Publishers are often seen as villains in the industry but it’s not often as simple as that. Phil Nachum looks at the relationship between them and developers
Publisher-developer relationships are always a touchy subject. There are a lot of conflicting views as to who deserves which rights and how the balance of power and profit should be divided between the two parties.
Amid the ongoing litigation between Activision and ex-Infinity Ward staff, details have emerged in the LA Times regarding Activision’s contract with Halo developer Bungie. The contract lays out the terms for the development of a new project called Destiny. It specifies that Bungie is entitled to royalties ranging from 20-35 percent of operating income, which is the revenue left over after development, production and marketing have been paid for.
This brings up the question of how profit should be divided among the publisher and developer. On the one hand, developers were already paid during the process of development. However, in an interview with Ars Technica, developer Simon Roth explained that many games continue to make money after release, all of which goes only to the publisher.
Roth explained, “Many companies do offer limited profit sharing to current employees, but true residual royalties are few and far between. Only senior management positions and celebrity voice talent seem to be offered anything worthwhile in that regard.” While a renowned and financially proven developer like Bungie may have more bargaining power, too many other studios don’t. Roth believes “that everyone should get a slice of the ever growing pie.”
There are other means of negotiating royalties. In the Bungie-Activision contract, the developer would receive $2.5m a year in bonuses between 2010 and 2013 for meeting quality and budget milestones, and another $2.5m if the first game receives at least a 90 out of 100 on GameRankings.com. Using aggregate scores to determine bonus payments isn’t uncommon. Recently, Fallout: New Vegas developer Obsidian was denied its bonus because the game’s 84 Metacritic score was just one point shy of the 85 needed.
GiantBomb’s Jeff Gertsmann told MTV Multiplayer that he’s ”gotten e-mails from developers over the years who have said, ‘I don’t think you realize what you’re doing to me with this review’ because my review knocked them out of the range of some bonus that they were up for.”
Insomniac Games president Ted Price also weighed in. He said, “I don’t think that’s the right way to have a relationship with a publisher. The relationship needs to be based on trust that each party is doing the best it can and open communication to ensure that during the process both parties are doing their part.”
InXile president Brian Fargo has been particularly vocal about the matter, especially after bypassing publishers altogether and raising more than $3m on Kickstarter to develop Wasteland 2. He said, “You would not believe the stories you hear about how developers are treated by publishers these days. It is abysmal. There is so much that the publishers do that the developers get negatively affected by. As a developer, it’s frustrating.”
He believes that trust is a major issue, adding that publishers “question every decision you make, they’re on you every second. They withhold money in order to make you bend to their will – it’s a very distrusting experience.”
Other noteworthy developers aren’t as negative. Double Fine founder Tim Schafer, who also raised money on Kickstarter, is more forgiving. He said, “They’re risking millions of dollars so they’ve got to mitigate that risk – and sometimes that means removing risky ideas from games…They’re not evil, they’re just trying to protect themselves.”
Similarly, Beenox boss Dee Brown defended the oft-criticized Activision and told GamesIndustry International that the publisher “has always treated us as partners, rather than something to be controlled. They’ve been, from a creative standpoint, really, really great. When I look at Shattered Dimensions, what we were asked for at the time was ‘Please make a Spider-Man game.’ That was the creative direction that Activision gave us.”
With so many conflicting opinions, it’s likely that developers’ relationships can vary from publisher to publisher. Luckily, alternative avenues like Kickstarter and indie platforms exist to remove some of the dependence on them.
Follow Phil on Twitter: @philpee2