The Publishing Contract in Action

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Dana has been pounding the pavement at conferences and trade shows since March, meeting with publishing-side producers from her days at Defunct as well as anyone else she thinks might be able to help Double D. The pitches go well; everyone seems comfortable knowing that the team has worked together before and has shipped product together. The prototype crashes twice, but the publishing executives don't seem to mind. They are very appreciative of her, game sell sheet and "business plan," and more than one product development staffer told her "Wow. This makes my life a lot easier." Pending due diligence examination, Double D ends up with three indications of interest:

  1. Publisher A likes the property and has confidence in the team's ability to execute, offering the full budgeted amount but insisting on outright ownership of the intellectual property for the content.

  2. Publisher B is impressed by the prototype and the team and wants to hire Double D immedi ately to develop a reasonably interesting license that B has recently acquired .

  3. Publisher C, unbeknownst to Dana, is strapped for cash and needs to fill a revenue hole in its fourth quarter 2005. It likes Double D's story and feels that the development team is low-risk thanks to its experience at Defunct. It can't offer Double D the full production budg et Dana is asking for, but it's willing to let Double D hang onto the entertainment and mer chandise rights to the property (subject to sharing 40 percent of the revenue with Publisher C) if it will develop the game for 30 percent less than its current budget.

The founders talk over the offers. Publisher A's offer is persuasive because it would allow the company to get onto a solid financial footing and to produce the game they want to build. At the same time, it is heartbreaking to think of their story becoming the property of another party, even if Double D does get a share of any revenue.

There is some talk of taking Publisher B's offer as a way of establishing a solid reputation and relationship with a publisher and pitching their game again in a year and half, but Pat asks the group : "Why not just take jobs with other developers if we're going to be doing someone else's idea?" Alex replies: "So we can live in Podunk and won't have to relocate?" Pat admits that this is sound logic, but Publisher A still seems preferable to Publisher B.

The group spends the most amount of time analyzing Publisher C's offer. Everyone likes the idea of hanging onto ownership of the property, but Dusty mentions rumors going around that Publisher C has been having trouble paying milestones. The team believes that they would be able to build a good game for 30 percent less than the original budget, but it wouldn't leave much margin for error or lag in finding their next project.

Ultimately, the group leans toward Publisher C, and calls its game attorney, Lucy Wright, to dis cuss concerns. Lucy warns them that there is not a whole lot that can be done if the publisher starts paying milestones late and that she, too, has heard the rumors about Publisher C's finan cial issues. Lucy also notes that maybe Publisher A would be amenable to a long term exclusive license to all rights instead of ownership of the property, so that Double D may negotiate for reversion of some rights if not used after a certain period of time. Lucy also warns Double D that it doesn't want to cut too lean a deal for Publisher A. If Publisher A has a choice between putting marketing dollars behind a property it owns versus a property it doesn't own, it is likely to give short shrift to a property owned by someone else. Therefore, it is very important to negotiate a deal where Publisher A has functional ownership of the property as long as it is using it. Double D decides to have Lucy call Publisher A and discuss the possibility of a long term license.

Lucy has a good reputation with Publisher A, which helps the discussion go smoothly. Publisher A agrees that, as long as it keeps exclusive rights for the duration of its use of the property, a long-term license with reversions will be acceptable. Double D is double- delighted , and has Lucy negotiate a license. See end of chapter.

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Game Development Business and Legal Guide
Game Development Business and Legal Guide (Premier Press Game Development)
ISBN: 1592000428
EAN: 2147483647
Year: 2003
Pages: 63

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