considerations on signing publishing agreements with publishers

Twitter Thread:: Some Considerations on signing publishing agreements with publishers by @jakefriend_dev

We are continuing with our activity of archiving really interesting twitter threads. In this case one with Some considerations on signing publishing agreements with publishers by @jakefriend_dev, which can be very useful in case you are starting your journey on finding the right publisher for your game.

In this case, we are recommending also the reading of the original twitter thread as the recompilation is not able to reach the level of deepness of the thread and its different replies which are very rich in knowledge and that are a must for every game developer thinking in starting a relation with a publisher, or just wanting to know more about it.

We have already approached some other aspects on other articles about the process of making games with the right approach not only for self-publishing or to look for a games publisher.

Original Thread Some considerations on signing publishing agreements with publishers

Edited Thread Some considerations on signing publishing agreements with publishers

Hey #indiedev #gamedev, I turned down a pretty big publishing contract today for about half a million in total investment (I’m a solo dev). They genuinely wanted to work with me, but couldn’t see what was exploitative about the terms. I’m not under an NDA, wanna talk about it? 👀

Note that though nothing legally stops me, I’m not going to be naming the publisher – just imagine any indie PC/console publisher. It’s the industry that’s failing devs, not any one company.

So, everyone knows a business will protect its own interests, that’s fine. I wouldn’t expect someone to invest 6 figures in me without heavily mitigating risk. But the degree of control extended far past that, with insane breach penalizations for me – and zero for them.

considerations on signing publishing agreements with publishers - Some game publishers
considerations on signing publishing agreements with publishers – Some game publishers

Let’s start with the heaviest stuff: If the business invokes the breach of contract clause, here’s what happens:
– They keep the right to sell the game, and I lose my royalty (so, they keep 100% of revenue)
– I pay them back all money ever given to me, and…

– I also pay them *all development costs yet to come* for them to finish the game without me, with no limit to what that budget or cost is.

So, here’s me, a 30-year-old solo dev, facing a consequence where if my game is be taken away from me I’m also *in debt*.

The debt would be anywhere from 1/4 to 1/2 a million dollars, and with no option for further income. Likely any funds I’d already received would be spent on cost of living, and I… don’t *have* money like that, you know? So if this happens I’m in debt, *forever*.

This breach is *really easy* to trigger. I would never expect a producer to call for it – but if the business has a choice between paying for a game and getting >50% of revenue plus its money (eventually) back, or *not* paying for a game and getting 100% of revenue…

Obviously one is more blatantly self-benefitting, and even if unlikely, I can’t accept that massive risk without protection against someone at the top deciding to cut me loose one day. All it takes is one misstep to have cause to invoke.

(Notably, milestone builds could take 30-60 or more days to approve – but you can technically be read as in breach if it’s not approved 30 days past the due date, so there’s comfortable room for a breach to be claimed on a technicality.)

Oh, what happens if *they* breach contract you ask? I get to keep my game 🙂 Isn’t that nice? 🙂

Good luck proving it anyway: All publisher responsibilities total maybe 5 vague sentences that they must only try their “reasonable best” to do… any part of their entire job.

How about rev share? 50%/50% was on the high side for the funding I was seeking (5 figures, not 6), but still would’ve been very profitable for me. Except, pre-recoupment (ie. until they’ve been repaid about a quarter-mil), the terms are *100%/0%*.

Again: You will be due literally zero residual income from the moment the final build is approved until after around *24,000 copies* are sold.

And when I say “due” income by then, I don’t mean that you’ll be *receiving* it any time soon.

They don’t have to start paying you your share until *30 days after the end of the QUARTER*, ie. up to 4 months past when it’s *due*, and can withold “expected returns” up to 3 months more.

Keep in mind, there’s also no legal obligation to show you any financial records.

Oh yeah – and your (eventual) share is also expected to cover all global sales tax. Why would *that* be a burden the party responsible for handling sales covers?

I’m an individual and they’re a corporation – letting me earn literally any money pre-recoup doesn’t affect the eventual full recoupment or hurt them in any way, at all, either as a business or as individuals.

Catch them underpaying you? There’s no penalty clause (you’re repaid only what was withheld), and you’re going to pay for that auditor even if you DO prove fraud. For the Nth time, the exploitation is not just penalty-free but also PROFITABLE if I don’t opt to gamble that cost.

Have a disagreement over being told to add advertising systems to your game, or over changing/adding content you don’t agree with? Guess what – they can have a 3rd-party dev it anyway, and you’re paying for it. (Also no defined budget/cost limit on this, as before)

When I voiced heavy concerns with the contract, they were surprised. Like, very honestly surprised.

Again, I don’t think they *meant* harm or to exploit. But predatory behaviour has been normalized in the industry. I guess it just doesn’t stand out anymore.

They responded by asserting the contract *couldn’t* be exploitative b/c top lawyers in the industry wrote it 🙄 and b/c other devs have signed it. The fact that they still easily sign devs on this is a poor reflection on the industry, not a vote in favour of the practice.

Important context: They approached *me*. I wasn’t looking for a publisher, and already had enough (barely, but enough) Kickstarter funds to go without them.

These were the terms offered with literally as much leverage as someone in my in my position can have.

If you’re reading this hoping to find a publisher to take your small project to the next level: Get the contract. READ the contract. Skip to the terms of termination and check what happens if something goes wrong.

