CONTRACT KILLER 5: Bad License Terms (Platforms and Porting)
Publishing contacts are as varied as the many different funders and publishers in the industry. However, most publishing contracts will have (at least) one thing in common and that is a clause giving them the rights to publish, market and promote your game across various platforms and territories.
Most publishing licenses are “exclusive”. This gives the publisher the right to be the only person allowed to publish, market and promote your game - this would also exclude the developer from self-publishing. Most publishing licenses are normally limited in the following ways:
- Term: the length of time during which the publisher can promote and sell your game;
- Territory: the countries around the world where the publisher can promote and sell your game; and
- Platform: the formats / distribution channels where the publisher can sell your game e.g. Steam, PlayStation, Switch.
As we saw in Part 4, the duration of a publishing license (Term) and the places in which the publisher is permitted to sell your game (Territory) can have a big impact on what happens to your game. The widest possible license could last for an indefinite amount of time, cover all countries worldwide, and all conceivable games platforms available now and in future.
Platforms and Porting.
Most publishers will want the publishing license to last for as long as possible (Term) and cover as many countries as possible (Territory). Publishers will also want to lock up the rights to as many distribution channels as possible (Platforms).
The rationale for this is so that the publisher can control the marketing for the game across all territories and Platforms. This is fair enough if a publisher is providing you with funding to develop the game for all platforms (e.g. PC, consoles and mobile). In such case it makes sense that the publisher would want the rights to publish the game for those funded platforms.
However, if the publisher is only providing you with funding for the Steam / PC version of the game then you should not be locking up the console, mobile or other non-funded platform rights with that publisher unless they have shown to you that they have specific plans to create a version of the game for those platforms (and that they will be covering the cost of doing so).
Rather than granting the publisher rights over all platforms at the start (especially where a publisher is not funding them) a more developer-friendly approach is for the publisher to have a “right of first refusal” (ROFR) in respect of those platforms.
This means that the publisher does not get the rights to publish the game on those platforms at the start, but they do have “first dibs” to fund and publish ports of the game for those platforms ahead of another publisher or third party.
This is a fair and reasonable approach for both sides since the publisher is given a fair chance to fund those ports at a later date (presumably once they have seen how well the game has sold on PC), and it allows the developer to explore other funding options for developing those ports in the event that the publisher is not interested.
Keys to a good ROFR
While including a ROFR over ports might be a fair and reasonable thing to do a developer should ensure that the publisher’s right to exercise its ROFR is time limited.
For example, if a developer considers that there is a good business case for funding or creating a port of their game then it notifies the publisher of this business case. The publisher should then be given a reasonable amount of time (I would say no more than 30 days) to consider the business case and make a decision on whether it wishes to fund the development of that port. If a publisher has not responded in this 30 day window, or has notified the developer that it does not wish to proceed with funding or publishing those ports, then the developer can look at other funding or publishing options (including self-publishing) for those ports.
Having a time limit in this way keeps both sides honest and means that the publisher cannot unreasonably delay its decision making process that would otherwise prevent the developer from publishing those ports themselves, or with another publisher.
Publishing License Terms: Quick Fixes
- Term 1: Check how long the publishing license lasts for. Does it continue for an indefinite period? If so, consider discussing with your publisher to change this to a defined period of time.
- Term 2: Does the defined Term include an auto-renewal period? If yes, know how the auto-renewal is triggered, how long any extended term lasts for, and when you need provide notice to stop any auto-renewal from taking place.
- Territory: Does the publishing license cover all territories worldwide? If so, it is reasonable to ask your publisher what their marketing strategy is for those territories. For example, given cultural differences you would expect a different approach from the UK/US to China.
- Platform: Does the publishing license cover platforms and distribution channels? Is the publisher providing funding to create ports for these platforms? If not, then consider removing the non-funded platforms from the license.
Thanks for reading. The next installment of Contract Killers will continue looking "Bad License Terms" that developers should snuff out.