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September 9, 2011

Hey Indie…Head’s UP, You have a Target on Your Back!

Filed under: Thoughts and Rants — Tom B @ 5:19 pm

While you have been buried deep in your design, code and art for your game, dark forces have been gathering - planning your enslavement. Notch’s success with Minecraft got a lot of attention. And not just from the gamer community but also from Farengi type business goons. You see, to them Minecraft is not a great game, it is a potent financial engine that, if harnessed, could be filling their coffers with gold pressed latinum.


First, let me say this, there are many solid fair dealing publishers and distributors out there who can contribute to the success of your game and, more importantly, to your studio’s ultimate success. But there are also a slew of bottom feeders who offer nothing but exploitation to any unwary developer looking to get his passion project in the world. I started seeing this crop up around the same time that word got out on Minecraft’s financial success. Like circling vultures with the smell of death in their nostrils, these “so called” publishing partners began to sign up Indies, launch Indie “friendly” portals and even run contests with the big award being getting the privilege to get screwed as first prize.

Ultimately, these folks offer little but an opportunity to get yourself and your game locked into a relationship that benefits them and does little or nothing for the developer. Often these so called publishing agreements lock the developer into ongoing obligations that not only take a disproportionate share of revenue from sales, they also allow the publisher to hire others to port your game to other platforms, with the costs ultimately deducted from the developer’s share of revenue before they get anything, if, in fact they get anything from the ports. And this assumes that if the game is a success, they actually pay you your share of the revenue.

The simple fact is that this is often not the case with some of the more aggressive exploiters. After all, you won’t have the money to hire a lawyer to go after them…and they know it because they hold your purse strings. So, take the time to ask around with others who have published through them (there’s a list of the games published right on the publisher’s web site), other indies and anyone else you can think of who may have an honest opinion before you get into any relationships like this.


Indies have been told that the real long term value in their game is in the ownership of the IP. But actually, it is not the mere ownership of the IP that creates long term value for you. It’s the control of the rights surrounding that ownership that facilitates the commercial exploitation of the IP. So, these good fellows will let you know right up front that they have no interest in owning your IP. Why should they when they can let you own it and then strip you of all the rights you might have to control or commercially exploit your IP going forward. They also commonly include rights to future games you may develop. So, not only is your game IP locked up, so is your studio. Heck, they even tie up ancillary revenue derived from the exploitation of merchandise like figurines, tee shirts and even future TV or film rights based on your game.


I recently counseled a developer who was considering a publishing deal for his nearly finished iOS/Android/PC game. The publisher was offering them a 40% rev share which they had negotiated up to 50%. This would be from net revenue after the deduction of all of the publisher’s costs, including marketing. I told them it did not seem like a deal worth considering and asked why they were considering taking. Their response was that they were unsure if they could adequately market their game and the publisher was making promises (though not willing to put them in writing and any meaningful way) that they knew how to market the game to make it a success. But he already had a deal to have it pre-loaded on some Android tablets, and after I took a look at the game I thought it would be acceptable on Steam as well. Hardly a bad shot at success.

I see very few reasons why any Indie would sign a digital distribution deal with a publisher as most, if not all, of these can be done directly with the digital or wireless portals. PC, iOS and Android games can easily be self-published. If you let a publisher do it for you, instead of getting the net pay out from the distributor, you end up with a share of that. In deals like this make sure any rev share the publisher is actually earned by them, not just given to them because they are cleverer than you are. Don’t do a deal like this lightly. Think long and hard, learn you options an gather as much information you can first.


So keep your options open. Often after months or years of having his or her head buried in their game it is not at all uncommon for a developer to have little or no objective ability to judge their game or to have a clue what to do once it’s done. Often they have not even been paying attention to recent industry trends or platform opportunities. Game designer extraordinaire, Daniel Cook, recently pointed many of these issues faced by Indies in his recent article Lessons Learned from the Indie Meatgrinder on Gamasutra which, if you have not already done so, you should give a hard read.

It’s great to make a cool game…but if you really want to do it for a living and not as a hobby, it’s a great idea to stick your head up once in a while to stay abreast of what’s going on in the marketplace. Otherwise, you’ll meet up with one of these bottom feeders. And if all you really want to do is make your game, fine. They will be more than happy to sell it for you.. Then both parties get what they want. ..you get to make your game and they get to make all the money.


So, what should you do? Well, to start with, don’t underestimate your bargaining position. Publishers make a living by selling games. Without what you provide they have nothing. Sure there is no shortage of eager developers out there willing to sign just about anything…but that’s no reason for you to do it. Like mom said, “If all your friends jumped off a cliff would you?” Besides, if they are interested in your title it probably means that they see value in it, and so should you.

Remember, the initial proposed deal a publisher sends is never a take it or leave it situation. It is the best deal for them. It is a starting point of the discussion. But should not be the deal you end up with. If they send you their best deal you should tear into it and make it the best deal for you and send it back. That’s how the process works. Take the same level of care you put into your game into getting the best deal you can. Retain your IP, but also retail control of it going forward. Don’t lock your game or your studio into a relationship that goes sour; have an out. For example, if the publisher wants the right to terminate the contract on 30 days notice, ask for the same right. Mutuality of rights and as limited a deal as possible is the way to go…at least try for it. Once you have done the best you can, decide if it is a deal worth taking. And, if you can’t do it yourself, get professional help. It may seem like a lot of money. But, in the end you will get much more benefit from the deal than whatever you have to pay for the help of an industry savvy professional.


Once you get an offer, don’t go all giddy. Sure it’s great to have a publisher think you game is worthwhile. But, you knew that, right? So, be patient in the process. The party willing to take time with the process of any negotiation almost always comes out on top. If a publisher tries to push you too fast, it’s a sure sign that they want to rush you into a bad deal. So, don’t let them rush you in the process, even if you’re in a hurry…slow it down. It will pay in the end. And remember, if you can’t say no, you can’t negotiate. The truth is that, ultimately, you may well be better of with no deal that with a bad deal. So, sometimes, it’s best to just say no.

I hope this helps some Indies to get that target off their back…and keep on making great games they love. Because that’s what it’s really about.

GL & HF!

Tom B

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