I'm guessing like publishers and authors and record labels and musicians there are lots of different deals depending on the developer's reputation and even the specific IP.
I's say with CoD: MW2 Activision paid IW the full development costs up front, plus there was probably a bit of a % of gross sales on top.
An indie dev isn't going to have their full dev costs paid up front because the publisher isn't going to be sure they are going to make on the deal, so they will be making the dev take some of the risk. The Publisher will pay a bit up front bit most of it will be drip fed as the sales receipts come in. What's important for the indie dev is that the Publisher will have an agreement that if the game achieves a certain level of sales then the next game will be a better deal for the dev.
“The fundamental cause of the trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt.” - Bertrand Russell
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