Publishing Contract Breakdown
Is your game being published? Congratulations!
When publishing your mobile game with a publisher you’ll need to sign a contract, and often they may seem daunting and confusing to understand. But don’t worry, as we’ve broken down the most important parts of contract – explaining what they mean for you and the important questions you should be asking.
Revenue Calculation and Payment
The revenue breakdown section tells you how revenue is split between yourself and the publisher over the duration of the contract. Generally speaking, the revenue that is split between the two parties (you and the publisher) is the ‘Net Revenue’. This revenue is calculated once the total revenue has the costs associated with user acquisition deducted.
How do you calculate the revenues ?
Make sure you understand how the revenues are calculated and the costs that are deducted from it. Do this by asking the publisher to give you concrete examples as their version of ‘net revenues’ could mean : Advertising revenues + In-App Purchase – User Acquisition Cost.
When do you get paid ?
It should also be clearly established the exact timeframe of when you’re paid. Many publishers will have different timeframes in which you’ll receive payment, so understand when and how. You could ask for the following : on the 10th of each month, the publisher and the developer have agreed on the figures of the past month, then the developper issues an invoice and the publisher must be paid in the next 15 days.
Do you have access to the data related to revenues and costs ?
Trust is good, transparency is even better in this business. Ensure that you have access to the data and revenues produced from the game. It’s important that your publisher is transparent with revenues and figures, so you know exactly how much you should be getting paid and not based on the word of the publisher.
Red Flag: Hidden Costs
Make sure you establish within the contract exactly how the net revenue is calculated. Read the contract to ensure that there are no hidden costs that may take away extra costs from the net revenue eventually split.
IP is an ‘intangible product as a result of creativity’ and in the case of developers, it’s the game itself. In most cases, the IP remains with the developer and the publisher is given the right to publish the game on their account. Establishing who owns the game will determine how it is used and changed in the future.
Ask the following questions : who is the owner of the code ? Who is the owner of the graphic designs used in the game ?
Red Flag: Confidentiality
Before the contract stage if you’re in the testing phases, ensure the publisher offers or is not opposed to signing an NDA. It essentially reflects the integrity of the publisher and that they respect the discretion of your game in this highly competitive industry.
Perimeter of Contract
Ensure you understand the perimeter of the contract. This includes paying attention to the duration of the contract and whether or not you are signing into exclusivity with the publisher. For example, some publishers will ask developers to sign into exclusivity with all their games. Meaning any new games produced by the developer should be forwarded to the publisher first before any other publishers.
Questions you should ask are: How many games am I required to make for the publisher? Is it just the one of one per month? Can I work with other publishers at the same time? In asking these questions you’ll be confident knowing there are no nasty surprises later down the track.
As the developer entering a contract, you need to identify the exact responsibilities and duties of both roles over the duration of the contract. For the most part, a majority of publisher/developer contracts will state that the developer is responsible for any technological aspects of the game – this includes but is not limited to game design changes, coding and SDK implementation. It can go further to include responsibilities for any bugs or crashes that occur, meaning you’ll be required to fix any issues in the shortest amount of time.
If you cannot meet your obligations and responsibilities defined, it can mean that you are in breach of the contract and risk termination and loss of your partnership with that publisher.
If either yourself or the publisher does not fulfill your responsibilities and obligations, then this could be a reason to end the contract. Every contract is different in how the contract can be terminated, based on time frames or certain instances, so it’s important to understand in your situation what applies to you and the publisher. It’s also important to understand what exactly will happen when your the contract ends. Questions to ask include: what happens to my game when the contract terminates? Does it return to me or stay with the publisher? What happens to UA and monetization efforts on the game?
The five parts mentioned above are the main parts that we recommend that a developer pays specific attention to when signing a contract. Here at Homa Games, we ensure our contracts are transparent and work together with you to ensure that you have a clear understanding of all sections. Most importantly, we place a heavy emphasis on ensuring a fair deal for our developers.
If you have more questions or are curious to know how you can publish with us, comment below or contact us at email@example.com.