Is this a good deal? I need some advice moving forward with my game project.

Community Community & Industry Discussion
1

Hi guys, I live in Zambia (Africa) and I’ve been developing my game for the past 7 months, I recently decided to slow down and may even halt development for a few months in order to raise some funds due to luck of proper equipment & money to pay bills,
(I’m using my neighbors keyboard at the moment so I definitely need some new equipment) I posted about this on my twitter a few nights ago and I was contacted another ue4 developer who proposed to help with a bit of funding & to help sell my game for a few things in return,

What his offering me now.
1: To purchase necessary equipment required to complete my game. within a reasonable prices
2: To help get my game on steam greenlit, of course there’s no guarantee that the game will be greenlit but the fact that I live in Zambia means that I can’t even register for the greenlit program even if I have the money to.
3: To share all assets his purchased & and will purchase from the unreal engine market place across all our projects (I don’t know how legal this is)

What he wants me to give him
1: For now he mainly wants me to help him create maps for his first person multi-player game.
2: Finally he wants a long term partnership, where he gets 25% of revenue profits on games I make, and I get 25% of profits on games he makes.

I’m not sure how these partnerships go but 25% sounds like a big number to me especially when I think of how Epic Games only take 5% of revenue for using Unreal Engine.
Frankly the reason I’m even considering this is because living in Zambia makes it really difficult to sell my game on any website because doing anything that involves buying or selling things online is arguably impossible. Banks here will decline any outgoing or incoming electronic payments there’s no paypal either, we do use visa/credit cards but can’t purchase online with them. So having someone who can help me overcome this problem would be useful, I know that partnering with the right people can do a lot of good for any project, so I don’t want to refuse the offer without giving it enough thought, but for sure I have to approach the matter with caution to avoid getting screwed over. So what do you guys think, assuming it’s for real (I don’t have many reasons to believe its not) does it sound like a good or unfair deal?

These are some clips of my game, his project is still in the very early stages development so there isn’t much to show. Thanks in advance for reading through.

2

Hmm, I thing that is not a very good deal, 25% is a lot and you can’t really trust him if you don’t know him, he might never make a game and he will get 25% of your game.
This is just my opinion :slight_smile:

3

Don’t do it, 25% is way to much especially because he states:

That means, all games you will ever develop, you would have to pay him 25% and there is no way of knowing if he will ever make a game and if he does if he will pay you.

For a mouse and keyboard, you don’t have to get a $50 mouse and a $100 keyboard of some popular brand, a lot of stores from China sell cheap but good quality products, although you would have to use Paypal for this.

4

Salutations I create art,

I have seen your work and have been so impressed that I put it on my show twice.
What I mean by this is I think you are too good of a developer to risk such a wide open contract.
He says you’ll get 25% of his future games, but if he amounts to nothing then it is worthless.

If you do agree to a revenue share it should not be for all future games, just for the current one.
Maybe counter offer that he gets 5% (or less) of Save Our Souls only.

5

Get a full and final concept of the game and then raise some funds, whats so hard about that?
You may as well post it into the Work in Progress forum next time, if not done already :wink:

6

I’m going to answer this from the perspective of having given and taken investment for projects. So for all intents and purposes consider me a potential investor and this would be the advice I’d give for context.

So, a lot of thing hinges on what constitutes reasonable equipment purchase. If it’s say, a decent computer($700-$1000~), peripherals, and the licenses required to legally release the game(like as an example, a legit maya license if that’s what you used), then that’s a non-trivial amount of cash.

25% as a percentage is almost irrelevant, if anything I think it’s a bad deal for him. He is putting up the cash, and the naked truth is that in a business venture cash is king. Cash is significantly more valuable than time, so the person putting up most or all the cash is the dominant partner in a business relationship, most competent VCs in this situation, assuming they even agreed, would ask for more than 50%.

Don’t get bogged down by “it sounds like a big number”, because the reality is he’s the one assuming the largest risks. Even if he’s 100% honest, you guys work on this game and release it, there’s a nontrivial it doesn’t sell well and you guys both lost time, but only he lost significant amounts of cash, therefore he’s assuming more risk than you are and 25% is “fair”.

We have this common conception that time=money but that’s just not how the world actually operates. Cash can always be converted into other people’s time, and sometimes as a force multiplier depending on if your earnings are above or below symmetry with your needs(i.e. I earn say 100$/h and can then pay 4 people $25/h to accomplish more than I could alone). Whereas time can convert to money, but often doesn’t, and even then we often significantly misestimate how much time we spend earning money, the relationship is asymmetric and cash is always > time in similar proportions.

What I’m saying, is ignore 25%, it’s meaningless, it could be 25% of $100 after everything is said and done. Instead focus on what the relationship brings to the table, and how you would otherwise have to accomplish that goal without that assistance, and whether you even can within a reasonable period of time.

If the answer is yes, you net benefit from that assistance, 25% is not unfair in this circumstance(for one project), and you should consider it.

If you decide to move forward, what’s significantly more important is making sure you come to a firm understanding of your roles, and draw up an appropriate contract before you do anything.

7

I agree with VFe - if anything, his initial equipment investment is much more risky. The highest probability outcome is that he invests in your equipment, and receives nothing in return. ( I am not being critical of your ability or capability - just that most indie games die without seeing the light of day)

To elaborate further, assume a $2500 equipment investment.

after 1 year
if the game makes 0, he receives 0.
if the game makes $1000, he receives $250 (loss)
if the makes $10000, he recieves $2500 (loss due to time value of money)
if the game makes $20000, he receives $5000 ( a 100% annual return)

If you take the expected rate of return of his investment, it is rather risky no matter how good it is.

