Paying royalties to contributers

[Grey Alien]

Hi,

Does anyone have any suggested/normal levels of royalies that you would pay contributers to your game? For example, you make a match-3 and do all the developement/design yourself, however you may want to pay a musician and an artist royalties. What sort of % levels should they get paid of your net income (i.e. AFTER portals have taken their cut). I realise this question is "how long is a piece of string" but some of you may have some advice about working out a suitable level.

Certainly the programming work will be the largest in terms of man hours put in and also making a game is my venture/risk of course. I'm just not sure whether figures like 10-20% are too high or if they should be much less. Of course too small and the contributers may not be interested. Hmm, difficult one this for me ... business versus fairness :-)

I guess another thing to consider is is the contributer a professional who expects more or someone getting their first break as a muscian or artist in your game.

Thanks in advance for any info...

[Nexic]

Depends entirely on how much work the people involved have put in compared to you. It also matters how much you expect to realistically make.

You will have to negociate with you team. Though bare in mind not many musican's/artists will work on royalties unless your game is sure to be a hit.

My personal opinion is that unless the people involved are a permenant part of your company/team then go with flat fees. It makes accounting one hell of a lot easier for a start.

[Savant]

Flat fees, all the way. You really don't want to be worrying about paying out royalties a year from now.

[Grey Alien]

Thanks. I already released Xmas Bonus which had >50,000 downloads in two weeks on 2 portals. I plan to get my next similar game on more portals and add in various improvements to help conversion rate, thus hopefully resulting in a half-decent number of sales. As a result of this relative success I already have people lined up who will work for royalties. I don't have a big budget so it's attractive to me to not pay money up front now, although I can do if I really need to. I'm not too worried about the accounting side as I run my own business anyway, and have written accounting software before! Plus I have a good accountant.

Savant: hmm good point. I wonder if anyone has ever put a time limit on royalties such as 12 months only? Also I guess I need small print about what if I release a V2 or Gold/Deluxe etc. btw, as so many people love telling your right now, my next game is surefire fodder for your blog :-)

[smiles]

Another option would be to decide on what the flat-fee would be, and then offer to give them royalties on the flat fee + 10-20%. So, once they reached that amount in payments there would be no further royalties...

[Tom Gilleland]

Do not pay royalties! :eek: Pay a flat fee up front. Make it a fair amount for the work done. Maybe do a bonus if the product sells over x amount of units.

Don't underestimate your costs. I did this once in the early years and payed one person big bucks on a hit title. That person really didn't do much work on it, I was just inexperienced. And then latter that person wouldn't work on anything unless they were paid at sky-high rates. In fact, in the long run that person made more money on that product than I did. And remember you have to track all these royalties forever. And pay taxes on it. And it limits you later in selling the product different ways than how you originally set it up wiith those royalties. And, and, and ....

Tom

[Chris Evans]

I definitely agree with Tom.

Unless the person is a permanent team member, always pay a flat fee. It's a lot easier to manage financially and you'll also notice that contractors will feel a higher obligation to complete their work in a timely fashion since they know they'll be paid in the short-term.

[Grey Alien]

OK, seems like the general consensus is flat fees. I think on this some more; meanwhile any more viewpoints?

[Kestral]

meanwhile any more viewpoints?

How about a decreasing scale per units sold:

$100 at 100 units.
$100 at 300 units.
$100 at 600 units.
$100 at 1000 units.
$100 at each 1000 following units (with no limit).

These numbers are just for example, of course. If you don't want to have to bother with paying royalties over a long period, then delete the last line.

[BlueWaldo]

I would have to agree that it is better to pay flat fees when possible, but in development of TriGone I haven't paid a percentage of profit for some art work (as well as a small flat fee), and I was very pleased with the results. I have yet to release TriGone to see how payment and everything like that will work out.

[Ricardo Vladimiro]

I agree with the flat fee.

From the point-of-view of being paid, as a musician I worked with flat fees and was happy about it. On the IT world, doing senior engineering work or consultant work, flat fees (per job or per hour) made me work happy also. Can't see royalties being paid for consultant or engineering work though. :p

But now that I'm the guy paying, I feel that a smaller fee and royalties are asked by artists that get more involved in the project. My feeling from the artist I've contacted is that those that ask for smaller fees and royalties want to get your project to be a nice and polished one.

Just my gut feeling, no experience with "no-royalty" artists.

[Grey Alien]

yeah I was wondering if royalties meant they would keep on tweaking things to perfection to help ensure a great end result instead of going "thanks for the money".

[Ricardo Vladimiro]

That was what I was trying to reach. It does not mean that flat fee's are like cold mercenaries. I imagine that if they are true and good professionals, their involvment will be exactly the same. But like I said, it's a gut feeling, yet to be proved.

Look around this thread, more people are saying flat-fees than royalties, and you can see they have very good jobs in their portfolio.

[paulhuxt]

Flat fee is simple, but it may be too expensive, assuming that you buy the whole "copyright".

An alternate solution is to buy only the rights for unlimited use in your game (at a lower price).

Then, the musician and you agree that he may recover if further uses of the music have to be purchased (for a sequel, a port, a music compil...).
Thus the musician may keep involved, and if your game succeds and develops further, he gets some "additional flat fee".

This can be more convenient than "per sale royalties".

[Ricardo Vladimiro]

Is it plausible that the same applies to graphics?

[Sysiphus]

Heh, I wouldn't go for copyright claiming unless I would have been really clearly fooled and very bad treated. Even with the enough anger, the lawyers costs are too much for the usual artist. That besides I don't have the patience to go through a case in several years paying lawyers..

There are some artists that we play fair no matter the amount or payment. Even if one thought that a gig was paid small (and I have reached these agreements several times) there's one more important thing than the casual cash: credit, proffessionalism and the quality of work done. Just I wont put crap in any project with my name bellow, and if I have to make so fast stuff (it should be really fast to look badly) I will not want be mentioned in credits(haven't hapened yet, perhaps in certain oil picture..). But then, and as I usually have a job apart, I am not so starving as to use the very small free time I have to do stuff that wont bring me credits. getting well known equals to cash in a near future. Besides, there's the pride of the artist of not leaving a bad pixel or polygon left there.

Besides this, which all points to the fact that flat fees are convenient for the developers, the funny fact is that I have realized with the years that flat fees is also convenient for gfx artists. At least to me is. With very , very few exceptions ( I have yet a project open, with a very honest, kind, great person. And I am very happy I did work for him(which was a pleasure), I trust him fully. ) the per royalties stuff is really dangerous and hard for the artist. I have worked -salary job, with 9 to 5 and all (add many extra unpaid hours there)- at a company where we all got strongly fooled by a huge distro, they never informed about the royalties,(any lie will work here, specially when the royalties where said "once promotion wastes where covered") and we got to know way later how much thousands (you'd be scared) of $ we were fooled.

I have done other work for "shared profits" with other persons, and while they did me some favors, real payment never came. Even when done a full good work. So, my today's position is that I keep my collaboration with that american friend in our per profits stuff, and maybe some other very long term project with a pair of local friends of allways(right now am a bit busy).

The flat fee short project tends to be the more interesting stuff for artists, at least like me. (Just try them to be not too much bargain for you..)

True that there must be some sharks eager to play that stuff of attacking later on with copyright matters...heck, in general, you can have any sort of problem with anyone, actually, if the other part is really in the mood(but neither is so easy for them to win, specially across countries)...I would just worry to pick good persons to work with, is imho one of the most important matters, though in a tight schedule, or when you don't find any guy(at an ok price), I guess you have to pick whatever..

[gpetersz]

"Certainly the programming work will be the largest in terms of man hours put in and also making a game is my venture/risk of course"

Without wanting to be rude: Exactly, does any of the programmers here know how much work art requires?
I think you negotiate on a thing you don't know too much of.
You can easily over or underpay your artist. Neither of them is good. :p
Besides, when you pay royalties, it is the artist's risk as well, not only yours.

