[game_edu] Publishing a Game

[Ian Schreiber]

LOTS of different ways this happens. Time for me to raid my Game Industry Survey lesson plans...

Simplest route: self-publish as an "indie". Easiest on PC, although some services like XBLA and WiiWare are finally making this a possibility for console (though it's still limited). Direct download from your own website, shareware, put it up on game portals (which generally take a majority percentage, but are usually non-exclusive, so you can at least put it on many portals), make it free but with advertising... lots of ways to monetize this. Or, just put it up for free and your game is published... it is not a prerequisite that a published game must make money in order to be considered "published" (just ask any publisher ;-)

The more traditional route, common for console, is the third party developer / publisher model, which works almost exactly like book publishing. Publisher puts out a request for pitches (or developer cold-calls with a pitch). Publisher green-lights a project, and pays developer an "advance" (i.e. the money that is required to actually make the game, and typically not much more). Developer becomes a machine that turns money into a working game. Publisher pays for marketing (for high-profile titles, marketing cost ~= development cost), manufacturing, distribution, etc.  Business model is that retailer takes a good chunk of sales (which they need; they operate on thin margins as is, and shelf space is expensive). First Party (i.e. console manufacturer -- Sony, Microsoft, Nintendo) takes a small bite, around $10 or so for a $60 game per unit (and they need this too -- with the exception of Nintendo, first party typically starts selling consoles at a loss
 with the hopes they'll make up the difference in games sold). Publisher gets what's left. Developer gets screwed. :)

Okay, ACTUALLY what happens is that publisher gets what's left, and pays developer a percentage of that (typically around 10% or so, depending on a bunch of factors), which is called "royalties." But the catch is that the developer must "earn back" their advance out of their royalties first. So... for example, if a game sells at $50 retail and developer gets 10% of that, but they had a $5M advance, that means that the game needs to sell 1M units before the developer sees anything (and then they get $5/unit thereafter). So, developers typically don't earn royalties except on massive breakout hits. Publisher breakeven is much lower, so a lot of the time you'll have a game that makes a modest profit for the publisher but puts the developer out of business. (Is this fair? That question makes a great class discussion if you're prepared to argue whichever side your class doesn't :-)

Anyway. If you're a publisher, another route is to do the development in-house. That way you don't have to worry about royalties, so you get to keep more of the pie. (Or looking at it the other way: same deal if you're a developer with enough cash reserves to self-publish.) Which is one reason why EA has this habit of buying development studios, for example.

If you're First Party, then another route is to do the development AND publishing in-house, and then you get to keep even more of the money (it's just you and the retailer at that point). All first parties do this to some extent, historically Nintendo relies on this more than the others.

You would think at this point that you could continue the pattern, and it would occur to someone to consolidate development with retail, where a first party would merge with a chain of retail stores or something, but so far that has not happened. (Why not? That's another good class discussion :)

PC development has the advantage that there's no First Party to pay (and, if you offer direct download, no retailer either), so you keep a greater percentage of sales. Down side is that, in spite of the larger install base, there are fewer PC sales for standalone titles (presumably most of the PC dollars are spent on MMO subscriptions these days, although there are some people still trying to make the argument that lower retail sales means the PC is a dying platform, go figure).

So, those are the typical models.

Are there other ways to make money? Sure, tons of ways. MMOs and Facebook games each have their own business models, and some indies are getting creative on this front. One of the Project Horseshoe reports from this year suggested a bunch of other theoretical ways a game could be funded. But what I've listed above is the most common.

- Ian




________________________________
From: Nic Colley <Nic.Colley at cpcc.edu>
To: IGDA Game Education Listserv <game_edu at igda.org>
Sent: Mon, February 15, 2010 11:45:35 AM
Subject: Re: [game_edu] Publishing a Game

Yes. Mainly console and pc are the main avenues I am looking at.

Thanks,
Nic Colley
Faculty, Simulation & Game Development
Nic.Colley at cpcc.edu
________________________________________
From: Stacey Simmons [ssimmons at cct.lsu.edu]
Sent: Monday, February 15, 2010 10:50 AM
To: IGDA Game Education Listserv
Subject: Re: [game_edu] Publishing a Game

Nic, there are several different avenues depending on the source of
the game, and the type of game it is (console, handheld, etc).

Are you looking for your class?

Stacey



On Feb 15, 2010, at 8:53 AM, Nic Colley wrote:


> I have been looking around online now for a bit but my searches are

> coming up short. I am trying to find a solid breakdown of what

> happens or what steps are taken when a game is published or wants to

> get published. Any help would be much appreciated.

>

>

> Thanks,

> Nic Colley

> Faculty, Simulation & Game Development

> Nic.Colley at cpcc.edu

> _______________________________________________

> game_edu mailing list

> game_edu at igda.org

> http://seven.pairlist.net/mailman/listinfo/game_edu


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