So my advice is take the investment - the only unfavorable outcome for you is if the game makes +$20k. And in that case, even if you pay him 25%, you still get a lot of money.

Seems like a no-brainer to me

8

25% of your current game is not unreasonable, as long as the invested money is non-trivial.

Promising 25% of any future games is another matter. I’m not even sure that is legally enforceable.

I suggest you come to an agreement regarding yours and his current games. If everything works out you can then extend your cooperation later.

9

I agree, even a multigame deal might not be a bad deal, as long as there’s a defined end to the relationship which they negotiate beforehand rather than an uneforceable open ended deal.

10

Thanks for the advice guys, reading through the comments maybe 25% for my current title isn’t as bad as I think, as long as I have control over the money in the account(s) he sets up for my game it may work out well. Going through the discussion again 1 part I think I probably misunderstood is I thought he said per game we make, but it’s actually per game he helps me with, and per game I help him with, Which means I don’t have to pay for games he does’t assist me with and vise versa. A well defined contract definitely necessary.

Finally I think whether or not I take the deal will probably depend on how much his willing to invest for this title in return for the 25% because it wouldn’t be fair to give a large share for a small investment, or a small share for a large investment.

11

This is a bad deal, even for a single project. For 25% of the revenue, I would expect that this person would be putting in at least 25% of the capital required to make the game (in other words, he should be paying for a part of your development costs).

As far as I’m aware, Barclays bank operate in Zambia - you should be able to get a Visa Debit card through them so long as you have an income. They also do business accounts (e.g. for when it becomes time to sell your game).

12

You need to quantify what he is offering, and what you are prepared to offer in return. The wording is all far too vague to be able to come to any reasonable evaluation of it’s worth.

13

You need to really think what is worth it more to you, as much profit as possible but taking the game longer to make, or abit less profit and some help on your project that sounds like you need.

14

At the moment I’m trying to find out exactly how much his willing to offer in terms of funding, I’m waiting for a reply.

I’ve finally manage to find a work around for the problem I’ve been having getting registered for steam greenlit, it’s a bit complicated but I’m finally able to add funds to my steam account which means I’ll be able to sell the game myself if it gets greenlit.

16

Send this to epic asking for a im pretty sure they are still giving those out to developers needing funding.

17

25% is not a bad deal at all. You have to take into consideration that bringing the game onto Steam and giving it the proper marketing will likely generate some costs. Being successful on Steam doesn’t come automatically with a good game - i know quite a few games that are pretty decent, have good reviews, but less than 200 reviews in a year.

In addition to that it is all about the corporate setup behind the game. For example i could offer you 25% as well but get you 25% MORE out of Steam if you live in the US or Europe because of the company structure. In both continents you’ll be taxed for the revenue generated on Steam by more than 25%. If a game generates 100.000$ on Steam you can end up with 34000$.

One example
100.000$ - 35.000$ SteamShare, 5% () DoubleTaxation kept by Steam = 61.750$
61.750 - 25% Corporate Tax (or higher in all European countries) = 46.312$
46.312 - 25% Private Income Tax (again, this is a low rate, e.g. germany has 40%) = 34.734$
() For countries the US does not have a double taxation treaty Steam will keep another 20%.

This simple example that doesn’t even consider VAT into account, so having a strong partner who knows how to keep that number Steam transfers to the bank account close to those 60.000$ will save you alot of money. Of course you can setup everything yourself if you are familiar with taxes but again, you’ll be spending time flying to different countries and setting up bank accounts and companies, which will cost you some money - plus, if you don’t know what you doing your government might not accept the company setup and refuses your tax model.

If he covers that plus has strong marketing i’ll say take the offer, you’ll have a partner who will focus on selling the product so you can focus on making it. Especially when you miss funding and someone can bring some money to the table things get easier, but it’s important that you can trust him.

18

25% is huge when you havent even gone to market and seen whos going to pick you up…
from the vision of what you got… im sure some major player will… due to lack of funding or access you have…

what hes offering isnt huge in sense but things that you need could be potential free for him… so whats he losing
and even though not for you… how much WORK are you actually doing… vs him… (i say this cause i havent spoke or worked with both of you)

its a hard deal… a trust thing

really its down to what you feel cause unless you get this all in writing and signed it dont mean ****…

hope it goes well game looks amazing, sorry your country has such blocks with rest of world… Great talent being held back boooo…

19

Hey, thanks for pinging me for my 2 cents. The 25% is a solid amount to give up, so make sure that the specifics of the contract are air-tight. You want to make sure you’re getting as much as you’re giving.

The benefits here are pretty good, especially due to the physical location issue. If this person is a very active developer on their own, then the 25% may work in your favor even. Not knowing who this individual is, I can’t say if it’s good or bad, this is really about trust and all that.

Also, if you’re in the same studio you can share marketplace assets, so that’s fine.

You may want to try raising just a little money for what you need and see if that is enough.

20

Thanks a lot for the advice. After discussing everything, the deal doesn’t offer much in terms of funding, it’s an amount I wouldn’t fail to raise in a month or 2. The advantage would be with help selling the game due to my physical location, and also sharing of market place assets if we are under the same studio name, but we are negotiating the percentage. Before I decide, I’m trying to find out what the other barriers and issues I would in counter if I decided to sell the game myself, and how accepting the deal would help me deal with those issues.

Thanks again for all the advice.

21

You don’t need to worry too much about the selling side of it until you’re nearly ready to sell :slight_smile: