, I found that to be a fantastic deal for everyone, first because we brought a completed game that proved to convert well, so BigFish's offer was generous (compared to what we'd have got if they took the risk to fund development), they didn't ask for changes since the game was selling, and they've been great about everything -- including being the first publisher that I deal with, that didn't require sending people to break their fingers in order for them to pay.

Personally I'd recommend that approach (essentially they funded our new title by buying publishing rights for our previous title, Atlantis). svero got his game funded partly because he already had a track record of delivering successful and smart titles like Aargon, I'm sure.

Best regards,
Emmanuel

[Hiro_Antagonist]

Us preserving the IP of the game is essential, so what will a portal/publisher ask in return for such funding?
...
What can we expect from a company that decides to fund our game?
...
Can you recommend any publishers in the casual games scene that is fun to work with and don't necessarily enforce their ideas on the developer (just because they pay for the development)?

In an effort to get straight to the point, it seems like maybe you're expecting a little too much something-for-nothing here. =)

In order to understand how this stuff really works, you need to put yourself in *their* shoes. You have to understand how publishers work, how they make their money, and what their incentives are.

If they give you money to develop your game, why on earth would they let you keep the IP, take complete creative control, and generally have free reign?

If they pay for the project up-front, they are shouldering all the risk. At that point, the game is *theirs*, because they paid for it with all of the significant costs -- money, risk, etc. All you really become at that point is a paid development team. Could I go to Microsoft, get them to pay me to develop something (as an employee, contractor, vendor, external partner, or anything else), and then claim IP ownership afterwards? Of course not.

Forgetting up-front payment for a minute, publishers play a very critical, and usually unobvious role in the success of a product. It's easy to say "the developer completely made the game -- they should get most of the money and ownership." But that's a very uninformed view. Publishers (especially bigger ones) usually put up vast sums of cash for marketing, distribution, etc. They provide an invaluable service, and enable the game to be *sold*. There may not be a game at all without the developer, but even worse, the game would sell hardly any copies (compartively) without a pulisher.

If you want ownership over your game, you'll have to pay for it. Fund it yourself, or get loans yoruself, or do whatever you need to do if it's that important to you to own IP and have a bigger budget. Even then some publishers will want certain rights over your IP/franchise. I personally think the IP/franchise ownership should generally stay with whoever funded the game, and if a publisher tried to negotiate that from me I would kick and scream loudly. But again, when looking at it from their perspective, most publishers see little point in putting massive money/risk/marketing effort into making a franchise famous, only for the developer to leave after 1 product (or whatever), while the developer and another publisher profit from it. The publisher would have paid to make the franchise famous, but wouldn't see future revenue from it.

Don't mistake this for meaning that publishers are 'bad'. They certainly aren't. They're a business, just like you, who exist to make money and see their products succeed. They want synergistic business relationships with developers where everyone comes out ahead, and everyone can do bigger/better projects next time.

Sorry to make such a long post, but I really think the expectation of getting money up-front (nearly impossible for small indie developers) AND getting to keep IP rights, primary branding, etc., is highly unrealistic, and in fact, highly unfair to the publisher.

-Hiro_Antagonist

[Matthew]

I'm about to head out the door for a weekend trip, but this may help your understanding of different publisher arrangements:

http://seven.pairlist.net/pipermail/casual_games/2005-August/000154.html

[Hiro_Antagonist]

I'm about to head out the door for a weekend trip, but this may help your understanding of different publisher arrangements:

http://seven.pairlist.net/pipermail/casual_games/2005-August/000154.html
That is an amazing link! It reaffirms a lot of what I said, but more clearly and gives hard percentages/options. I stand humbled. =)

-Hiro_Antagonist

[Total Eclipse]

Thank you all for your replies so far.

Matthew I've already read this submission to the Casual Games mailing list, as I am a member of it as well.

I just wanted to hear more "personal" experiences from working with funding publishers.

Hiro, as I mentioned we have already started working on the game and we may be 35-40% into it already, so the publisher wouldn't fund the whole thing.

I'd still like to hear more on the subject, if people have to share.

Thanks.

[Sirrus]

But again, when looking at it from their perspective, most publishers see little point in putting massive money/risk/marketing effort into making a franchise famous, only for the developer to leave after 1 product (or whatever), while the developer and another publisher profit from it.
-Hiro_Antagonist

Basically what happened with Ubi Soft and Far Cry...

[SteveZ]

Here's another potential:

Ask venture capitalist(s) to fund your project. In return, they get x% return on their investment within Y-Z months. It works better if you have a solid business plan and/or a proven track record on a previous game that has reached such return.

[Phil Steinmeyer]

Here's another potential:

Ask venture capitalist(s) to fund your project. In return, they get x% return on their investment within Y-Z months. It works better if you have a solid business plan and/or a proven track record on a previous game that has reached such return.
VCs that I'm aware of don't do this kind of thing - they want a big chunk of your company equity, and a firm belief that your company has an exit strategy (either IPO or selling to a larger company), within 5 years or so, at a very large premium to the price they're investing at.

OTOH, it might be possible to find individual angel investors to fund individual projects. Your best bet there would be people you already know with significant financial resources, and/or wealthy individuals with a significant personal interest in gaming and/or tech generally.

That said, I think it would be quite difficult to find such angels. If you don't already have a rich uncle Joe in mind as a possible candidate, then it's probably a long shot, and one you'd expend a lot of fruitless time and energy on.

Short answer is that whoever funds a project generally walks off with the majority of the financial reward (if there is any) and long term rights. Exceptions are few and far between, and generally depend on having an exceptional track record.

[Hiro_Antagonist]

OTOH, it might be possible to find individual angel investors to fund individual projects. Your best bet there would be people you already know with significant financial resources, and/or wealthy individuals with a significant personal interest in gaming and/or tech generally.

FWIW, I was able to secure my funding as a personal loan with a fixed interest rate, which I must repay whether the game does well or not. So for anyone skeptical, it can (and does) actually happen.

It is along the lines of what Phil said -- it was a wealthy ex-boss of mine who knew me enough to know that I would take the project seriously, had the ability to execute, and that I'd get a normal job to pay off debts if it didn't work out. I recognize I have an exceedingly rare (and lucky!) situation, but then again, one tends to shape their own luck..

<OT>Having these, and other crucial connections, is why it helps to live in a city with good networking opportunities. That's a lot of what I mean by shaping your own luck. My company never would have gotten started if I didn't live in a gaming/dev hub city, no question...</OT>

-Hiro_Antagonist