Pros and Cons of Country-by-Country Deals

Many developers do not consider this type of deal structure when they are looking to get their game to market. However, if a developer can meet the criteria for doing deals in this manner, they will likely see much larger returns in the long run and sometimes on the advance as well. Starting with the higher royalty rates a developer will see, let's look at the advantages of a country-by-country deal.

Royalty Rates

Royalty rates with these publishers are usually much higher from the beginning. By cutting straight to the source and dealing with a country-specific publisher, a developer can see a royalty rate of 30 to 35%. There are fewer middlemen and lesser margins to factor into the net receipts definition of the contract, so this money is passed on to the developer.

Focused Marketing

Where many worldwide publishers will use one marketing strategy for all markets, a country-by-country publisher will use the strategy that best fits their market. These strategies will vary from country to country, and the companies that specialize in one market will know which channels and strategies work best for promoting a title. The amount of revenue spent will be very close to a worldwide publisher, but the effect will be much greater as the effort is always put in the best place.

Wider Variety of Partners

There are almost 1,000 publishers of videogames around the world. Obviously, some of these publishers operate in territories that generate very small deals, but on the average there are anywhere from 10 to 20 publishers and distributors per territory. With this selection available, it is much easier for a developer to select a partner with whom they are comfortable.

Furthermore, developers will always see a greater response from publishers when they are showing a near complete title, and the options for partners that this model provides makes for a better deal for the developer.

Direct Contact with Decision Makers

When dealing with a worldwide publisher, there is a strong chance that the developer will be dealing with a product manager or producer. When a developer establishes a relationship with a country-by-country publisher, they will most likely be working with one of the principals of the company or someone nearly as powerful. This translates into a better relationship for all parties involved and a much quicker period for evaluations and contract negotiation. In many cases, a title can be evaluated and contract signed within one to two months because of the lesser amount of internal red tape from the publisher.

More Mind Share

The final major advantage a developer will see from this model is the amount of mind share the publisher grants to a project. Some of these companies will release fewer than one game per month. With fewer games going to the retailers, each is very important to the publisher. This places the interest of the publisher and developer perfectly in line. Both companies have to work well together to ensure a successful launch. The publisher cannot allow one of their games to fail, as it will have a drastic effect on their income for the year. With this type of dedication, the relationship will work out better for both sides.