from Developer to Publishing

[dpapa]

Hi guys,

this is my first post. :).. Anyways, I would really appreciate you help on the following.

Let's say i work for a developing gaming company. Let's say I have the following :

Budget
1) The game will be AAA acceptable standards
2) We have created our own graphix engine.
3) It's an adventure/action game.
4) We have had major publishing companies asking about it as well as interested in publishing it.
5) We kinda have the in house development units (not feeling confident on it though)
6) It was shown on the E3 booths this year. (and last year)
7) It's our very first game.
8) It's almost done! (after 2 years)

So my question is.

If we have the money do you suggest in bringing out the game by ourselves? or should we go with a major publishing company?

If we do, what are we going to expect at this stage?

If not how hard is it to get rights to open up territories and regions? what is the steps in getting this?

Regarding distribution, silly question, but we can go with multiple distribution companies right?

What does the NDA form actually do? (protect us right?) How much information about the game can I release to them?

What do you suggest, Box cover? or DVD cover? i'm talking about PC game.

BTW it will eventually show up on Xbox 360 as well. (how do we get the dev kit from Microsoft? )

And what kind of royalty fees to we pay when we
1) distribute
2) publish
3) Microsoft royalties?
4) who takes care of what in this type of business?


Guys I seriously would like you to honestly help me out with this, and I would greatly appreciate it.

p.s In regards what game i'm talking about, you will soon find out, at the moment I would prefer not to talk about it further.

Best Regards,

[Yarlen]

As someone who is now well involved in retail publishing (both games and application software), I'd have to suggest you go with a publishing company instead of trying to do it yourself. There is a huge amount of work involved in bringing a game into retail, far more than most people think. You have marketing, advertising, PR, box design, ESRB submissions, licensing red tape for console games, beta testing, support, plus all the costs associated with the above - and that's before you spend the money to actually produce the finished copies and get it onto shelves. All of that stuff a good publisher will deal with for you.

For any publisher or distributor you may deal with, you'll want to have an NDA in place. It's basically some insurance that they're not going to leak confidential information.

[Thorbrian]

I think from a high level the issue is this - it's highly likely that there are a lot of assets (tangible and intangible) in your game that will have more value to you than they will to any publisher, so no matter what type of relationships you pursue, make sure that you are very careful about what rights and assets you give up - basically you shouldn't give up a right or asset unless you are sure that the other party has at least an equal opportunity and motivation to capitalize that asset for your benefit than you do. Otherwise you risk the chance of letting your best and easiest opportunities for future success sit on a cutting room floor because it's like 10th or eleventh on the publishers list, or it's just too hard or too much trouble for them to-do

good negotiation is giving each party the things that are important to them, but not nearly as important to the other one. Win-win

Some examples of stuff that may be highly valuable to you:
1. Sequels/IP - I think this one is essential to a developer's future success... you may have great opportunities to reuse your work & brands for new products, spin-offs etc. but if you sign away your ip, then it is in the hands of someone who doesn't have your expertise and resources and all that to build upon. And having the expertise and resources you have makes a big difference in the decision as to whether to pursue such opportunities and makes a big difference in the quality of the product. Personally I think owning IP is critical - look at ID, Valve, the early blizzard, popcap and reflexive - all are companies that made games that they retained the IP to that ultimately helped make them as much bigger companies.

2. Selling your game from your own site - this is the kind of thing that can be an incredible opportunity for you, you can collect your rabid customer base, serve them other products and things they might like, and ultimately build your own marketplace if it's what you want. Getting a higher percentage of the sale isn't the big deal here so much as it's a way to build your company and presence.

3. Alternative distribution deals - Maybe you are going for online and you end up getting a retail deal, or maybe it's a cell phone deal or like you said xbox live arcade, and the natural inclination for a publisher is to lock all that up in the hopes it may be worth something later. But in those cases, there will be channels that a publisher won't have direct access to. The problem is that the distribution channel may not be worth the publisher pursuing when they are a middle man with a lot of other product to push, but it may be very worth it to you & the distributor if you were to work it out just between the 2 of you. Again, my point here isn't that you can get a higher cut, it's that you want to make sure to keep your options open so that you can capitalize on things a publisher wouldn't.


