M&A and investment in the game sector Financing game businesses The traditional model: on creativity and the exploration of working with a publisher different ideas (as specific milestones and design specifications need to For a long time, partnering with a be hit) and the withdrawal of funding publisher was the most common way if milestones are not met, leaving to finance a game. The developer- a developer unable to pay for all publisher duo is one of the core expenditure, particularly payroll. relationships of the industry. While a developer is typically the creative At the heart of the developer- who designs and builds the game, a publisher relationship is the publisher specialises in the broader publishing agreement. Many process of marketing and bringing customary terms have grown up the game to market. around these, and publishers will often have their own ‘house styles’. The key benefits of working with a publisher include development These agreements vary from funding (usually tied to milestones), relatively simple to quite complex. marketing, distribution (both They will typically cover more than physical and digital), and general just development and distribution of advice based on years of industry the game, encompassing issues like experience. Publishers also tend to IP ownership, rights to sequels and support a range of developers from merchandising, royalties and revenue established independent studios share, and termination rights. to smaller start-ups. It’s crucial to clearly identify Publishers will require exclusive which game(s) are subject to the rights to distribution and a share of agreement and the key milestones game revenues. Publisher funding and development timetable is often based on a milestone expected. These should be specified system (ie funds are given when in as much detail as possible to certain development milestones are avoid future disputes (see our met) and this can create issues for Publishing agreements section developers. These include restrictions for more information). 11