In the good ol' commodore days we shared even (1/3 to the musician, 1/3 to the artist, 1/3 to the coder) or changed it a bit. Surely things had changed since. But it all depends on the amount of work what CERTAINLY will be overestimated by the artist and underestimated by you. ;)

[Sirrus]

"Certainly the programming work will be the largest in terms of man hours put in and also making a game is my venture/risk of course"

Without wanting to be rude: Exactly, does any of the programmers here know how much work art requires?
I think you negotiate on a thing you don't know too much of.
You can easily over or underpay your artist. Neither of them is good. :p
Besides, when you pay royalties, it is the artist's risk as well, not only yours.

In the good ol' commodore days we shared even (1/3 to the musician, 1/3 to the artist, 1/3 to the coder) or changed it a bit. Surely things had changed since. But it all depends on the amount of work what CERTAINLY will be overestimated by the artist and underestimated by you. ;)

I agree with that - art can easily take as much time as programming ;)
Music seems fine on a per song basis, but sometimes you want the artist to have a vested interest - therefore royalty may be best.

[DrWilloughby]

I'll put in a word of dissent here.

Anyone that I have never worked with before is offered a flat fee for the first few tasks. If things go well, I give them the choice of royalties or flat fee. I pay the royalties quarterly, and it's easy to do, and quite satisfying. It's not a pain in the neck.

When I started, I wanted to make a game (Venture Africa) that I knew was going to require a significant amount of resources, but I really didn't want to bet the farm on it financially. Royalties took a huge amount of pressure off.

Now that my company is becoming more secure financially, I am moving towards flat fees (and salary for 1 full timer), but I always expect to keep permanent team members in the royalty stream. It saves money, mitigates risk, and allows people to get excited about monetary reward for a hit game.

[Grey Alien]

Interesting replies thanks. Re: the programming taking more time than the art, well that was true for the particular game in question although I appreciate that is certainly not the case for lots of games.

[zoombapup]

I dont know about you guys, but the reality for me, is that I doubt I can afford the money up front for all of my art requirements. Actually, thats not strictly true or Air Ace, but moving forward it is definitely going to be so (I've just bought a house).

If you consider that Feeding Frenzy cost 15k for the art, thats a significant sum for a relatively simple game.

Now imagine that your average indie game makes 10k a year in sales (ok, we can argue about this figure, but in the absence of any strict figures, I'll go with this one).

10k a year - 15k during development = a bad risk with no return at all for the first year.

I dont mind accepting a risk, but clearly this is pretty much insane, given that you'll essentially be putting the product out for free for a year and a half before you break even. This isnt including marketing and support costs either.

Now assume that sales tail off after a while, so that 10k starts looking more like 5k after a year. Then at what point do we reach a break-even or start generating a profit?

It seems to me, either you:


Get lucky and find a cheap artist
Make a cheaper game
Pay someone royalties and a fee
Already have an artist on the team who is willing to accept the same risk

You are scuppered.

How do you guys get around this? or are my figures compeltely wrong?

[Sysiphus]

15k!
wow
that's a lot of money...

[mustardseed]

Definitely go for a flat fee. And for all copyrights too if possible. It will be more money up front but it'll be worth it (and easier to manage) in the end when you own everything.

Actually I wouldn't even bother with someone who wouldn't include the copyrights in the fee. There are plenty of freelance workers willing to do this, you just have to know where to look.

Although I am speaking from a different perspective: I'm an artist who hires freelance programmers. :)

[papillon]

>How do you guys get around this? or are my figures compeltely wrong?

As a completely broke person who considers herself *slightly* better than typical 'programmer art'? Design the game to minimise art requirements and do as much as possible myself! :)

Current project IS going to have a ridiculous (compared to anything I've done before, but not 15K) art budget but the reason it's not shown to anyone right now is that I'm completing everything with very rough sketches so that I can tweak down the amount of art needed as far as possible before hiring anyone else to work on it. This will, sadly, mean the production time will take a lot longer.

But I don't think many of us spend 15K on graphics. Most of us probably aren't paying multiple full-time salaries either.