Feature: 'Game Law - Development Contracts And 'New' Revenue Streams'

In his latest Gamasutra column, game lawyer Tom Buscaglia discusses the art of the game development contract, particularly focusing on making sure the developer share
In this Gamasutra-exclusive feature, industry attorney Tom Buscaglia calls out the disparity between developers who "just want to make great games," and publishers who "just want to make money" -- unfortunately, Buscaglia says, it's a situation that happens all too often. And when it occurs, he explains, developers may end up short-changed -- even if they make money, too -- when dealing with a publisher seeking to exploit every aspect of the games they sell in order to maximize revenue. Buscaglia offers an example in the form of a case study from his own experience, when he began working with an experienced developer excited to finally release an original IP. The publisher was even willing to allow the developer to retain IP ownership and a favorable royalty rate on sales. But, as Buscaglia explains, there were some issues: "As expected, there were some of the usual 'minor' issues with the contract that had to be addressed, and a few twists. Although the royalty split as acceptable, there was mention of the publisher’s right to exploit several additional potential ancillary revenue streams with no participation by the developer. In-game advertising, for example, was included with no revenue split. There was also a vague reference to the publisher having a right to B2B relationships relevant to the game, but no description of exactly what that meant. When pushed for the details of what sort of B2B deals they might be looking at, the publisher just danced around any meaningful answer. Of course, this sort of behavior made me even more suspicious that this might represent a clever new revenue stream from the game. Call it my jaded lawyer’s suspicious nature." Buscaglia goes on to explain why it was necessary for him to negotiate a "catch all" contract -- not only to ensure the developers received royalties from in-game advertising deals, but to ensure they got a share of any revenue the publisher decided to pursue through other avenues in the future. The full feature explains the multiple ways that new monetization avenues for IP can cause issues for developer-publisher contracts, and Buscaglia advises on how staying savvy can keep developers from getting left holding the bag (no reg. required, please feel free to link to this feature from other websites).

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