Independent developers rejecting half a million dollars provoke talks about hostile publishing contracts

Independent developers rejecting half a million dollars provoke talks about hostile publishing contracts

Rejecting half a million dollars, regardless of the context, is a pretty big deal. Freelance developer Jakefriend, creator of magical adventures Scrabdackle, he knew this when he turned down a game publisher's offer, but claims that the contract provided to him was "exploitative" and contained "incomplete" penalties for breach of contract, leaving the publisher with a much lower risk.

The thoughts of Jakefriend, published in Twitter, started a conversation on social media about the nature of the contracts that independent developers often come across when they desperately try to get funding for their projects.

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Jakefriend, who publicly rejected the publisher's name, explained that if a generally ambiguous breach of contract was found, the contract allowed the publisher to maintain the rights to the game's IP. The publisher would also be given all the rights to sell the game and Jakefriend would lose his royalties, effectively giving the publisher 100% of the revenue.

Jakefriend also said the contract would require him to pay all the upfront money given to him and, incredibly, that the publisher could take control of the game's production and finish the development at Jakefriend's personal expense. and no limit to how much they could charge.

“So, here I am, a 30-year-old solo developer, facing a consequence where if they take the game out of me I’m also * in debt *,” Jakefriend tweeted. "The debt would be between 1/4 and 1/2 half a million dollars and no option to earn extra income. Probably the funds I had already received would be spent on the cost of living, and I … don't * have * money so, you know, so if that happens, I'm in debt, * forever *. "

As Tyler Wilde of PC Gamer explored in his piece what does a "good" and "bad" standalone game publishing contract look like, a "good" contract will normally (though not always) allow the developer to retain intellectual property rights and assign an average advance of about 318,000 dollars (depending on numerous factors) on a number of milestones, such as presenting an alpha version of the game. The revenue share would also be 60/40 in favor of the publisher until the advance was recovered, at which point the division would return to 60/40 in favor of the developer.

Jakefriend explains that the contract presented to him included a 100/0 division in favor of the publisher until the game sold about 24,000 copies and earned about $ 250,000. Nor would the contract require the publisher to pay the developer its share of revenue up to "30 days after the end of the quarter," which could take four months.

If Jakefriend wanted to allege that the publisher paid him little, the publisher has no legal obligation to pay any penalty fees, only what is legally due and any audit would come from the developer’s funds. Other details Jakefriend pointed out include allowing the publisher to implement in-game ads at the developer's expense and establishing that global sales taxes are the sole responsibility of the developer.

“When I expressed big concerns about the contract, they were surprised,” Jakefriend said. "Like, very honestly surprised. Again, I don't think they * meant * harming or exploiting. But predatory behavior has normalized in the industry. I guess it doesn't stand out anymore."

Obviously, since the publisher is unknown, we're just looking at it through Jakefriend's eyes. Lawyer and legal commentator Richard Hoeg says that, assuming everything Jakefriend shares is accurate, "I usually agree with this return. i the loss of rights goes too far. Often, if there is a rescission, I would seek a refund or loss of rights. They get their money back for your infraction, but if they take your game from you, that “debt” is paid only with the income.

However, Hoeg disagrees with Jakefriends' claim that there is no risk for a publisher to extend the return on their capital. Hoeg adds that each contract would benefit all parties by ideally establishing incredibly clear quantifiable metrics for both financial obligations and marketing.

Hoeg agreed that the contract is "aggressive," but "probably not as bad as the one portrayed."

Jakefriend’s tweets triggered some development colleagues of varying importance with their own experience with hostile contracts.

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"I was once asked to sign an NDA granting the company permission to" conduct regular searches of your premises to ensure compliance at any time for a period of five years. "I did not sign it," he said. Paul Ehreth, chief designer of Remedy & # 39; s Control and former developer of Halo.

"The publisher would own 50% of the intellectual property rights and I would keep the rest, but if I ever decided to 'stop working with the company,' they would keep my 50%," he added. independent developer Ben Cross, founder of Heartstrings Studios. "I contacted a contractor lawyer and set out my concerns. He came back a few days later and explained it to me." As this is written, if you ever decide to publish a game on your own or work with another publisher, I would sign all rights over your IP. "

Even Jonathan Blow, the creator of Indian arms Braid and The Witness, had something to say.

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“The reason these contracts exist is because there are so many Indians who hurt businesses and sign them,” Blow said. "That said, 'we're surprised you don't sign these terms' it's a lie. They know the degree of ailment of the terms, they're just making a fool of themselves because most Indians, who present that answer, sign."

Regardless, as companies like Epic Games and other publishers make moves in the publishing space, it’s always advisable to have a lawyer on hand (if you can afford it).

Thanks, Kotaku.

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