Paying with Royalties?
by Keith Johnston · in General Discussion · 01/02/2003 (12:55 pm) · 7 replies
I have had a couple offers from people to work on a project in exchange for royalties on the final product. How is this done? Does anyone have a sample contract that they have used for such an agreement that I could see?
Problems I could see:
- What if the game is never published?
- How long would I pay them royalties?
- How would they verify that I am accurately reporting sales?
- What if the game is picked up by another publisher?
- What if the contract is canceled before the game is published, but then we decide to use some of the work of the contractor anyway?
Thanks,
Keith
Problems I could see:
- What if the game is never published?
- How long would I pay them royalties?
- How would they verify that I am accurately reporting sales?
- What if the game is picked up by another publisher?
- What if the contract is canceled before the game is published, but then we decide to use some of the work of the contractor anyway?
Thanks,
Keith
#2
01/02/2003 (1:35 pm)
No - I am writing a game. However, I would like to write a contract to hire an independent contractor to do some graphics and models and pay them a percentage of the 'take' that I get from each sale of the game. 
#3
- Unless otherwise stated in an agreement or contract, they don't get anything, or you can say they get x% of $0. lol, either way :)
- That I guess would be up to the agreement/contract that you make with them, but I would assume that you would do it for the life of the product, it's not as if their work would go away after time ;) But I suppose you could work out a time-frame.
- They would either have to trust you or they could contact the publisher for the information. Being on the team, I am sure they could get the sales information on the product they worked on.
- Well regardless of who publishes the game, the people who work on the project should be paid regardless. A transfer of publisher should not affect that. Depending on how you manage the dispersing of the payment, but the payment offered shouldn't be affected.
- If you cancel the contract or let go a worker, unless you get his permission (written is the best and most legally secure way), you cannot use his work. There could be some serious repercussions if the worker has proof that the work is in fact his. So if you do cancel his contract, you must get his permission to continue using it.
Hope that helps.
01/02/2003 (2:09 pm)
To answer you questions:- Unless otherwise stated in an agreement or contract, they don't get anything, or you can say they get x% of $0. lol, either way :)
- That I guess would be up to the agreement/contract that you make with them, but I would assume that you would do it for the life of the product, it's not as if their work would go away after time ;) But I suppose you could work out a time-frame.
- They would either have to trust you or they could contact the publisher for the information. Being on the team, I am sure they could get the sales information on the product they worked on.
- Well regardless of who publishes the game, the people who work on the project should be paid regardless. A transfer of publisher should not affect that. Depending on how you manage the dispersing of the payment, but the payment offered shouldn't be affected.
- If you cancel the contract or let go a worker, unless you get his permission (written is the best and most legally secure way), you cannot use his work. There could be some serious repercussions if the worker has proof that the work is in fact his. So if you do cancel his contract, you must get his permission to continue using it.
Hope that helps.
#4
Anyhoo, you shouldn't be asking us this. You need to meet with a lawyer at least, and preferably an accountant as well.
01/02/2003 (2:44 pm)
Development companies usually get the ability to have their accountant audit their publisher's books. I'd expect anyone who was taking a royalty pay offer seriously would expect the same. (Not that I think anyone takes royalty pay seriously - it's virtually synonymous with 'hobbyist.')Anyhoo, you shouldn't be asking us this. You need to meet with a lawyer at least, and preferably an accountant as well.
#5
01/02/2003 (2:49 pm)
Thanks - I do have a lawyer and have already asked for his advice. I was just wondering if anyone had a sample contract clause that I could see that might cover other strange conditions that I might not think of.
#6
That way, a pissed off modeller bailing out won't set back development for several months.
01/02/2003 (3:01 pm)
You may want to consider having the contract specifically say all content made for the game, becomes property of "your company" for use in that game only.That way, a pissed off modeller bailing out won't set back development for several months.
#7
01/02/2003 (3:57 pm)
I just emailed you a good solid contract. 
Torque Owner Nauris Krauze