An overview of video game publishing for developers is a must-read article for anyone working on a video game project. Whether you are working with a third-party publisher or on a project yourself, it is essential to understand the costs and duties of each. We will also discuss the costs associated with video game publishing and how to negotiate.
Overview of Video Game Publishing for Developers
1. Duties of a Video Game Publisher
A video game publisher provides funding for the development of a game. Developers do not have the resources to create AAA games and rely on video game publishers to find and recruit development talent. Video game publishers work with in-house staff and external Game Developers to make games. Their role is to manage the business aspect of the gaming industry.
As a video game producer, you oversee the development process from concept to final release. You will manage the budget, contracts, marketing, and production deadlines. As a developer, you will also be responsible for troubleshooting and fixing bugs as the release date approaches.
The video game publisher and developers have the same goal: to bring the game developer’s vision to life. This means managing a team of developers, maintaining the production schedule, and managing the budget.
Video game developers often start their careers working for a game studio as an intern. This will allow them to learn more about the game development process and improve their social skills. As they gain experience, they may decide to pursue their games.
They may even decide to quit their jobs and create their own video game. But that’s not a good choice for everyone. Many developers will be frustrated by the heavy-handed control of game publishers and instead try to work with independent developers instead of going to a video game studio.
2. Costs of Working With a Publisher
AAA games are massively expensive, requiring millions of dollars to develop. In addition, AAA games are often created by teams of more than one hundred people, taking two years to complete the game. The costs associated with creating and publishing AAA games far strip the cost of developing the game. Understanding the costs of working with publishers helps understand how AAA games are made.
Indie games are far more affordable than AAA games. For example, the average AAA game costs $63-72 million, and the most recent indie game, Pokemon Go, is estimated to have cost only around 600K. In contrast, the popular Angry Birds game cost only $140,000 and has become a cult classic. Therefore, the costs of working with a publisher for indie video game developers are primarily based on the game’s popularity.
Development costs involve an initial outlay to compensate developers. This is often in the form of an advance on royalties. It’s a form of work-for-hire, but with some upside. Another critical area of development costs is overhead. If a developer does not want to risk the money spent on development, a publisher can help them reach the right audience. But it does not mean that the publisher will pay for the entire product cost.
3. Costs of Working With a Third-Party Publisher
The costs of working with a third-party publisher are considerable, especially if you’re developing a game yourself. The game can cost millions of dollars, but it’s important to remember that you need to sell as many copies as possible to recoup your costs. In a non-scientific survey of publishers, the average development budget of a new game for next-generation consoles is about $10 million.
Many publishers will advance development costs to developers in the form of milestone payments at predetermined stages or a royalty rate based on net sales revenue. The royalty percentage varies, depending on the industry, but typically ranges from ten to twenty percent. Therefore, if the game is sold more than a certain number of units, it might be more costly to sell the game directly.
In some cases, developers may be able to sell their company to a major publisher, thus becoming the publisher’s in-house developer. However, in such situations, the developer tends to have less control over game design and content since the publisher’s interests align with theirs. Moreover, the publisher may invest less effort into ensuring the game’s decisions enrich the publisher rather than the developer.