CONTRACT KILLER 6: Bad License Terms (Future Games and Other Rights)
In Parts 4 and 5 of this Contract Killers series we looked at those provisions of a publishing agreement that give the publisher the permission to sell your game, how long that permission lasts and how wide the permission is. This has all been in the context of the publisher wanting to sell your game on as many platforms as possible, in as many countries as possible, and for as long as possible.
However, in reality a publishing license is likely to extend to other things beyond your game. For example, many publishing contracts will also grant the publisher rights over merchandise (in particular a game's soundtrack). Depending on the breadth of the publishing license it might also allow the publisher to fund and sell any future games that you might make in the same franchise or universe.
Exclusive – adjective – limited to only one person or group of people.
Without laboring a point covered in Parts 4 and 5 - most publishing licenses are “exclusive”. This gives the publisher the right to be the only party with the rights to publish, market and promote your game - this also excludes the developer.
It goes without saying that if an exclusive license can exclude the developer from taking certain actions then the license terms must be looked at closely to see how broad they are. If you are concerned that a publishing license is overreaching then it is not unreasonable to raise this with the publisher before you sign the contract. The publisher should be able to justify to you exactly how they plan to use the rights you a giving them.
Below are some additional things to check regarding the scope of the publishing license:
1. Sequels, prequels and spin-offs or other future games
Check if the publishing license extends to other games that you might develop in future. These could be in the same game franchise, be set in the same universe, or feature the same characters.
Unless the publisher has a plan and is agreeing to fund these future games in the current contract there is no reason why they should be locking up those rights as this prevents you from making sequels, prequels or spin-offs from the initial game.
If a publisher wants to lock down future games, or thinks that the game might turn into a franchise, then are a couple of developer-friendly ways to handle this:
- Right of First Refusal. To recap – a “right of first refusal” does not give the publisher rights to these future games outright but it does given them an opportunity to be first in line to fund and publish them if they want. Check out Part 5 of Contract Killers for my “Keys to a good ROFR” for more details on these.
- Option to Acquire the Game IP. Some larger indie publishers may include an option to acquire your game IP so that they can control the franchise and create future games. Similarly to the “right of first refusal” described above, this option is likely to be framed as a way of ensuring that the publisher is first in line should you wish to sell the game IP. Alternative it may give the publisher the ability to start negotiations with you during the term of the publishing agreement.
Neither of the above should last beyond the term of the publishing agreement, and including a time limit on the period of the negotiations keeps both sides honest – and prevents those negotiations from dragging on indefinitely.
2. Other restrictions on developing future games
Check if the contract includes other restrictions that might prevent you from developing or releasing future projects either indefinitely or for a limited time. An example would include the restriction below from Raw Fury’s publishing contract.
This restriction prevents a developer from putting out a similar type of project to the game that the publisher has licensed:
This restrictions is aimed to protecting the publisher’s investment in you and your game, and to prevent you from releasing a similar game in the 12 months following the launch of the game that the publisher has licensed from you. Failure to comply with this clause would normally be a breach of the publishing agreement – and that could with financial consequences (as is the case in the Raw Fury contract).
3. Other Rights – Merchandise, Soundtracks and Film/TV Rights
Check what the publishing license actually attaches to. In some cases the definition of “Game” might also refer to “merchandise”. For example, Raw Fury’s contract refers to "Ancillary Products" which, along with the game, are subject to the exclusive publishing license.
In some cases you might be fine with these rights being in the publisher’s hands. However, in each case you should understand what the publisher plans to do with these rights, and how you will be paid.
If you have already signed deals with companies to create and sell merch then you might need to remove these rights from the publishing license to ensure you are not in breach of any previously signed deals.
Check whether the scope of "Ancillary Products" includes Film/TV rights relating to your game. Does the publisher have any plans to use these? If not, remove them. The publisher can always ask for a “right of first refusal” if they don’t have a plan to use them right away.
4. Shutting out your community.
As mentioned above, an exclusive publishing license will prevent a developer from marketing or using the rights from its game – since these rights are granted to the publisher. This could prevent you from engaging with your community.
You should carve out the ability to promote the game to your own community via your existing social media channels. In some cases the publisher may want to have approval over any posts, work-in-progress gifs or other similar content. If this is the case then make sure that they cannot withhold their approvals without good reason.
Thanks for reading. Read Part 7 of Contract Killers next week!
Please post any questions in the comments below, or feel free to send me a DM on social media.