For Publishers or other investment groups what is a general industry standard on return? I have been looking into this and cannot find any financial information regarding what financial gain is expected.
I can’t say I have any experience/knowledge in regards to this, but I’d say it would greatly depend upon many things - potential of the product, investment of the publisher, number of platforms, developer demands and so on. You’d really have to touch base with a publisher to get a realistic idea. From memory, if you self publish on Steam, steam takes 30% of the Gross (I think), so that may be indicative?
Investors? They want something like 10x profits over what they invest…
Publishers will eat 30%~60% of what you earn; if they fund your development process instead of simply publishing, they prolly will own your IP and you start to receive anything only after they get back invested capital.
Say a publisher pays you 200k to help develop your game; IP on contract you are giving it away for the moneis and you earn your first $1 buck after your game have sold $200.001
As indie, the best someone can do is forget about investment, really; too hard to have it.
I don’t believe it’s indicative of anything, really. A traditional relationship with a publisher is going to involve them taking on responsibility for promoting the published game. They’ll typically invest money in getting the game to sell better and, as a result, will take a larger piece of the pie than services like Steam Greenlight, the Apple App Store, and the like, which are really little more than online distribution channels. While Steam or Apple might feature your app and give you some visibility, they have no obligation to and no real vested interest in making your game sell better than any other game. A publisher who takes your game on will - they’ll advertise, get you shelf space in stores, etc. It’s a very different situation than Steam Greenlight et al.
I think most publishing contracts are negotiated and the details typically kept private, but I’d be surprised if you’d get more than 50% of gross, and generally would expect you’d get less. The deal may be structured in any number of ways. Publishers may, for example, get “first money out” for their advertising expenses. Your cut may also be calculated based on net rather than gross (which you should avoid if possible, since the publisher typically gets to decide what expenses get taken into account for “net”). On the plus side, it’s not unheard of for publishers to pay some money up front, or help with some expenses. The better known your studio and franchise, the better the deal you’re likely to get. First game from a small studio? Don’t expect a great deal if you can even get a publisher interested.
Still, if you can get a publisher interested, it may be worth using them because you will probably sell more copies. But have a lawyer review any contract before you sign and run some scenarios using the contract terms to figure out how many more copies you’d have to sell to make more money. In the days of boxed software on shelves, publishers were really important. I honestly don’t know how important they are today.
Thanks for the replies. It gives me a better understanding on what to go in with. A friend is setting me up with a business associate who has been looking to expand his investments. I needed to know what were ballpark areas of investment to have a better position for my negotiations.