Effective talk: Does and donts of publishing agreement
Year of Talk: 2021
THIS IS NOT LEGAL ADVICE. JUST THE OPINION OF THE PERSON DOING THE PRESENTATION ON WHAT COMMON PITFALLS
Factors that affect publishing terms:
The Publisher.
Budget needed.
Experience of team member (Individual and as a team).
# of games made.
Current stage of development.
Deciding factors for contracts not being signed:
Who owns the game IP.
Bad/inconvenient license terms.
Bad/inconvenient payment terms.
Game IP:
A publisher needs permission to use the IP in any form.
Usually, publishers give the right to use the game. But can be done in different ways.
Rights can be given through exclusive rights to the game license (I.E only the publishers can release anything related to the game), or an intellectual property assignment (Gets full rights).
Assignment of IP:
The assignment can be for specific areas of the game (Art, audio, etc) or the whole game.
The ownership gets transferred from the developers to the publisher. So only the publishers can give permission to release more things related to that IP.
Will allow the publishers to get the rights to the game for some fee or percentage of future revenue.
Determine how comfortable you are with giving away part or your whole IP to a publisher.
A possible solution is to have all rights returned to you after x amount of time. Normally a good idea if the deal is for money for development or other smaller areas.
Bad/Inconvenient Licence Terms (Timing and Territory):
Bad terms can include perpetual exclusivity terms or terms that would restart with ports/DLC or new game releases.
At times there can be auto-renewal of the license unless a specific (And possibly tedious) option is followed to cancel the auto-renewal. The publisher is hoping the developers don't notice and let them keep the rights forever.
If the publisher is asking for worldwide rights to sell the game then make sure they have a solid plan to sell the game worldwide.
Bad/Inconvenient Licence Terms (Platforms and Porting):
Can be requesting the right to release on all current platforms AND any future platforms. This means that it gets any next-gen consoles.
Normally each platform will pay a % to each side. See how much it is and if its worth it.
Determine if you/the dev team are required to publish on all platforms or the publishers are expecting other dev teams to do that. Might be on the hook for all the consoles.
If there is a platform they are asking the rights for but don't want the game to be developed in it yet try to determine why.
A possibility is to determine a first platform to release and then write in the contract a right for the first option that gives the publisher the right to be the first company to be approached if the developers want to make ports to other consoles.
If the publishers want to create ports but don't have a development team then try to have your team be the first development team they need to approach for the project.
Bad/Inconvenient Licence Terms (Future Games and other Rights):
Many publishers will ask for complete rights to the game. Determine what future games they are planning on doing with said rights. If there aren't any plans then ask why they need it and if they are willing to budge on it.
The option of right of first refusal/option allows either the publisher or developers the first opportunity to decide if either side wants to make a new game.
An option to buy the IP in the future or during the development. Useful if either side wants to move on or believes that the IP is valuable enough and they can do a better job.
Some terms may include clauses to restrict what type of future games the developers can make. I.E. not games with similar mechanics or looks.
If these terms to exist make sure you go over previous deals you made to sell other items like merchandising or soundtracks. This can create a breach of contract.
Bad/Inconvenient Payment Terms (Front End):
This payment normally is cash the team receives during development when certain milestones are met. Normally will require the publisher to determine if milestones have been met.
A few reasons why publishers might deny a milestone include (But not limited to) not reaching a certain deadline or a performance metric that has been reached.
Make sure to include time limits to make sure they will still pay you after a certain amount of time. As there can be delays due to publisher or other external factors it is useful to have stipulations on when the time limit comes into effect and the publishers need to deliver the money.
Can be useful to have an auto-approval after a certain amount of time has passed and no response from the publishers has been sent to the developers.
Include a requirement for giving a certain amount of feedback at each milestone, especially if it has been rejected to make sure the dev team knows what needs to improve.
Be careful that the type of feedback can lead to scope creep as they might want/expect more features or have certain features to be drastically altered causing timeline delays.
Determine if you get creative control for the game or if the publishers are able to push you towards certain directions that you hadn't initially intended.
It can be useful to have a highly developed budget to know when you would need to receive money. It is important to align it with the payment terms that the publisher places in the contract.
Bad/Inconvenient Payment Terms (Back End):
Determine all the ways that the publisher and development team are receiving money. Maybe there is toys or merchandise that are subsidizing certain areas.
See how the publishing company is hoping to make money. It can help determine how “Expensive” it might be to have that publisher and if they will bring you enough money to justify their cost.
Publishers might try to hide costs from you under “Internal costs”. Ensure that the publisher and developers create a detailed list of what everything they are deducing should cost and how they are reaching that value.
Asking for proof of their costs can help keep them honest so they don't accidentally add extra costs that never existed.
Read through the payment terms. There might be a clause that asks for payment back in x amount of time or else.
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