Publisher wants rights, how much to charge?

Discussion in 'Indie Business' started by 2dnoob, Nov 14, 2006.

  1. 2dnoob

    Original Member

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    Publisher wants the 100% rights to a game I coded. They want to sell it on the PC and port it to as many formats as they want to, for now and forever. Is there some kind of guideline for how much to charge them? The game is doing ok on the PC market but will find a much better home on the hand helds. Not interested in royalties, just a one time fee. Thanks.
     
  2. Sirrus

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    Price really depends on complexity of the game, how well it is currently selling, and how well it will sell on other platforms.
    We'd definately need more information to be of any help.
     
  3. Grey Alien

    Indie Author

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    How about working out how long it took you multiplied by a good hourly wage and add on any expenses (e.g. media/tools etc) and see if their offer is anywhere near this?
     
  4. 2dnoob

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    The game will probably end up selling 5-6k copies on the PC, but will really take off on the hand helds. If that helps...
     
  5. Grey Alien

    Indie Author

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    that's a lot of sales (for a downloadable game), it must be top notch then.
     
  6. Roman Budzowski

    Indie Author

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    5-6k is not top notch in my opinion - 100k is top notch :cool:

    And don't charge your publisher based on work you put into game development. Charge him price based on potential revenues.

    take care
    Roman
     
  7. LilGames

    LilGames New Member

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    Even with a one-time fee, you should still be asking for a royalty.
     
  8. Dyno Kid

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    Can i ask who is the publisher?

    Good Luck!!!

    Darren.
     
  9. Applewood

    Moderator Original Member Indie Author

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    They want exclusive rights to port your game onto many platforms, without offering a royalty ?

    Ask for a million quid. Take half that after a fight to get a royalty.

    Personally, I find this scenario a bit smelly. There's no serious publisher who'd prefer paying you (properly) upfront instead of royalties and for a deal like this, you want them too.
     
  10. 2dnoob

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    The no royalties is my suggestion. Looking for a lump sum up front instead. And yes, 5-6k sales on the PC does not mean top notch by any means.
     
  11. Applewood

    Moderator Original Member Indie Author

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    It's irrelevant how many sales *you* get. Totally irrelevant. It shouldn't even come up in the conversation. An example: My pool game isn't even ON sale yet, but I still wouldn't sell the rights to it for less than a six figure sum.

    It's value is related to its potential sales figures on the target platform, with the appropriate marketing etc that goes with it. They'll know this better than you, so you need to get a poker head on and be firm but reasonable and not selling yourself short.

    I've no clue how good or bad your game is, but for a publisher to even contact you, you gotta be talking five figures to open the batting. Six figures is still a drop in the ocean if your game has any potential at all.

    Take a royalty and let them suggest a recoupable one-off up-front payment against them. You'll still get a wedge in your hand, but you'll also know you're not getting undervalued/ripped off. 20-30% seems fair given they still have to do the porting work whilst you sit on your butt watching.
     
  12. Scharlo

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    Why not ? I sold multiplatform rights for one of my IP's to one of top 5 publishers for fixed fee. Even more, I believe most of the publishers would prefer one time fee than paying royalties for years.
     
  13. Applewood

    Moderator Original Member Indie Author

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    What I actually meant was, the entire scenario.

    Given we're talking about a 2D indie game, I'm envisioning some fly-by-night offering to buy a match-3 clone for a grand as opposed to EA buying a 3D masterwork for several million. My advice is hoping it's the latter, or at least in that direction.

    Regarding mainstream publishers - They won't worry about paying royalties for years, believe me. They have 40 people working in accounts to sort that out. The reason they'd love to pay you upfront is that it will be a tenth of the alternative. I'm pretty sure they'd only do it with completed games too, which is really a different and unusual ballgame.
     
  14. Coyote

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    #1: How much would you, personally, make selling it on your own? Not including your development expenses. Over the entire course of the games' lifespan? Let A = this amount.


    #2: How much time and effort that would be required of you in order to sell it on your own without a publisher (but with or without portals)? All the pain, hardship, long hours, time spent NOT working on your next game, advertising costs, customizing it for all the portals, whatever. Let B = how much this is worth to you. It may be pretty low if you are primarily going through portals, and it may be about equal to your dev costs if you are really trying emphasize direct sales on your own.


    #3: How much LESS pain and effort would it take to sell the sequel, port, or another product WITH THE SAME IP on your own if you'd gone through it on your own? If you'd already established your reputation, you OWNED the IP and so people were already familiar with it, set up your contacts list, maybe had your own customer list and newsletter, done the marketing work, etc. Let C = how much this is worth to you. (Hint... C is probably equal or slightly less than the value of B. You can assume 0.75 times B if you want to be really conservative).

    I'd say your bare minimum should be A + 3C - B. Not your opening bid --- the absolute minimum at which you should walk away from the deal happy that you made the right decision.

    C gets multiplied by three to consider your next THREE games. If you are very prolific, cranking out 2 games a year or more, then I'd say it should be closer to 5 or 6 times C. That value (minus B) is the minimum value that the IP should be worth to YOU.

    The value of the IP to the person buying it may be a lot higher than that. And they may be able to sell a lot higher numbers than you. Somewhere between how much the IP + sales is worth to THEM and that formula above is how much it's worth. It's what you can negotiate.
     
  15. Huge

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    Checkout the Squashy Software interview on http://indiegamepod.com/. May help to motivate you to treat the publisher a bit differently.
     
  16. James Gwertzman

    James Gwertzman New Member

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    there's nothing "smelly" about a publisher buying out the IP rights to a game for a lump-sum upfront. Of course the publisher would only do it if it thought it would end up paying you less than in a royalties situation. On the other hand, as a developer, there is a certain time value of money, and getting all the money up-front in a lump-sum can be very advantageous in some situations.

    for example, let's say your game might make you $100K over the next 2 years, $4K every month, with a standard royalty agreement. On the other hand, let's say a publisher is willing to pay you $50K for it now outright. Should you take the offer?

    Depends on your situation.

    If you have an idea in your head for an awesome AAA game, then taking the $50K in a lump-sum payment up front, and using that to fund development of your new game, is a great plan. The new game will hopefully make you far more money, and it might never get built if you didn't have all the money at once.

    On the other hand, if you already have other sources of income and you just want to maximize your long-term revenue, then a revenue share is probably a better model.

    Another thing to consider -- there's no way to predict the future. So the lump-sum payment now might very well be the better option. The publisher is basically taking all your risk off the table, and so it is fair for the publisher to be compenstated somewhat for taking away that risk.
     
  17. Dyno Kid

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    The only version finished is the pc version and again im not sure how much work they would need to do to convert it to the consoles but if they have to get a dev team in to do it then they won't offer you that much anyway will they?

    A publisher came to me about Dyno Kid but after initial talks he wanted 60% of profits and at the time i ran a mile thinking i can do better on my own, maybe i should of found out more information first.

    My new game is in development and i will be looking for a publishing deal for this one so any one know who might be interested in a casual pc game that will make a great DS PSP XBLA game?

    I know finding a good publisher is hard and i really don't know where to start looking.

    Good luck with the deal and i hope you get what you want.

    Darren.
     
  18. Birukoff

    Birukoff New Member

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    Start posting press-releases on gamespress.com
    You will be surprised how many publishers read this website ;)

    Also, I don't about your country, but we pay royalties and some amount in advance. If we estimate sales at 5000 copies then we can agree about 5$ royalty and then pay 20000$ in advance. This is the most common conditions.
     
    #18 Birukoff, Nov 15, 2006
    Last edited: Nov 15, 2006

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