(Mid-week Meat) Contract from the Bottom Up
Most attorneys do things opposite. For instance, I’m greatly in favor of reading a contract (player/company, developer/potential-publisher) from the bottom up. So the next couple of weeks, I’m going to focus on a common theme of the bottom of those contracts: Locality; Globality; and Longevity. Today, an introduction into Longevity as regarding Developer Contracts.You would think the length of the contract would be important enough to put near the top of the contract. It’s an essential part of the agreement. If you’re approaching a publisher about a deal for your game, or your storyboard idea of a game; it’s a good idea to get their commitment to you as long as possible, and your commitment to them as short as possible. You might think they have the leverage, but that would be incorrect.
You have only one game to push; while they have hundreds to pursue. Therefore you MUST go in trying to get a long-term commitment from a publisher if they are to “lock you in” to working with them. What they lose from a long-term commitment on their part is neglible (just a little time and some opportunity costs from pursuing/building/marketing other games besides yours), but what you lose is GREAT… any opportunity to sign the game with another publisher, any chance to market/publicize the game in ways other than approved by the publisher, basically any chance to do anything with the game other than just wait, wait, wait for the marketing department to set up a schedule or push any advertising towards propelling your product forward. For your Longevity portion of the contract, make certain to have “opt-out” clauses at any particular “milestone” in the project. If they have a hammer, MAKE SURE you have a hammer too.
Sorry if this seems a little basic to some of the more experienced developers out there, but for many people eager to get that “first game” accepted by a major publisher, they are afraid to negotiate….. EVERYTHING IS NEGOTIABLE.
Jay Moffitt is a Tennessee attorney. This blog is for entertainment and educational purposes only and does not consitute legal advice or create an attorney/client relationship. Jay Moffitt is not certified as a specialist in this area by Tennessee and Tennessee does not certify specialists in this practice area. All comments will be answered promptly and courteously as long as they are germane to the discussion and do not contain specific game names or incidents.
Tags: Contracts, Developers Contracts, Developers Corner, Game Development, Interpreting contracts, Longevity, Steps in Game Development
Contract negotiation is a scary thing for inexperienced businesspeople. You really need to know what your strengths are in order to get a good deal. Don’t rely on the publisher to give you a good deal; their job is to make sure they get the best deal possible, and if that means bankrupting your studio after the game is done it doesn’t matter in the slightest.
If you don’t have a big track record, it can be hard to get any concessions. Even if you make one of the biggest selling games of all time, the publisher still may not care about you (as witnessed by the Infinity Ward blow-up). The ultimate truth is that you have to be willing to walk away from a deal in order to negotiate. When it’s your first “big break”, it can be hard to get up an walk out if the deal isn’t favorable. And, even if you do, you might be plagued by “what ifs” for a long time afterwards.
One big bit of advice for people who aren’t great contract negotiators: get a lawyer experienced with transactional (contract) work by your side. When we were buying Meridian 59 from 3DO, they kept dragging their feet. It was our lawyer that finally got fed up and re-started the stalled talks. An experienced lawyer will know what is standard and when people are jerking you around. Watch out, though, some unscrupulous people will tell you it’s not necessary to have a lawyer around while you talk. Getting a lawyer to work with you will be a huge benefit in the long run. (And, I’m not just saying that because our gracious host is a lawyer.