Game development Publishing agreements Financing downloadable content (DLC)) should also be agreed in the Apart from actually publishing the publisher agreement. game, the main thing that publishers typically have to offer developers is How revenue is shared is crucial cash. If the game isn’t finished, this and the percentage split, whether may include funding its development, payments are based on gross or net as well as a fee for the rights granted income and whether they can include in the game and other significant marketing costs, manufacturing expenses. Once released, the costs, taxes, or other expenses borne developer and publisher will both by the publisher, are often the focal benefit from a revenue share, but point of negotiations. before this kicks in, the publisher Developers may insist on an audit generally provides an advance, clause to allow them to verify the which is then recouped from future publisher’s reported sales revenue before such profit-sharing and revenues. begins. Where an advance is provided, the publisher will then Development have skin in the game and may wish to insist on additional control If a game is still in development, or over the game’s development and even where development hasn’t exploitation to ensure it is a success. yet begun, the advance may go towards funding such development. Profit-sharing is typically structured A publisher in this position will expect on a tiered basis so that, as sales to see progress at pace and should increase, the revenue-share shifts in insist on the inclusion of development favour of the developer, reflecting milestones in the agreement, with the priority given to the publisher’s certain specifications being met investment in the game. Whether and by certain dates. how much each party gets to share in other potential income streams Failing to meet these milestones can (such as in-game purchases and lead to financial penalties (affecting either advance payments or future 39