Some general advice:
1. It's highly likely that any publisher or distributor is going to send you contracts that take the maximum of your rights away and give up the minimum of rights they may want in some future case. The reason is simple, it's easiest to have a standard contract that covers all eventualities for them. So make sure you read your contracts and fight for what you want. Often you will simply say "this clause won't work for us" and they'll just rip it out, not a big deal, cause it's just their standard cover our *$$ crap

2. If a publisher insists on having a certain exclusivity or right to distribute in a certain manner, try and give them a "right of first refusal" type of agreement, where you agree to give them the first chance to do any kind of distribution deal, but if they turn it down, then you retain the right to broker those agreements yourself. Basically find creative ways to give them what they want without locking up your ability to capitalize on the opportunites your work provides.

3. Get all the (perferabbly non-exclusive) distribution you can & have your own presence for customers to come to. It's a great way to collect a fan base, and it can really be a huge thing when it comes to your next game's success

Also, I'm not trying to be down on any particular type of deal, but I'm very negative about deals that take too much away from the developer too early (you can always agree to more later if things are going well)

---

...and make sure you keep your ip!

[Thorbrian]

If we have the money do you suggest in bringing out the game by ourselves? or should we go with a major publishing company?
self-publishing is ultimately worth it, but to do it well it really does become a full time job (at least)... if that turns you off ("I just want to make games") then by all means get agreements with people to do all the lifting for you (retail is a place where you'll need help for sure, retailers want to deal with a small number of suppliers)... but again, don't give up more than is needed to accomplish what it is you want help for, and be picky about your partners more if you are counting on them for more

If we do, what are we going to expect at this stage?
It really depends on a lot on what channels you are trying to publish into. For a downloadable casual PC game it's fairly easy to get distribution in the major players. For xbox live arcade, MS is very good to developers, but they have to want the game (it's not just an issue of quality, they want it to have a place in their lineup). For retail/disc games, I don't really know anything except that at my company we get distro partners because we don't want to/know how to do it ourselves, and that for us online sales have always been much larger than retail - so for PC titles, I'd say self publish online in addition to any retail deals you get.

Also, the behemoth guys (alien hominid) probably know as much about self-publishing on consoles as anybody else in this world, so you may want to try to get in contact with one of them if you are looking for retail console distro but want to self-publish


Regarding distribution, silly question, but we can go with multiple distribution companies right?
It's not a silly question at all - Absolutely you can go with multiple companies (as long as you don't sign anything saying you can't). My personal suggestion is to first make sure you have a strong presence for your company, than be the biggest distribution whore you can possibly be. In my experience, different distributors basically all have static and distinct audiences (maybe around 80% of the customers do not shop around at all once they find a place they like) so there's a lot of people you simply won't reach if you don't distribute widely. In addition, some small percentage of your customers in those other distribution channels will drift over to you - while they are a small percentage of the channel's customers, for a new developer that small leak is huge - likely many times more than the size of audience you'll attract other ways.

[Applewood]

Take the best offer from a publisher that keeps you owning the IP and the rights to do derivatives and sequels, placed elsewhere.

Unless they offer you enough money that you no longer care :)

[mokkbs]

If you already have the program built, and it has already sparked interest from others....

If you believe in your product....and think people would enjoy playing it to where they would pay what you think it is worth...


I would vote for doing it yourself. At least for one year. See how popular it is with your own attempts at retailing it online.

Promote it, market it (it sounds like you guys are already doing that), get it reviewed, and SELL it to people that want to play it. Get some return on the sweat equity you guys put into it.

If you feel your sales are just not enough after that year or so, you could approach a publisher then. Try to establish yourself. Get noticed for being popular.

If you feel you must go with a pub, like the others say, don't give up Intellectual Property.

(my first post here as well).


Edit: I would also say that if you put it online for a year yourself, the answer to almost everyone of your questions will come clear to you, to meet your circumstances.

[Bad Sector]

I agree with mokkbs, try it by yourselves first.

[dpapa]

Guys,

I thank you for your prompt responses. Once again I'd like to say that it's not a casual game, but a true AAA + Adventure game. so xbox live Arcade is out of the question.

another question is how do we get the dev kit from M$?
Regarding the IP, how is it stated in the contract regarding the rights to it and ect?
Say we are looking at publishers like Atari, Ubisoft, codemasters, i believe this is good for us. But how good are they?.. In regards to cutting deals with!?.. anyone know?

