[casual_games] RE: negotiation costs

Fri Apr 7 17:03:04 EDT 2006

If and when you do seek counsel, make sure to find someone familiar with the
industry you are in.  Finding a good IP lawyer isn't going to cut it--
you'll spend a lot of time and money educating them about what is and isn't
relevant to the work you do.  Look for counsel that is familiar with game
industry publishing and distribution contracts.  If they already get that,
it's likely they have a solid understanding of IP issues.

Something else to help you save money:  don't have your lawyer mark up the
drafts.  Just have him review them with you before you communicate the
issues to the portal/publisher/distributor.  Then let the portal/etc craft
the actual language to meet your needs.  They'll usually prefer this anyway,
and may even insist.  Lawyers love to rewrite each others copy and they hate
it when someone else does it;  best to just get the points resolved and make
the other side burn the time on drafting the language.  That probably runs
counter to how most folks like to handle their contract negotiations, but I
find it makes things go smoother.

  Kevin

  _____  

From: casual_games-bounces at igda.org [mailto:casual_games-bounces at igda.org]
On Behalf Of Eric Lamendola
Sent: Friday, April 07, 2006 1:49 PM
To: 'IGDA Casual Games SIG Mailing List'
Subject: RE: [casual_games] RE: negotiation costs

One thing to think about,

Be careful what you sign away in IP rights. I can appreciate what some
people have said, as it does "get easier over time" to recognize some pretty
basic legalese.  But for any company or person who is not experienced in
this matter, it is imperative that you get adequate counsel.  You need to
completely understand terms in a contract before signing as you may not be
sure what rights you are potentially granting which could put you (as an IP
holder) in a position where your product cannot be licensed to another
medium (for instance).  Licensing rights are infinitely divisible.  

Find a good IP lawyer - if you have already invested 60K in development, it
really shouldn't be a shock to have to spend a few thousand to ensure your
IP is protected (legal fees, trademarks, etc.).  Especially if you have a
product you intend to build a "brand" out of.

Regards,

Eric

Eric Lamendola

Director of Operations & Business Development

Slingo, Inc.

  _____  

From: casual_games-bounces at igda.org [mailto:casual_games-bounces at igda.org]
On Behalf Of Christopher Natsuume
Sent: Friday, April 07, 2006 2:12 PM
To: 'IGDA Casual Games SIG Mailing List'
Subject: RE: [casual_games] RE: negotiation costs

You will find that the large reputable portals have pretty boiler plate
contracts. Most of these companies release 2-3 games a week or more. They do
not have the time or energy to negotiate each deal out in detail. Instead,
they have a standard agreement that they change a few words in. These are
(in my experience) pretty simple and generally fair in terms of not having
strange loopholes, etc. 

Generally, if you don't understand something in the contracts, ASK. They
should be able to explain the purpose of every clause in the contract to you
*and the reason why they require that protection*. If they do not have a
compelling story for why they need that protection, ask them to remove that
clause entirely. If still in doubt, then have all of your notes and
questions ready, and you should be able to get a lawyer to look at it and
answer your questions in an hour or two.

And if after all of that, the portal insists on some clause that does not
make sense to you, or which you think is unfair, or which your lawyer
objects to, just walk away. If you find 3 or more things in the contract
that you think are abusive, even if they are willing to remove them, you
should probably walk away. The beauty of this industry is that there are a
lot of portals. Most of the large successful ones are run by decent people
who are trying to make honest money. You don't have to work with people you
don't trust, and in fact, you really shouldn't. 

Contracts are not magic, they are simple documents that you can and SHOULD
be able to read and understand yourself. If you don't understand it
personally, you have no business signing it - no matter how many lawyers
have looked it over. Your lawyer is not the one liable - you are. If you are
currently unsure of your ability to read and understand contracts, and are
serious about running a business, take a night class at the community
college. Will cost you less than a trip to a lawyer and be infinitely more
useful. You will see a lot of contracts in the future - you should
understand them as well as anything else about your business.

And Lennard makes a good point - at the end of the day a contract is only a
piece of paper. In times of crisis, you will actually have to *enforce* that
contract, and that's where the real money comes in. So don't think that just
signing a contract solves your legal issues - it won't. You should conserve
your "legal fund" money for actual enforcement, because that's when you're
really going to need it.

