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I am working at a small game studio developing games for iOS and Android. We do the full journey here, from idea to finished product and we have funding to do so. However, with the smartphone market being a bit of a lottery for small developers we are looking into getting into a publisher deal.

What I am wondering now is what kind of different deals one could look at. From what I have gathered from reading a number of articles a common model it is that the publisher pay for the development cost and once the game is released the developer gets about 20% of the revenue. What I am wondering is if there are any other common models used between developers and publishers?

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In general nature of the Developer-Publisher relationship, it is true that the developer will make the game at a loss to themselves and then receive compensation from the publisher. 20% of the revenue however seems first fairly high to me, and second it is -very- easy to show how very little 'revenue' is being generated by something to make this kind of agreement even more frustrating. You may want to consider alternates that are more tangible or lump sum payments for completion (given), target sales ranges, completion dates met, etc. Also, depending on how long your development cycles are, you might want to negotiate milestone deliverables and payment schedule, so its not an all or nothing sort of deal. Split the development cycle into 3 substantial collections of functionality and upon completing terms of the each deliverable you would receive partial payments towards the development costs.

Another large thing to be aware of, almost every publisher -will- require you to give them ownership of any IP they are publishing, regardless of who came up with the idea. Make sure the terms in that area are well understood by all parties.

Hope this helps.

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did you actually mean to say this? "the developer will make the game at a loss to themselves and then receive compensation from the developer" – ultifinitus Mar 30 '11 at 17:00
@ultifinitus Yes. What this means is that if it costs you more to finish the game than you contracted with the publisher for, you will eat those losses as well. – James Mar 30 '11 at 19:04
I had assumed you meant to substitute the second "developer" with "publisher" – ultifinitus Mar 30 '11 at 19:30
Oh, LOL Yes I had, I will edit that in there correctly now.. Apologies :) – James Mar 30 '11 at 19:38
Thanks for your answer James! – Annica Apr 7 '11 at 14:31

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