I appreciate all the time you have had to post you opinion on this matter.

[Sharpfish]

...Codemasters, i believe this is good for us. But how good are they?.. In regards to cutting deals with!?.. anyone know?


I used to work @ Codemasters, but couldn't possibly comment on how good they were at deals, I can tell you however their QA has gone right downhill since I left! ;)

[papillon]

Actual adventure games, ye old puzzle solving point-and-click, are happier to take on independents into full retail deals than other genres, as far as I can tell. Whether they will actually give you a GOOD deal or not I can't answer, but if you visit some of the adventure-game-specific forums you can get put in touch with some companies that may take you on when your game is complete. But selling it online for a while yourself FIRST is still a good idea - give you time to get public feedback and tweak things and so on.

http://www.darklingroom.co.uk/darkfall/ - you could talk to this guy about his experiences... :)

[Bad Sector]

This is an action/adventure (think Tomb Raider), not a classic adventure (think Monkey Island).

[Popcorn Boy]

For any publisher or distributor you may deal with, you'll want to have an NDA in place. It's basically some insurance that they're not going to leak confidential information.

You mean people actually pay attention those NDAs? ;)

[Yarlen]

In theory, Popcorn Boy. ;)

another question is how do we get the dev kit from M$?
Regarding the IP, how is it stated in the contract regarding the rights to it and ect?
Say we are looking at publishers like Atari, Ubisoft, codemasters, i believe this is good for us. But how good are they?.. In regards to cutting deals with!?.. anyone know?

Not sure one the the dev kit honestly. They're expensive, I can tell you that. It's something a publisher would be able to help with.

I agree with the previous comments that you should never give up your IP. Some publishers will try to obtain it in their contracts, but I would strongly suggest never giving that up without major financial compensation. Note that how much a publisher will demand (i.e., influence in the overall project) will depend greatly on how much money you're asking for. If you're asking for investment to complete the game, you're going to have to give them a lot of control in return.

We've worked with Atari, Ubisoft and a number of others. I can't really comment on how they were to work with, however.

To get started in finding a publisher, you should put together a document detailing your game, the tools you're using, what resources you've put into it, what more needs to be done with it, sales projections, etc. You should also have some kind of demo available for the publisher to evaluate and be prepared to fly out to talk face-to-face with the ones you like.

[Coyote]

The best of all possible deals would be to work out some kind of Valve or Stardock arrangement, where you get the IP and "online" distribution rights, and the publisher gains rights to the traditional brick & mortar channel.

It might be tough to pull off as a newish developer, but if the game is nearly done it should be possible.

There are many other points of negotiation you'll need to worry about, like International release rights, possible console versions, etc. And I'd recommend talking to some of the folks around here who have been screwed over by publishers to make sure you aren't working with one that has a bad prior history.

But if you are looking at traditional retail channels (and that is STILL where the big money is, though it's anything but guaranteed), a publisher is still the way to go.

[Phil Steinmeyer]

So you've got an adventure game that's not casual - you're going for retail ('shrink-wrap') distribution, right?

PC, not console, right?

First, if it's a traditional 'adventure', like those put out by the Adventure Company, there are a limited number of publishers who successfully publish those games today. Don't talk to a publisher with no experience in this genre.

Second, publishing retail is VERY hard. It takes a lot of expertise and relationships with the retailers to get your product into the channel.

There's a middle ground between self-publishing and having someone else publish - using a distributor. IIUC, with these relationships, you are responsible for completing the game 100%, and usually for package design and manufacturing and possibly advertising. They are responsible for selling it to retailers and coordinating physical delivery of the product to the stores. You keep ~70-75% of the money, versus 15-35% in a traditional 'publishing' relationship.

Still, for a first product, I would lean towards using a publisher. There's so much involved, and you're unlikely to execute on all of it well yourself with no previous experience.

Since you seem unsure on some contract issues, and unsure on the merits of potential business partners, I would recommend using an experienced game lawyer - somebody who's done these kinds of deals before. They can help you not only with the legal, but they'll likely offer some useful advice on the biz-stuff too. Expect to pay $200-350/hour for a good silicon valley game attourney, and your overall bill might be $10K-$30K, but it's probably worthwhile. Don't hire an attorney who hasn't done at least two of these deals with different developers and different publishers.

