Publisher-Developer Agreement

A publisher-developer agreement is contract between game developer publisher (distributor) regulating financing, distribution, marketing, profit sharing video game. Instead developer distributing game themselves (expensive), publisher handles distribution developer handles development.

Practical example: Studio developed video game. Studio small, no money marketing distribution. Publisher large company with money. Publisher proposes contract: “We’ll give $10 million development, marketing, publication. In return, we’ll collect 50% sales. Remaining 50% goes you.”

Contract components: (1) Financial—how much money publisher gives, what phases; (2) Marketing—publisher does marketing, how much money; (3) Distribution—publisher regulates distribution Steam, consoles, etc; (4) Profit share—how revenue split; (5) Royalties—if developer makes new game same IP, what agreed.

Advantages for developer: (1) Money—developer gets initial development money; (2) Marketing—publisher handles marketing expensive; (3) Distribution—publisher has distributor relationships; (4) Risk sharing—if game doesn’t sell, publisher bears most risk.

However, developer has problems: (1) Control—publisher may require game made specific way; (2) Profit—developer gets only portion revenue; (3) IP rights—often publisher owns IP, not developer; (4) Termination—if game not good, publisher terminate contract.

For startups: Publisher-developer agreements standard industry. Be careful profit share IP ownership.