Hello,
I am part of a team with an online PvP game. We get good buzz when we post our work and had a major publisher reach out to us and casually express interest in our work a while back. We finally have a stable build and are about to present to them our work thus far!
It is very exciting, but also nerve-wracking, because our game development experience is very limited. So with that in mind...
What the heck is a good publishing deal for an indie studio like us? There is frustratingly little information on this specific question, and what I find is all over the place. Here are examples of what I've read are "typical" deals:
- The publisher handles all marketing expenses and takes a 70% cut of the revenue, leaving the studio with 30%. The studio keeps the IP and assets.
- The publisher handles all marketing expenses and takes 100% of the earnings until the marketing budget is recouped. After this point, the publisher takes a 30% cut, and the developers get 70%.
- The developer pays 25% of the cost of developing the game and the publisher splits the revenue with them.
- The developer doesn't make much money after the sale of the game. Instead, they should negotiate as large of a budget as possible to the publisher and use as little of it as possible in developing the game.
These deals are all over the place!
We have so many questions of our own:
- How much of the budget should the developer expect the publisher to pay? (Is this a major reason to partner with a publisher, or is it really for their marketing spend/connections?)
- Will the publisher expect us to quit our full time jobs to work on this?
- Should the devs be asking for any salary at all? Maybe just enough to keep a roof over our heads?
- What assets should we expect to keep - our source code, at the very least?
- Should the publishers buy us out for the work we've done this far, or is that just "written off" as the cost of getting a vertical slice demo?
- How do we decide what's a reasonable marketing budget, development budget, and revenue split with the publisher? Is there a good rule of thumb for how much money should be spent on budget vs. marketing? (I know the marketing expense is significantly higher than the production costs for Hollywood movies, for example)
- We have funding for another year without a publisher. It is our own money. We would rather not use it, but should we consider using it as a negotiating chip to increase our revenue take, or is that weird?
It is scary looking at the digital distribution channels' takes (especially Steam) and licensing fees on top of the publisher's take. We do not want to lose our shirts... in fact, our game is fun and we want to make money!
Thank you in advance!