[Tom Ohle]

For a first-time project, you're not likely to get a deal that has you retaining IP rights. Especially in today's business climate, everything's about IP, and a publisher will want to make sure they have control over that. You'll need some clout before getting a deal like that... unless you sign with a lower-tier publisher. But then you're likely giving up a certain level of marketing and distribution.

[mokkbs]

There's a middle ground between self-publishing and having someone else publish - using a distributor. IIUC, with these relationships, you are responsible for completing the game 100%, and usually for package design and manufacturing and possibly advertising. They are responsible for selling it to retailers and coordinating physical delivery of the product to the stores. You keep ~70-75% of the money, versus 15-35% in a traditional 'publishing' relationship.


Phil, what names can you name that fit into this category.


dpapa,

Also I would add to my comments - that my perspective was from a digital distribution one - not physical retail.

[Phil Steinmeyer]

Phil, what names can you name that fit into this category.


dpapa,

Also I would add to my comments - that my perspective was from a digital distribution one - not physical retail.

I'm confused. What distribution channels did you have in mind?

If you're looking for only/primarily digital distribution, but your title is NOT casual, then there aren't many 'publishers' in that field, and self-publishing is probably a good way to go.

If you're looking for retail CD-ROM, that's a different story. Is your title likely to fall into the 'budget' category ($19.99 or less), or is it a bona-fide A title that can sell for $39.99?

[sillytuna]

Tom, it depends how much you can self-fund. You can retain IP by creating the content yourself near completion, then doing per territory deals with advances based upon projected sales.

This method has pros and cons, although they aren't all obvious.

[mokkbs]

I'm confused. What distribution channels did you have in mind?

You had mentioned the 'middle ground' publishers, where dev group does 100% dev/production, publisher does boxes on the shelf (distributor), and I was interested in who you were refering to that engage in such deals.

If you're looking for retail CD-ROM, that's a different story. Is your title likely to fall into the 'budget' category ($19.99 or less), or is it a bona-fide A title that can sell for $39.99?

Likely $ 39.99

--Mark

[Yarlen]

There are lots of retail publishing options, but you probably wouldn't be able to retain your ESD rights to it. Stardock probably wouldn't take on an adventure game for publishing. We're only planning to publish 1-2 3rd party games a year at retail and adventure games are just too niche for us. The Adventure Company or Meridian4 may be a good fit, though I don't know that either does console releases.

[Phil Steinmeyer]

You had mentioned the 'middle ground' publishers, where dev group does 100% dev/production, publisher does boxes on the shelf (distributor), and I was interested in who you were refering to that engage in such deals.



Likely $ 39.99

--Mark

Well, it's been a long time since I was around that side of the business, and the names and roles change fairly quickly, so anybody I remembered from 'back in the day' is likely not doing this anymore (i.e. even E.A. did this kind of deal in the mid 90s, but I very much doubt they do today).

However, there's probably a new generation of companies who DO fulfill this role. Generally, it was smaller to mid-sized publishers, so that's who I'd suggest you start with. Basically, publishers who already had this infrastructure in place, and could more or less 'rent' out that structure to smaller entities.

Also, a $39.99 price point is a challenging one. At that price, few users will just pick up your game off the shelf and buy it. They generally have to have heard about the game on-line, seen a good review, tried the demo, etc. That implies a significant effort in p.r. and perhaps advertising on your part.

[dpapa]

Thank you for you replies. Really unbelievable how much you guys are willing to help! :),

1) When Publishers ask for a playable code, does this mean, A playable Demo? or is there a number of levels in this playable code!?.. My thoughts is that its a demo of just a level. Please correct me if i'm wrong.

2) How much does it cost to get the M$ Dev Kit?

3)IP. What are the steps into getting our IP?.

Thank you again for your help.

[Bad Sector]

IP means Intellectual Property, or in other words: whatever makes your game, your game (Name, Characters, etc). If you have the IP of your game, you can make sequels to it with other publishers, sell the game's music, sell t-shirts, etc. If you give that to the publisher, the publisher can do that stuff and you can't. Also the publisher can make a sequel to the game with other developers without asking you (it's their IP anyway, why should ask you?).

So this is why you shouldn't give up the IP. And from what i know, you mustn't ;-).

