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This year, the latest release of IO Interactive’s long-standing stealth series, Hitman, is back with everyone’s favorite barcoded assassin. However, in this series, I’m not very interested in Agent 47’s abuse, and instead focus on the part of the public contract that can kill games and businesses.
Developers have all rights to negotiate publishing contracts
Publishers aren’t actively trying to get developers to sign bad deals, but their publishing terms always favor their business over their business. That’s because publishers are also in the game business. Like you, they are trying to make a profit, and their contracts are aimed at protecting their business if things go wrong between you.
If the publisher gives you a contract, they will I want Your game …
… So let’s work on contract negotiations with confidence.As a developer You have all the rights to negotiate your publishing contract.. This includes amending both the commercial and legal terms if they are not suitable for your business. This doesn’t mean you can expect publishers to sign the game on completely different terms, but the end result of the negotiations should be a compromise that both sides are happy with.
This series of posts suggests how developers can eliminate danger signals that can cause problems when developing and launching games.
Contract Killer 1: Bad payment terms (front end)
Access to funding is the main reason most developers want publisher support. These are cash in development (front-end payments) to help end and launch the game, and revenue payments (back-end payments) generated by the sale of the game.
Front-end payments made during development are usually in the form of development fees (also known as prepaid development, minimum guarantee, etc.). Back-end payments are typically made in the form of revenue sharing. Back-end payment terms are discussed in detail in Part 2.
Front-end payment terms
Front-end payments (development fees associated with developers who complete and deliver agreed milestones) are most often associated with the issuer who provides approval for each milestone.
Milestones can be configured in different ways, but as a general example, create these artifacts every month. This requires the developer to deliver the build to the publisher every month for the publisher to approve. If the publisher provides such approval, the developer can claim payment for the applicable development costs. This process repeats until the Gold Master or release version of the game is approved for release by the publisher.
Development costs are usually associated with the delivery (and publisher approval) of certain milestones.
As you may have noticed from the example above, developers only receive front-end payments if the publisher approves. This isn’t a problem if the publisher is engaged in providing feedback on the build, but what if the publisher is silent?
The result of this is terribly unfair. You could put a perfectly good build on the publisher’s shelf, but you’ll be penalized if you don’t pay for it because it’s not approved by the publisher and you don’t reach the next milestone. This allows you to violate the publishing contract and the publisher to leave without penalty or in some cases in your game.
Timing is everything.
To avoid delays that aren’t your fault, you can put time limits on publishers to perform certain tasks-their obligations, especially related to the evaluation and approval of builds and milestone deliverables. This is a normal practice and issuers can usually accept a reasonable amount of time (for example, 10 business days) to see each milestone.
Computer says “yes”
To avoid the above situation, it is also common to require developers to automatically approve builds for payment purposes. Publisher does not explicitly provide approval or rejection of a particular build within this agreed time limit.
This allows you to send (and receive payment) invoices for delivered milestones, but also gives you the flexibility to request corrections if the publisher does not approve the build.
- Please check the contract for evaluation or approval provisions
- Does the publisher need to provide build / milestone approval or denial within the specified time frame? If not, add one to.
- Automate build / milestone approval if the publisher does not provide feedback within the specified time limit.
thank you for reading.Part 2 of the Contract Killer looks at bad payment terms that can affect you on the backend.. soon!