ILikesCheese posted...Sheepinator posted...
Publishers employ thousands of developers, and they are virtually the only source of funding for console developers. The majority of contracts will include sales based royalties paid by the pub to the dev. Is this all news to you? Because I thought it was common knowledge.
Royalties for game unit sales paid by publishers to development companies (that they own) are by no means the rule of thumb in the video game industry. It varies by publisher, developer, game and contract.
Sometimes there is a royalty for per game sold, sometimes there is a bonus for a certain level of sales, and sometimes there is simply the fact that the development house won't be dissolved and the programmers all fired.
For example, Activision owned Bizarre Creations. Activision had a contract with BC that if sales reached a certain level on Blur, a $40 million bonus would kick in. However, no such deal was in place for Blood Stone, BC's last game released six months after Blur. Both games sold poorly, and the end result was Activision giving out over 200 pink slips to everyone at BC.
Cue music: "The more you know..."
:D
Yeah, I know all that. Devs working for pubs depend on publisher income for their continued salary and bonuses (usually capped and based on a combination of performance and sales, i.e. not a direct % of sales), and stock options/grants (which will likely go up if company profits are growing). All of these things are hurt by used sales. Studios contracted by publishers to make games will be paid up front via milestones and probably also have some back end in royalties, payable after costs are recouped. They too are hurt by used sales. And as I said publishers are virtually the only source of funding, so if their income and profits are squeezed of course it has a knock on effect.
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My mad face and my happy face are the same.
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