[MrQ]

The more you can show of a game the better. A verticle slice of your game in the form of a playable level or demo is a good start or maybe just showing the best features in a select level. I have known games that have been pitched in the early playable stages but not picked up untill the game was in the alpha stage or later. good luck with it!

[sillytuna]

Big bit of advice - If you are giving someone a finished game, get a decent chunk of money of them based upon expected pre-orders. Also find our what their marketing plans are and ensure sufficient marketing effort/funding will be put towards it.

The more a publisher invests in a game, the more effort they'll put into selling it. giving them a game and going 50:50 gives them little incentive to push it as hard as other titles.

[Yarlen]

Thank you for you replies. Really unbelievable how much you guys are willing to help! :),

1) When Publishers ask for a playable code, does this mean, A playable Demo? or is there a number of levels in this playable code!?.. My thoughts is that its a demo of just a level. Please correct me if i'm wrong.

2) How much does it cost to get the M$ Dev Kit?


1) Basically a demo version. Something they can sit down and play around with to evaluate the game's potential and quality. It should be more than a level (unless it's a big level) since we're talking about retail.

2) Not 100% sure on this. I've heard ranges from $2,000 to $20,000 through the years for dev kits. When you do meet with a publisher, ask. ;)

[MrQ]

I'm pretty sure 360 devkits are pretty pricey. Jeff Tunnell wrote a nice article in his blog recently about 360 live development costs. Might be a good read for you.

http://makeitbigingames.com/blog/?p=35

[dpapa]

MRQ, i read this article that you posted however, it does not categorize us as a company. We're not doing games for Xbox live arcade. Basically we are not heading towards the Arcade type. As i mentioned previously in my posts, we are heading against the big dogs in Adventure gaming for pc and then next gen consoles in the near future.

So at the moment we have applied for it, and waiting from Microsoft to send us a reply regarding this. I guess I will have to wait and see what the costs are ect based on this. (dev kit)

Now regarding the market i have a few questions.

Let's say i'm putting down a retail price for example 39.99 for our Pc Game. After all the payments that need to be made, Marketing costs in store, packaging, discount to retailers, what will my net profit be? I workd it out and got something from 9-14 dollars a game. Is this actual? is this an under erstimation? Over estimation? I'm I on the right track? I did enough research to come out with this.

And let's say i'm doing an Xbox 360 game. Who do I pay what?

I know I pay microsoft some royalty fees; but how much? I figured i'm paying microsoft like 10 dollars a game? Is this again under estimated? or over estimated? Do i handle the fees to the retailers? or does microsoft does? What is my place in this Microsoft situation?

Thank you again, i'm looking forward to your replies once again! which are just great :)

[luggage]

You might find it useful not to use M$ in public posts. You are asking them for development status and there's a chance one of them might read this board.

That and it makes you sound like a 14 year old 733t hacker.

[dpapa]

huh? What is MS? lol. Thanks for the tip, edited the previous . maybe we should just edit your as well?.

[sillytuna]

This is not the best place for answers to those questions (publicly). I strongly advise you to talk privately to one or more existing "retail/console" developers. I've PMed you, and there's others on this board who know as much and more than I do.

You guys may have a great product, but there's a lack of basic knowledge on how the industry works - which is why you're asking for help I guess :)

However, it's important that you don't give the impression of being a "newbie" to both Microsoft and publishers. If you do, you won't get licensed and you'll also find it harder to get a deal, or at least a good one.

*IF* you have a strong product, there's an argument for you to have commercial representation.

[zoombapup]

I'd strongly recommend if you game is REALLY GOOD.. and I mean REALLY good. Get some representation.

I'd personally suggest either:

Thomas Buscaglia (gameattourney.com) or Dave Taylor (ex id guy and general biz dev dealie person).

I know both of these guys do business development for AAA level games (Thomas did the legal dealie stuff for Red Orchestra and Dave did the same for a game I only now cant remember the name of :))

Basically, find someone who knows the answer to all of those questions you asked and pay them :)

From what you are asking, you have a loooong way to go, so I'd strongly advise that you get some good advice. As in pay for it.

[mokkbs]

URL correction from zoombapup's previous post:

http://gameattorney.com/


.

[zoombapup]

Damn american spelling :)

[dpapa]

well i got this lawyers email and sent him one asking if he would have clients outside the U.S. since we are not based in the U.S. Far from it. :)..

anyways, thanks again for all your help and info. There will be more!