Publishing Agreement Pitfalls: A Practical Guide for Indie Devs

The following is a repost of a piece over on my own blog at www.legalgamer.weebly.com. This piece ended up being fairly long, but there's a TL;DR at the end and hopefully some of you find the more detailed sections helpful!

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A publishing deal is potentially one of the most important contracts you’ll ever enter into regarding your game. A good one can see long-term partnerships thrive and successful games brought to life, whereas a bad one can lead to bitter disputes about royalties, deadlines and even game / IP ownership.

I seriously believe that the vast majority of publishers out there aren’t intentionally looking to tie people into bad contracts. What I do think though is that the paperwork formalizing these deals isn’t always given the attention it deserves (by either devs or publishers) at the time when it’s needed the most - i.e. before signing. It’s a dev’s own responsibility to negotiate a good publishing agreement – don’t always just assume that the contract you’ve been given is fair or even 100% reflects what has been discussed verbally.

Publishing deals are more often than not fairly complex and unless you’ve been through the process several times before, there’s little substitute for getting a professional advisor involved (i.e. a lawyer, consultant, business advisor, veteran indie dev etc). However, for those still looking to go it alone, I wanted to put together this guide to help identify some of the things which you should normally think about when negotiating a publishing deal, and the resulting answers put into the contract.

PRE-CONTRACT STUFF

Why do you want a publisher?
Before thinking about partnering with a publisher, it’s important to be clear on what you actually want out of the relationship. To answer that, it’s important to know what publishers typically do. This varies from publisher to publisher (more on this later), but can include:

Do you need a publisher?
Once you’ve decided what you want, the next step is to ask yourself if you actually need a publisher to achieve these things – i.e. is there some alternative means out there which doesn’t involve giving away royalties/rights in your game. For example, are there any alternative funding options available (e.g. crowdfunding, the UK Games Fund, the Wellcome Trust, loans from friends/other devs)? Do you actually need a distribution partner if you’re only creating a digital-only Steam/console game? Which countries are you actually releasing in – do you need expertise in territories like Asia (which are notoriously difficult / impossible to pursue alone)? Do you need a publisher’s skill set for marketing and PR or are there any social media / PR agencies that could work equally as well? Could you even do some of these things yourself?

That last point is an important one. While it’s certainly possible to do some of these things yourself, remember that this is going to take time. A lot of time. Time which is keeping you from actually working on your game. And remember, a good publisher will have done this all multiple times before which should minimize mistakes and hopefully keep things as efficient as possible. Releasing a game solo is incredibly hard work – always think carefully about whether or not you can realistically achieve everything (including the business / admin stuff) that needs to be done.

If so, which publisher?
If you’ve decided to look for a publisher, the next step is finding the right publisher for you and your game. Publishers come in all shapes, sizes and personalities and finding the right one can take a fair amount of work. First off, you’ll want to make sure that the publishers (yes, plural – keep your options open) you’re actually targeting are known for offering the things you’ve decided you need – e.g. does that publisher actually offer completion funding? Do they actually have partners and connections in the foreign territories you want to reach? Do they have experience in the formats (physical/digital) on the platforms (consoles, PC etc) that you want to launch on? What have their previous marketing efforts looked like – were you impressed? Does their existing catalogue of titles and general reputation match up with the type of game you’re making?

You can find a huge amount of information about publishers online, whether through the publishers’ own websites, dev blogs, post-mortems on Gamasutra, generally Googling etc. Also, don’t be afraid to reach out to previous devs who have worked with that publisher in the past – particularly those whose games may not have been the biggest sellers or that had troubled development cycles (those devs will give you a better insight into what the publisher is like when things aren’t necessarily going perfectly). 

CONTRACT FUN

Once you’ve piqued the interest of a couple of publishers, it’s time to start getting into the details of the deal on the table. When it comes to publishing agreements, four of the most important areas to think about are: (1) Intellectual Property Rights; (2) Financials; (3) Milestones; and (4) Termination Rights and Consequences. 

(1) INTELLECTUAL PROPERTY RIGHTS

“If a game is your baby, the intellectual property is its soul” – this great Gama piece.

I love this quote because it perfectly encapsulates the importance of intellectual property rights (IPR) in a game. Whoever owns the IPRs basically has control over what is (and what isn’t) done with that game (but keep reading for exceptions to this!). As a result, IPR ownership should be one of the things at the front of your mind when negotiating a publishing deal. 

My default position when advising clients is that devs should retain full IPR ownership in the game that is created. However, there are no hard and fast rules here. If you’re faced with retaining IPR ownership but not being able to secure funding on the one hand, but giving up IPR ownership and securing a substantial development budget, a fair rev share across all income streams from a proven publisher, it’s at least worth being open to the deal on the table. A lot comes down to your own personal circumstances (e.g. do you need this deal to keep the studio afloat), how important this game is to you (maybe it’s not one you see becoming your primary franchise) and importantly, what other rights you get/give away in the rest of the publishing agreement.

Even if you retain IPR ownership, what should you look out for?
Even if you retain IPR ownership in the game, there are still a number of ways you could accidentally give away more than you intend to, which can drastically limit your control over your own game!  And that’s because even though you own your game, you’ll need to grant the publisher a ‘licence’ over this in order to legally permit the publisher to do all the good things they’re meant to do. Problems can arise though when the conditions of that licence are ambiguous or overly wide – the precise wording of a licence is very important and single words can make all the difference (no exaggeration!). When it comes to looking at licences, some of the things you should look out for include: