GAME PUBLISHINGLevel 2

David MullichMarketing and MonetizationThe Los Angeles Film School

PATHS TO THE MARKETPLACE

We’re Suddenly MillionairesOur rich Uncle Bim left us $2M (USD)! We can save it

Risk? Reward?

We can invest it Risk? Reward?

We can start a business Risk? Reward?

Let’s Make A Game!

The Four P’s Product Price Promotion Place

The Place

Retail Store (Traditional Publisher)

Digital Distribution (Self-Publishing)

Which Is Better?

Traditional Publishing Advantages Experience Distribution Marketing Financials

Self-Publishing Advantages Brand Development Control Financials

Factors To Consider Do you need funding? Do you have marketing experience? Do you have operations experience?

Now Which Is Better?

Do Your Research! Read Gamasutra daily Follow developer blogs Connect with movers and shakers on

social media Talk to retailers at brick-and-mortar stores Visit industry meet-ups, conventions and

trade shows

GAME PUBLISHERS

What’s The Difference Between A Video Game Studio and Publisher?

Studio vs. Publisher

A game studio developers video games that are marketed and sold by a game publisher.

Game Developer (Studio) Design Programming Art Audio Project Management Testing Business Development (Sales)

Game Publisher Product Development Legal Finance Marketing Sales Quality Assurance Operations Technical Support Customer Service Community Management

Most of All – Publishers are the Bank Have the most money at risk

Cost of developmentCost of marketing Cost of inventory

They reap a most of the rewards.

Publisher Pros and Cons

Pros Keep your equity Money for development Focus on projectCons Likely loss of IP Less flexibility to change direction Funding project, not company

Let’s Say You Decide To Use A PublisherWhat factors would you consider in deciding which publisher to sign with?

Choosing A Publisher Suitability of their portfolio and fanbase Ability to promote and publish your game Working relationship with other developers Number of games they are publishing Publishing articles written by their staff

World-Wide or Country-by-Country Model?World-Wide Strong brand recognition of big publisher Budget for marketing and shelf-space Can finance games at early stages Simplicity of contacts and communication May overlook some territories

World-Wide or Country-by-Country Model?Country-by-Country Larger pool of publishers to choose from More difficult to distribute in US and UK Negotiations happen more quickly Less risk of project being canceled Higher royalty rates More focused marketing campaigns More attention to your game in general

Pitching To A Publisher

Publishers are not interested in ideas.

Publishers are not interested in documents.

Publishers want to see a prototype!

Tips For A Successful Pitch Get In The Door Design The Pitch Assume Their Point Of View Know All The Details Be Organized Rehearse Be Passionate!!! Show You Are Serious Exude Confidence [but not Cockiness] Be Flexible Get Them To Own It Follow Up

Jesse Schell

More Tips Give everyone a role Have your laptop ready to go Have a preloaded video ready Talk about your game, not yourself Talk money honestly

Creating An Emotional Connection

Mad Men: Kodak Pitch For “The Wheel”

Congratulations! Your Pitch Was Successful!

CONTRACT NEGOTIATIONS

Types Of Development Contracts Work for Hire Early Stage Completion Funding Pick-Up Deal

Let’s take a closer look at each!

Work-for-Hire Contracts

Publisher brings the developer a concept, property or franchise and the developer creates the game based on the publisher’s guidelines.

Great for establishing reputation Usually requires a smaller staff Least amount of negotiating power for developer Flat fee, but reliable form of revenue No retained rights to developer

Early Stage Development Deal

Developer pitches a publisher on a game that they want to make and gets funding from the publisher to create the game.

Reserved for teams with solid track record Requires detailed GDD and tech demo Advances against royalties Developer retains certain rights

Completion FundingDeveloper creates a game on its own dime and then at some stage in the development process brings the concept to a publisher that finances the rest of the game.

Good balance of creative freedom and negotiating power

Requires demo showing complete playability and unique selling points

Advances against royalties Developer retains certain rights

Pick Up Deal

Developer completes the game with its own money and then sells the essentially complete game to a publisher.

Gold master date is near Strongest negotiating position for developers Country-by-country or world-wide model Advances against royalties Developer retains most rights

On Publishers

Start at 3:00

Advances Never paid in one lump sum

Too riskyBad for cash flow

Paid out over a series of “milestones”

Milestones Typically paid against “deliverables”

Signed ContractDocuments (GDD, TDD, Schedule)First Playable (Will it work? Will it be fun?)Alpha (feature complete)Beta (asset complete)Gold Master (publisher approved to sell)Source Code & Assets

Milestones Production milestones (such as Alpha and

Beta) are typically defined by:Features: Degree of completenessAssets: Percent finalBugs: Number and severity allowable

Royalty Percentage of every sale Up-front money is an “advance” on future

royalties Advance must be “earned out” before true

royalties are paid

RoyaltyFactors determining royalty:

Number of logos on box Net receipts (deductions for credits and refunds for

return) Additional expenses:

Cost of GoodsInsuranceShippingWitholding taxes from foreign countries

Stupid Developer Trick “I’ll cover all my costs with the advance and

wait for profits when the royalties come.” MOST GAMES NEVER EARN OUT (make

a profit).

Royalty Protection

Ways to protect your royalty: Escalating royalties based on sales Separate royalty for sublicensed distribution Royalty reports with units manufactured,

units sold, and wholesale price Limit copies publisher can give away for free Contract provision for auditing publisher’s

books

Risk vs. Reward

Video Game Developers vs Publishers: Who Wins? (12:33)

Other Contract Provisions Definition of market coverage Minimum marketing budget Developer logo placement Engine and common code rights Ancillary rights Secondary platform and sequel rights

Negotiation Steps

1. Prepare2. Talk3. Offers and Counter-Offers4. Never Do This!

Let’s take a closer look at each!

Step 1: Prepare

Create a negotiation planning document.

Step 2: Talk Strike up a conversation to build rapport Ask about the issues Show some trust to get some in return Face and Honor Societies require far more

nuanced and risky negotiation strategies

Step 3: Offers And Counter-Offers The first person to make an offer, loses. If you are made an offer, take time before

making a counter offer Take lots of notes User counter-offers to triangulate

sensitivities If you need to walk, walk

Step 4: Things You Should NEVER Do Enter a negotiation you’re not willing to walk away from Negotiate one issue at a time Negotiate for the sake of negotiating Make open-ended offer Make an offer you don’t actually like Give up your IP or shares of your company Rescind or modify an offer after it’s been accepted Lie Threaten

Remember

A negotiation is a starting point, not the end game.

The best deal is the one that gives you the most value while also making your counterpart happy.

Group Quest

Put together a pitch for your game.

Prepare a 10-minute demo of your prototype Use a laptop Have back-up materials ready just in case Give everyone a role Rehearse first Be prepared for a Q&A

SELF-PUBLISHING

Indie Development

Extra Credits, Season 6, Episode 21 - So You Want to be an Indie (6:29)

Setting Up Your Business Hire a lawyer to establish it as a legitimate

business. Hire an accountant or business consultant Fund the company, not a game Set goals and deadlines for evaluations Manage by the numbers, not the guts

Building Your Team Pick carefully whose on your team. Fire if you must

Developing Your Game

You can’t make AAA games, but avoid “one-off” games that are too simplistic.

Even with simple games, have Meaningful progress over time Social features Frequent updates

Launching Global

A global launch does not mean just one launch:

Different platforms Different distributors Different languages

Maximize your access points to customers!

Launching Global

World use of languages: English: 4.70% Spanish: 6.15% Mandarin: 14.4%

Don’t forget to localize marketing materials as well as your product!

Going GlobalCountry considerations: No prohibition on advertising or data collection Use standard digital stores Are emerging markets

Examples: Germany Spain Portugal Japan Russia

Managing Your Business Be an entrepreneur Prepare for failure; aim for sustainability After launching, just don’t sit back and

check the bank account Build a long-term relationship with players

Time Until “Independent Sustainability”Kitfox Games: Leaving last job and finding company: 5 months Montreal startup accelerator (at minimum wage): 9 months Financial sustainability (Kickstarter and grant): 3 months

Spryfox Games (11 games total): 3 profitable games 4 break-even games 5 unprofitable games 5 (or 20) unfinished prototypes

Time Until “Independent Sustainability”

What Are Indie Dev’s Biggest Mistakes?

5 Biggest Mistakes Made By Indies1. Lack of product positioning2. Lack of benchmarking for trends and

competitors3. Underestimating the value of media

content4. Inadequate press kits5. Failure to create community buzz

What Do These Mistakes Have In Common?

Forgetting To Do The Marketing!

Doing Your Own Marketing The personal approach can work well The amount of time and effort can add up!

Hire Outside Specialist Freelancers and mini-agencies and big

firms, oh my! Some focus on PR, others on advertising,

or a mix Consider best fit for your budget!

Adding Marketing Person To TeamAdvantages: Press likes to speak directly to team More connected to your mission and

projects Quicker response to communications

Adding Marketing Person To TeamOptions: Bring on a part-timer early on Or give duties to someone on team with

good communications skills Set up a general email account so different

team members can respond

Away Mission

Determine the best way to get your game published. List 3 advantages of traditional publishing List 3 advantages of self-publishing Explain which is better for your game and

why