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Licensor Royalties

Started by magpiemick Jul 31, 2002 at 12:32 AM 2 replies 1.3k views

Original Post

Jul 31, 2002 at 12:32 AM

Hi there, I am in negotiations with a company about bringing their licenses to PC and consoles. Considering we have been only a work for hire company so far this is new ground for us. Does anyone know what typical royalties are for licensors? The licensor also wants to know "minimum numbers". I am assuming this means a guarantee royalty payment for x number of copies sold regardless of whether you actually hit that sales figure. Can someone confirm this? Cheers Magpiemick

Obscure

Aug 2, 2002 at 10:48 AM

Depends entirely on the value of the license and how good a negotiator you are. Could be anything from 10 cents per unit up to several dollars.

The minimum sales figure may just be them asking what you think the minimum will be so that they can calc potential earnings or it could be a request for a guaranteed advance. As an example I worked on several coin-op licenses that had advances of $30k @ $1 per unit.

If they want an advance you could negotiate to stagger payments. Something like one third on signing, one third on release and one third 60 days after release. That will help to minimise your up front cost.

Dan Marchant
Obscure Productions

magpiemick

Aug 4, 2002 at 6:59 PM

Thanks Dan,

So you have worked on coin-op games before? What sort of business model did you work on? Was it the typical advance on royalties deal?

Obscure

Aug 8, 2002 at 5:10 PM

Yes I did about 10 coin-op titles. All advance against royalties with split payments as mentioned above. Last time I talked to a Japanese coin op company (year and a half ago) they were still working the same way.

Dan Marchant
Obscure Productions

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