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Procrastinato on 17 July 2009
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JaggedSac said:
Procrastinato said:

@Squill: thanks ;)

@others:

Note the part where the contract states:

"Royalty Split of Net Receipts (Calculated after cost of goods (Cogs) are

reimbursed): 60% - Take 2; 40% - Interplay. Subject to recoupment of any

advances, royalties will be due sixty (60) days after the month end in which

such units of a Product are shipped."

 

Key word: "advances"... i.e. dev costs.

 

Do they consider the gaurantee an advance?  I think that means that any money over the 2 million will be paid back in this manner.  The gaurantee would be for development costs.  Am I interpretting this wrong?

 

You'd think that would be more "fair" (from the dev perspective), but that's not how it works.

Sadly (for devs), the development budget is considered their part of the investment, and the money to pay off this "advance" all comes from their eventual portion of the proceeds -- the publisher doesn't pay themselves back with their own portion.

Many reknowned dev houses get decent cuts (like 60/40, etc.), but they are still required to pay back the dev costs before they see a dime of royalties (its just a load easier to do).  The lower-cost houses, which thrive mostly on license titles, minor games (casual and downloadables... not something you would often see on the shelf at a retailer), and ports, get really screwed with this system... typically their cut is about 25%, although 20% is not uncommon, and I've seen some contracts which exclude the developer from royalties altogether (usually on ports), or are really low (like 10%).

Recently, some publishers of digital software have been pretty generous to devs, in this regard.  50/50 is not uncommon, and proceeds from small self-published downloadable titles are sometimes even higher.  Sony recently announced that, if you use their own game engine tech (PhyreEngine?) to build you game, and have it be exclusive to PSN, they do something like foregoing half of their own portion of the proceeds, until the extra income recieved, from that, has paid for the developer's costs, which is downright fantastic.