Cheers,

Cn

__________________________

Christopher Natsuume

Co-Founder, Boomzap

natsuume at boomzap.com

-----Original Message-----
From: casual_games-bounces at igda.org [mailto:casual_games-bounces at igda.org]
On Behalf Of Lennard Feddersen
Sent: Friday, April 07, 2006 9:53 AM
To: IGDA Casual Games SIG Mailing List
Subject: Re: [casual_games] RE: negotiation costs

Adeo, I come from a traditional game development background where, on 

top of your royalty (10-30% in my experience, give or take, YMMV), you 

get a real advance against royalties when you sign that first check with 

a single publisher.  After Ryan drops his hard earned dough on a lawyer, 

gets the contract wrangled and signs the deal, are you going to cut him 

an advance check that covers those costs and maybe even some of the 

costs of building his amazing game?

I haven't had a hit yet.  Maybe I never will work on a hit casual space 

game.  Got another one in the works though, so hope springs eternal.  My 

experience with portals is that you deal with lots of them, you get 

checks for a few hundred a month (if that, some are falling far short of 

that #) and, realistically, you have no recourse if they decide to 

fiddle the books.  Let's take Tribal Trouble, a pretty successful indie 

game from last year which has actually managed to net 60K (source 

http://www.gameproducer.net/2006/04/...ribal-trouble/ 

<http://www.gameproducer.net/2006/04/06/sales-stats-tribal-trouble/>).  

Few guys worked for a couple years being funded by the govt. of Denmark 

so they could eat while building. the game.  Lets' say they sign with 10 

portals and drop 2K (Ryans low end figure) on each contract.  1/3 of 

their net, at 20K.  Those guys living on a subsistence wage, maybe, are 

now making even less.  Hope they don't have a mortgage, wife or kids.  

Anyhow.  What happens when they think they are getting screwed by a 

portal located on the other side of the world?  How much to get a 

judgement (not to collect, just a judgement), when they have to fly that 

lawyer around to try and figure out what is owed, take the portal to 

court, hopefully prevail (or they are likely on the hook for the portals 

legal costs as well) and then try to collect.  Hope you wrote Zuma.

I saw another developer recently who reported a 2K net after he and his 

team had worked for (as I recall) two years.  How happy would they have 

been when those checks started showing up and they had spent the 

additional 20K on portal contracts?

My advice?  If you want to develop in the casual space then read those 

contracts carefully, drop that first game into the market to see what 

you will actually earn (not what the NYT says you will earn if you have 

written the next Zuma).  You may find that most portals aren't worth 

spending 2K on.  The reality is that, in a cyber world, it is important 

to be able to trust your business partners because the cost of recouping 

lost $ almost always outweighs the actual $ lost. 

I know what I'm talking about.  About 10 years ago I noticed that a game 

that I had written in 1992 was still selling in the bargain bins - about 

4 years after release - and I just couldn't remember getting any royalty 

checks!  I spent the dough on a lawyer.  Got the friend rate, 

thankfully, still dropped a couple K on what I guessed was a community 

service project, didn't really expect to get my $.  Got a 56K judgement 

and they went out of business.  The company was Cyberdreams, the game 

was Darkseed.

My 2 cents, YMMV,

Lennard Feddersen

CEO, Rusty Axe Games, Inc.

www.RustyAxe.com

Lennard at RustyAxe.com

P. 250-635-7623 F. 1-309-422-2466

3521 Dogwood, Terrace, BC, Canada, V8G-4Y7

Adeo Ressi wrote:

> The $2-5K per portal referenced most likely refers to the legal time 

> required to properly review each unique contract.

> 

>  

> 

> Every developer should have a real lawyer review any agreement with a 

> portal, and these agreements tend to differ widely on the terms. A lot 

> of portals have legal clauses that they put in the agreements, but 

> expect to be negotiated out or changed by savvy developers relating to 

> rights, payment terms, and other distribution criteria.

> 

>  

> 

> It should be noted, as others have suggested, that most large portals 

> are now dealing only with a limited number of proven developers 

> directly. It is wiser to focus on making your game amazing than 

> attempting to negotiate expensive portal distribution deals.

> 

>  

> 

> With a couple success stories under your belt as a developer, it 

> should be easier to for you to negotiate. Get a good lawyer.

> 

>  

> 

> 

> Sincerely - **Adeo Ressi **/ CEO / Game Trust

> 

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> 

> **- win $20,000 for your hit game- Casual Game Evolution 

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> 

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> 

>  

> 

>------------------------------------------------------------------------

> 

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