RE: Publisher payments (was Re: [GD-General] Prices of well-known 3D engines)

[Frank D. <fra...@ho...>]

Hi,

These numbers sound quite high to me for an unknown developer. Is this still 
the case in the current economic situation? Game publishers probably have 
the same problems that other companies have, and might not want to invest in 
unknown companies. I suppose they could say that you have to live with 
smaller advance payments during the development process, and perhaps give 
you a higher percentage of the royalties. Does it make a large difference 
what platform you're working on? PC sales are known to be lower than console 
sales, so are these numbers much lower?

Anyone else would like to share info on this subject?

Regards,
Frank

>From: "Paul Reynolds" <pa...@so...>
>Reply-To: gam...@li...
>To: <gam...@li...>
>Subject: RE: Publisher payments (was Re: [GD-General] Prices of well-known 
>3D engines)
>Date: Fri, 6 Jun 2003 17:41:31 -0700
>
>It's truly dependent on the project (scope, genre, platforms, schedule,
>etc.) and the resulting negotiations. So everything below this line is
>conjecture based on my experience (as a programmer, not exec) in the
>industry.
>
>Typically, everything is paid on deliverables (milestones). The contract is
>usually considered the first milestone. The "pure" thought is that the
>milestone payments just cover your development costs while you make a game
>for your publisher. Then you receive payment (royalties) once the publisher
>has recouped their expenses (your milestone payments). But, in my
>experience, the studio can pull in a little profit from the milestone
>payments as well. The terms of the royalties can vary wildly.
>
>So your milestone payments should at least keep your studio going since
>that's probably your only incoming cash. So, back to your question, a 5 man
>project could have 1 producer (~$100k), 2 artist's (~$50K ea.), 2 SE It's
>(~$70K ea), and 1 SE III (~$100K ea).
>
>($440K)/12 months = $37,000 for a milestone just to cover salaries.
>Throw on another $30K for administrative staff and offices. As an 
>incredibly
>rough estimate, say you manage to negotiate an $80K milestone payment
>(which, I believe is reasonable for a low budget title), you could
>conceivably have a positive cash flow of a few thousand bucks. Which isn't
>bad considering you've already made payroll and paid rent. I won't even get
>into on time delivery bonuses/penalties and contract amendments. But, the
>reality is a five man team is going to have a rough time putting out any
>sort of commercial game in a reasonable time frame.
>
>Factor by 0.75 for Spain, 0.5 for Ukraine, and 0.25 for China ;op

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