[The GameDiscoverCo game discovery newsletter is written by ‘how people find your game’ expert & GameDiscoverCo founder Simon Carless, and is a regular look at how people discover and buy video games in the 2020s.]
Well, I hope you all had a wonderful Christmas, and are gearing up for a similarly wonderful New Year. (Or at least, as wonderful as it gets in these, uhhh, tricky times.)
We had to pause during the holidays to write this one up, since it’s a complex and interesting subject. Raw Fury (Kingdom, Call Of The Sea, Backbone publishers) has made public its full publishing agreement, including revenue split percentages. Fun, eh? So let’s go…
Inside a publishing agreement!
Firstly, wanted to give kudos to Raw Fury for being willing to put this agreement out in full. (And not just because they link to me at the bottom of the post.) Transparency is pretty much always good, and helps the biz move forward. As they say: “We believe having publisher contracts out in the open helps level the playing field, and allows devs to have a more intimate understanding of the machinations of different deals when they start looking for partnerships.”
The agreement is part of a set of dev/pub resources which also include a sample pitch deck, mutual NDA, outsourcing & content creation sample legal contracts, and various other helpful documents. Again, extremely helpful.
But let’s get to the matter in hand - here’s the contract, translated into a few languages. And needless to say, publishing it it caused a bunch of drama - and plenty of legitimate questions and complaints - on Twitter.
It’s a little difficult to work out the best way to evaluate contracts, beyond ‘what financial terms are there, and are there any gotchas?’ So for the record:
The financial terms are, as Simon Boxer discussed on Twitter, but clarified & enhanced by me: “Funding amount + 15% gets recouped at 100% publisher recoup rate… external expenses such as paid marketing spend and external ‘services revenue’ - localization, porting, etc - are deducted from net revenue before royalties... 50% net revenue split after recoup of both.” (Obviously, Raw Fury is paying for its own internal staff for full-service marketing & most other services.)
Tracking down those extra expenses: according to Tweets from Raw Fury staff, sounds like services revenue can be $100-150,000, and external marketing spend can be about $75-150,000. But it’s somewhat variable and based on the specific game.
There are no major contract gotchas, but a number of small/medium things that I’ll let others talk about presently. The contract is clear about what it wants, nobody is trying to take your IP or perpetual franchise rights, and there’s clear instructions on when and how everyone is funded and recompensed.
And here’s what Raw Fury notes you get in exchange for this deal, in addition to - obviously - money to make the game, which you didn’t have already and probably needed: “Production support… PR, marketing, sales management, partner/platform relations, IP refinement (movies/tv-series… physical editions, vinyl, merch etc), quality assurance (internal and external), release management, events management, social and community focused work, media asset creation… and so on.” In other words, it’s pretty full-service.
So let’s make up an example here, just laying it all out. You’re somebody who signed a $500,000 USD deal with Raw Fury. This enables you to make your entire game, with their help. You launch your game. Here’s what you would see:
$575,000 in Raw Fury’s bank account - initial breakeven, not including marketing/services costs (some of which might be post-launch.)
$800,000 - breakeven including estimated marketing/services costs.
$800,000 to infinity - royalties happen! 50% goes to Raw Fury, 50% goes to you.
One important thing to note here. I tend to talk about ‘gross’ and ‘net’ in this newsletter as if gross is the ‘total amount of $ people paid for your game’, and net is ‘cost after the platforms take their share’. This legal contract has gross as ‘all the money that Raw Fury receives’ - so basically what I talk about net as - and then net as ‘all the money Raw Fury receives minus marketing/services costs and porting costs’.
This is fine, but just noting that that if you had no platform deals that came as lump sums (like Xbox Game Pass deals), you would need to sell $1.28 million worth of the game to get into royalties on this title. That’s presuming that post-platform net is 61% of gross, and is a composite number based on Steam % being lower and console being higher, and better Steam sales than console. This type of flowthrough is normal. But many people forget!
(Of course, if you get a $300,000 Game Pass or Stadia deal, paid directly without any platform cuts, it significantly winnows down the path to royalties. This is actually one of the bigger advantages of reputable indie publishers nowadays - easier access to these deals.)
The way it extends from there - $2 million worth of the game’s digital ‘retail’ sales with no platform deals would end up with the developer having had all of its dev costs paid for, and an additional $210,000. (Raw Fury would also get $210,000, under this scenario.)
For a bigger hit - let’s say $5 million in raw revenue - the dev will get all its dev costs plus $1.125 million, and Raw Fury will get $1.125 million. (The ‘net’ is $3.05 million on this $5 million in sales.) If your game starts to become a bigger hit, the cut to the publisher certainly starts to mount up.
So really - what does the Internet think?
As is often the case on the Twitter-verse, there was a lot of yelling - some productive, some less so - over the contract reveal. Foremost among the more productive yellers was Jan Willem Nijman (Disc Room, Minit, formerly half of Vlambeer), who commented on it in an annotated document.
JW knows indie publishing agreements well in the abstract (having signed multiple with Devolver, for example.) And while he goes pretty deep on some of specific legal comments, I think his main points are:
In his view, 50% rev share post-recoup is a high royalty rate, especially to be set in stone for every Raw Fury game: “It is absolutely WILD that this is fixed and not dependent on project budget/advance size. The industry standard (on the non-scummy side) up to around $100k advance is 70/30 for the dev/publisher (after costs have been recouped).”
The 100% recoup also concerns him: “Raw Fury also does not give you any revenue before recouping (including that mark up), which is also not necessarily standard.” This depends on if Raw Fury has post-launch paid milestones, but it’s true that 100% recoup (as opposed to 80% to publisher and 20% to dev, which is becoming more common) often means that you need immediate post-launch funding from elsewhere to keep operating as a company. Which is no bueno.
The contract in general has a lot of publisher protections, and a number of specific paths that may end up benefiting Raw Fury - even if they never intend to use them - but not the dev. (That probably sums up the many other frustrated comments he made! I agree that the contract has some sharp edges.)
I did ping JW to say his prominent comment that 70% dev/30% pub being the ‘industry standard’ royalty, even with an advance, wasn’t what I’ve seen. Recent research by Voyer Law, albeit from a pretty limited pool, suggested that on average, there were “advances of between $100,000 and $500,000: 55/45 split, in favor of developer… advances of over $500,000: 53/47 split, in favor of developers… 71% [average to dev] in no-advance deals.”
But there are definitely many great, more ‘informal’ publishers - folks like Devolver, Finji and others - who I believe deviate positively from Kellen’s research, and towards JW’s wished-for standard. If they like your game and want to work with you, of course.
One well-considered set of comments came from Cassia Curran (Wings Fund advisor & Curran Games Agency founder!), who noted the split disparity too, and commented:
“Raw Fury's agreement feels like it was first written by a lawyer intent on doing their duty in protecting their client, and then modified by a biz dev person to be nicer and more friendly to indie devs. So the terms are on the whole written to protect Raw Fury, not the indie dev…
Which I think is fine, but it means that *you* *must* *get* *a* *lawyer* who is experienced with game publishing to review. And *you* *must* *negotiate* the terms to protect yourself and to get what you want out of the partnership.
I have not seen a 15% markup on an advance before, but I can instantly see why they would do that; it's to incentivize the indie game dev not to keep asking for additional payments. I quite like the idea, but for 115% recoup and 50/50 split the pub services have to be *GOLDEN*.” Agree.
Bonus data which came through as a result of this? The folks at boutique ‘cozy games’ publisher Whitethorn Games (Calico) also shared its publishing agreement
