CO1301 Games Concepts Week 6 Sales Contracts A Primer

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CO1301 - Games ConceptsWeek 6Sales Contracts -
A Primer Design Development Summary

• Laurent Noel Gareth Bellaby

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On the Shelf

• A typical game will retail at around 35.
• Who gets this money?
• The developer
• The publisher
• The retailer / distributor
• The government
• We will look at how this money is divided up.
• We will also look at the contracts involved.

34.99!
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Game Sales Who gets What?

• This is a simplistic breakdown of a typical game
  sale.
• Two points are immediately clear
• The retailer takes the largest slice of the
  money.
• The game developer takes the smallest slice (the
  red slice).
• Next, we will look in more detail at this
  breakdown.

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Tax and Retail

• In the UK,17.5 of the game price is paid to the
  government in Value Added Tax. This amount is
  ignored in the remaining calculations.
• So the effective price of the game is 28.88.
• Many other territories have a similar tax.
• The game publisher will negotiate a contract with
  the retailers (and distributors) to divide up the
  remaining money.
• Here, we have assumed a near 5050 split, which
  is fairly typical.
• However, there is a wide range of possibilities.

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Developer Royalties

• So in this example, the publisher will receive
  14.44 after tax and retail costs.
• Now the game developer will be paid some of this
  money as royalties for writing the game.
• The royalty percentage can range from 15 to 50.
• It depends mainly on the developers track
  record.
• In this example the developer is paid 30
  royalties. This is 30 x 14.44 4.33 for each
  game sold.

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Advance Royalties

• Advance royalty example
• Developer is paid 500,000 in advance.
• Developer should receive 4.33 per unit.
• So there will be no royalties until there are
  500,000 / 4.33 115,473 sales.
• We will call this the break-even point.

• Developers often get money from the publishers
  before the game is sold.
• These are advance royalties.
• When the game goes on sale, the developer gets no
  royalties until the publisher has recouped this
  money.
• So developers get no royalties until a certain
  number of sales is reached.

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Advance Royalties 2

• The majority of games do not reach the break-even
  point.
• However, advance royalties are rarely paid back
  to the publisher, even if
• The game doesnt reach the break-even point (the
  publisher doesnt recover the advance royalties).
• The game is cancelled (canned) by the
  publisher.
• This insulates developers from the
  unpredictability of the games market.
• Publishers publish a large number of games to
  protect themselves. The minority of games that
  break-even will pay for those that dont.

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Sales Examples

• Sample sales figures using our example

• Note that the publisher only has a negative
  income when the sales fall far short of the
  break-even point.

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Implications for Employees

• The figures in the previous table are before
  costs. They do not tell us if the developer or
  publisher are making a profit.
• In general, developers make a profit if they
  exceed their break-even points.
• If you are paid bonuses as an employee, you can
  only realistically expect them to be large if the
  break-even point is far exceeded.
• But check your contract and with also with
  management, dont assume.
• To get an estimate of the advance royalties
  Total staff salaries for the project x 2

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Implications for Job-hunting

• Games development companies are stable
  environments so long as they have publisher
  contracts.
• They are not directly affected by having low
  sales figures, although it will make future
  contracts harder to come by.
• Look for games companies with several games in
  progress. Be careful with very small companies.
• Try to join at the beginning of a new project
  rather than at the end of an existing one.

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The Games Industry

• Reality Check
• Game Development ! Game Playing
• Games are developed and designed by a team.
• Hard work but the rewards are there.
• But
• Rewarding, exciting, varied, relaxed, and all
  about games

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Design Development Summary
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Game Design

• Designs go through several stages
• Proposal/Pitch to Game Design Document
• First drafts must capture interest
• Detail is not important
• Excitement, intrigue, and marketing is
• Later designs must be comprehensive
• Otherwise expect unforeseen problems
• But dont forget the fun

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Game Development

• Roles

Programmers Artists Designers
Management, Testers, Musicians etc.

• 18 months of team working like a film
• Publisher provides funding
• Developer must satisfy publisher
• Royalties (bonuses?) if game sells well

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Programming

• Games are large and complex programs
• Programming Tasks
• 3D Engine
• Game logic
• Tools and technology
• Also, physics, networking etc.
• Consider programming at design time
• Code reuse is good, but so is innovation
• Strike a balance
• Expect trouble when you first reach program
  testing

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Artwork

• 3D artwork is half-sculpture, half-architectural
  drawing
• It is highly skilled, dont expect to be able to
  do much yourself
• But do try to understand the processes
• It will make you more productive in a team
• Programming, art and design meet during
• Game design
• Level creation
• Testing

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TL-Engine

• A simple, but realistic environment
• You should know about
• Initialisation and the game loop
• Loading and creating models
• Controlling models and cameras
• Parenting and nodes
• Basic collision detection

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Learning and Teaching

• Lectures give you key information.
• Practicals allow you to apply the information.
• Play allow you to see what happens if...

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Or to put it another way...

• Lectures are easy to forget.
• Practicals let you learn.
• Play and you will master programming.