Kellen Voyer wants to help indie devs better understand what they’re looking for in publishing agreements.
Voyer, himself a lawyer with a background in video game deals, tells GDC Summer attendees that, as it is, indie developers are at a double disadvantage when it comes to negotiating publishing agreements thanks in no small part to a lack of free flowing data about those deals.
“As part of this work helping our clients negotiate these agreements, I’ve realized that developers are at a two fold informational disadvantage,” explains Voyer. “First, they don’t know what key publishing terms mean. The second is that developers don’t know what is standard and what is not standard.”
Developers usually end up turning to fellow friends in the industry to find out if that ‘standard clause’ is actually a standard clause because so much of that data is shrouded in mystery.
Aiming to demystify that and give developers a better source than phoning a friend, Voyer collected data from 30 publishing agreements for a variety of non-mobile indie games to give developers an idea of what other teams are agreeing to in terms of advances, revenue share, IP ownership, and more.
(As a note on methodology, Voyer says that the 30 agreements cover indie game deals across most platforms, but exclude porting projects, localizations, and mobile titles since those deals tend to vary quite a bit from the norm.)
In short, an incredibly average publishing agreement for an incredibly average game should, according to Voyer's dataset, include a $318,000 advance paid out in milestones, with both the developer and publisher receiving a cut of revenue even before that advance is recouped.
Right away, that deal splits revenue 40/60 in favor of the publisher but, once the publisher recoups its advance, inverts to 60/40 in favor of the dev team. This hypothetical developer retains all rights to their incredibly average IP in a deal with a term of 6 years, includes an audit right, and allows the publisher to set pricing but restricts when they can set up discounts or game bundles.
So, to dig into the data powering those averages, lets take a look at the numbers and advice shared in his full GDC Summer talk, category by category:
Advance
The average advance to fund a game is $318,000, including both advance and no advance deals
Counting only deals with an advance, the average amount is $460,000
Lowest advance: $100,000
Highest advance: $2 million
18 percent of the agreements had no advance, likely due to higher revenue share
68 percent of deals pay advances in multiple milestones
32 percent of deals pay in lump sums, more likely in cases where platform owners are trying to attract more users
81 percent have advances that need to be recouped
42 percent of deals require advances to be recouped before developers see a single dollar
58 percent see the advance recouped while both the developer and publisher receive revenue share
Voyer's advice: Don't agree to deals that require a full recoup of the advance before revenue share kicks in, and, in the case of milestone deals, negotiate for clear milestone definitions. Otherwise, publishers define the terms, and promises to "hash it out later" are super risky on the developer side.
Revenue Share
The average revenue split sees developers taking 60 percent, publishers taking 40
That jumps up to 71 percent to devs in the case of no-advance deals, often seen in deals with nearly-finished games that only need marketing support and the like.
That drops to 55 percent to devs when only averaging deals that include an advance
The size of an advance doesn't impact revenue share splits, according to Voyer's data
Advances of between 100,000 and 500,000: 55/45 split, in favor of developers
Advances of over 500,000: 53/47 split, in favor of developers
In 45 percent of deals, revenue share varied during the term: It's not always a fixed number for the duration of the deal! Often terms will favor the publisher, then shift to better favor developers once the advance has been recouped.
Voyer's advice: "If a publisher comes to you with a 50/50 deal, push back! You always need to push back. And recognize that a publisher's concerns really are protecting their investment and de-risking things. There's a higher risk with a lower revenue share."
IP Ownership
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