Check how often and how quickly you get paid, and what visibility you have into the accounting process. Check how disagreements are resolved, and what triggers penalization. Check that they actually have to launch your game. CHECK.

No matter what you’re told conversationally, and regardless of if the people you’re speaking with mean well (which they probably do), the legal terms are the ONLY guarantees you have as to how the business has to treat you – and a business will never put you first in a pinch.

You are a person. They are a business. Don’t capitulate and don’t indebt yourself.

Me, I’m going to make the damn game anyways, you know?

Be good to each other. Thanks for reading.

Some follow-up – can’t reply to all comments anymore.

No idea how to respond to all the positive support. Thank you #indiedev. I’m really glad this has sparked more conversation, and to to see a lot of comments from devs saying they’ll approach publisher contracts a lot more cautiously now.

Some questions/answers/thoughts ITT:

The most important takeaway for anyone seeing this as a one off is to look at all the other indies sharing “yeah, I’ve seen these kind of terms before.” It is not one predatory company, it’s an industry that leverages us taking the ‘one bad apple’ mentality. This IS the norm.

> Half a mil is still half a mil, though!
Ignoring that I could be made to repay it & more, most of that was for marketing, plus console/localization support and a sound designer. I would have gotten around 65k, spread across two years. Again, that’s assuming I got to keep it.

> They might have changed terms if you had pushed back…
To save time, I went to the most problematic part (the breach terms). They weren’t willing to change that, and weren’t willing to acknowledge any other points I made. Negotiations wouldn’t have changed my risk from there.

> If you had an LLC you wouldn’t have been liable for the debt!
Not a structure in Canada, unfortunately. I’m just a sole proprietor, which doesn’t confer the same separation of business/human responsibility.

> Did you hire a lawyer?
I took about 8 hours to go through, make notes, and cross-reference to understand myself. Yes, I had planned to hire a lawyer before signing IF it got that far, but it was so bad that obviously wasn’t necessary.

After a while there were so many red flags I stopped counting orange/yellow ones. I can imagine a lawyer would have been able to find way more than I did.

Here’s some random bonuses from skimming my notes:

If *I* delay the project, I’m in breach and might have my life stripped away… but if *they* breach, I have the right to “seek” more time on milestones. The added time is not guaranteed and ofc not paid 😇

When I say breach of contract is easy, this is part of it too; they could delay things and choose not to extend milestone dates to put me in breach anyways. There’s just so many levers of power that I would have to trust them not to lean on.

One clause technically approves them to make DLC without me. I don’t think they would have, but it’s a sign the legal team was given direction to stack the cards. These days devs “get to” keep their IP, but “keep” has so many clauses that it’s in name only. They still control it.

There’s also no timelines limiting me from any added unpaid work they can legally demand of me. Any time inside the 5-year license-renewing period I could be made to add DLC, or pay for them to make some.

The license period itself only starts from launch, but launch is only something they need to “reasonably try” to do within 3 months of the final build submission, so the ball’s still in their court on that front too.

Marketing expenses are shared 50%/50%, which I don’t think is great but is better than 100/0. The marketing expenses section is comically short compared to the rest: Two sentences, stating that A) expenses will exist and B) that I pay half. Nothing about their obligations.

There’s plenty of small stuff I could have gotten changed, like the careful omission around their royalty record-keeping that doesn’t actually say they have to *share* those records – there was just no point fighting that battle when the war was well-lost off the jump.

Another easy-breach clause: If they need me to confirm their treat the property as theirs in a legal battle, they can choose how long I have to respond. It literally says “a period deemed reasonable by the Publisher”. Time periods NEED to be defined.

Oh, and in addition to having to provide all game materials and source code per milestone submission (which, idk, seems fine? so many other problems I didn’t check with mutuals), I also have to host all the source code and git project on a server of their choosing (ie. their own)

> Lawyers are scum!!
No – lawyers are regular people. These ones did a good job. They are hired to write exactly what the client requests, which was clearly complete immunity from risk. Lawyers shouldn’t be an easy target that lets publishers off the hook.

> They *definitely* knew they were screwing you!

The scouts might have (maybe?) – I don’t think the producers did. Either way, they don’t write the contracts, and they don’t have that kind of leverage. They aren’t the people who set out to create that toxic arrangement.

A few people made really good points ITT about how if the staff involved were replaced, I’d have no guarantee as to how the new people would treat me. That’s really important. I think the producer I spoke the most with really wanted a fair deal for me – but it wasn’t his call.

One last tangent. The way these contracts are written is partially confusing in nature, and partially confusing by design. The termination clause implications are NOT immediately obvious. It’s broken up, not shown sequentially, and requires basically mapping out for yourself.

EG, 12.7b says they’d still have to pay all due royalties on termination – but a different clause elsewhere says no royalties would be due circumstantially, & there’s different variations of clauses depending on circumstances that creates a matrix of outcomes under the surface.

Not sure what more to say; conversation’s moving too fast for me to keep up with but I appreciate all of you helping get the word out. The industry will ONLY change if devs stick together and push back on these terms 🎬

(publishers DMing me that you’re glad you’re not like that – read the room!! not the time and place buckeroos)

Youtube video: You don´t need a F***ing Publisher

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Originally tweeted by jakefriend (@jakefriend_dev) on August 14, 2021.

Originally tweeted by jakefriend (@jakefriend_dev) on August 13, 2021.

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