Step 30: Board Game Contract Negotiating, Part 2 of 3: The Money

Here are some things to consider when you’re negotiating a contract with a publisher. This post will focus on the money side of the contract.

Advance: Some bigger publishers might give you advance at the time of signing. This could be a few hundred dollars or a few thousand dollars. If it’s an advance this means that it comes out of your royalties until it’s been fully recouped. So if you get a $2000 advance then you will forego the first $2000 of your royalties. Sometimes it might not be an advance but an actual signing bonus which doesn’t come out of your royalties. Obviously you should be clear in the contract which it is before you sign! One of the reasons why a publisher would give you an advance is because it motivates you to help in the marketing of your game since you won’t make any more money until the advance has been paid off.

 
Percentage: This is what you will get paid for each game that is sold. Most publishers will pay you a percentage based on their selling price – not retail price! If the game retails for $25 then the retailer probably buys it from the distributor for $13 or so and the distributor probably buys it from the publisher for about $7. So your percentage is based on that $7 not the $25. What kind of percentage is fair? There are many variables here. If it’s with a big company that plans a big print run and will support it with advertising then your percentage could be small, like 3-5%. If it’s a tie-in to a big franchise like Harry Potter or Spiderman then it could be even less. If it’s a smaller publisher with a smaller print run then you could get anywhere from 7-15%. If it’s your first game published then expect it to be on the lower side since they are taking the risk with an unknown designer.
There’s more than just a flat percentage to negotiate though. You could negotiate a rate that increases over time. You could suggest that on the first 1000 games you’ll take a 7% rate, then the next 2000 games it goes up to 8%, and so on until a cap is reached. Publishers like this idea because if the game is a flop then they’ve paid out less to the designer, and designers like this because if the game is a hit then they take some short term pains to get some longer term gains. We tried this with one of our games and the publisher liked the idea. We recommended the sliding scale that we thought was fair (OK, we’re not dumb – negotiating tactic #1 – always ask for more than you would settle for!), and the publisher came back with a revised scale that worked for us.

 
Copies of the game: This is the easiest thing to negotiate. It’s a lot easier to ask for more copies of the game than a higher percentage. But there’s more to this than just how many copies you get when it’s published.
You should have a clause in the contract that states that you can buy the game directly from the publisher at any time at distributor cost. The publisher still makes a profit, but you get to buy the game at $7 instead of buying it at a store for $25. Even though you’ll be getting your own copies, they run out fast and if you’re planning on doing a bit of your own marketing (which you definitely should and a future post will be dedicated to it), then you’re going to want access to more copies of your game for cheap.
Also you’ll want to put in your contract that you’d like at least 1 new copy from each successive print run. As the game gets reprinted, sometimes there are art or rule revisions and you’ll be thankful to have the most up to date copy in your collection.

-Jay Cormier

If you agree upon an advance, be careful to read the wording in the clause – do you have to pay back the difference if the game does not make that much in royalties, ever? Do you have to pay it back if the company does not go to market with the game or if the company folds prior to the game being released? It pays (literally) to be sure of these things up front! For a well-established publisher, an advance against royalties should not be a major issue at a low dollar amount (depending on various things such as estimated print run and percentages). But for a start up company, paying out anything up front, even though it may be “worked off” over time, may make or break the deal. If, like Jay says, you can convince them that the advance is an investment in you being an active marketer, that may swing things in your favour. In my mind, the advance is what lets Jay and I work on new games while the other ones are being developed and produced. An advance gives designers recognition up front and some breathing room while they’re waiting for the game to be completed. It’s standard fare in other creative fields such as music and literature, so why not game design? Signing bonuses are really only for the true “superstars” of our field so don’t expect to see those on your first time around!

Regarding percentages, it is a good idea to not get too caught up in the percentage itself, but to consider the print run of the game and the market penetration of the publisher. Do the math. A small print run by a boutique publisher of 1000 games at 15% a game nets you $450.00 if the publisher’s selling price is $3.00 and it sells out COMPLETELY. Compare that to 3% royalties on a Hasbro-level print run of 50,000 copies with a publisher’s selling price of $2.00. That game could see sales of only 10,000 copies (1/5 of the print run) and you’d be making $600. So you’re not a millionaire yet, but, in short, increased increased revenue potential exists with higher print runs, despite lower percentages and lower selling prices. While percentages are important, you may want to take a look at other things like the company’s marketing plan, their mass market distribution (e.g. local hobby stores vs. Toys R Us and Target) and what their normal print run and sales are like on similar games. Knowing that you’re with a successful company may help you be more at peace with a seemingly low percentage royalty fee. As you get more games out there and build a strong reputation as a successful designer, you will be able to command higher royalty fees. And as you get more savvy with this end of the process, you’ll get to know who you can negotiate with and what the “Industry Standards” are.

One thing that Jay and I are considering doing when it comes to copies of our games is purchasing a whack up front and selling them online. The reason why is because we’re Canadians and our fans, friends, and family who are Canadian get royally shafted when it comes to ordering single units from the US. Also, we usually know a lot more about the US distribution sooner while our fellow Canucks are chomping at the bit for the games. So, we’d love to be able to meet their needs sooner than later. So this is another reason for us wanting to put a clause in the contract allowing us to purchase at cost. We may never do it, but we’d like the option to be there in writing should we want to.

-Sen-Foong Lim

BGG.con – Games I liked, disliked and bought!

I had time to play some games while I was there of course and here are my likes and dislikes:

Likes:

Troyes – Warning – try to get someone who has played the game to teach you the rules!  The rules are very convoluted and hard to understand.  The game is also convoluted and hard to understand, but it gets easier and easier as the game progresses and by the end of the game I found myself really enjoying the mechanics.  The game has players rolling different coloured dice, depending on how many of their workers they place in the different coloured zones, and then using the numbers on those dice to fulfill specific actions.  What makes this game not as luck based as other dice-rolling games is that you can buy other players’ dice from them.  So, not intuitive at first, but a game I would like to play again.

Tikal 2 – Surprise, surprise – the sequel to my favourite game is a lot of fun!  The similarities between the two are mostly thematic and the fact that hexagonal tiles are placed on the board – that’s about it.  So if you’re one of the few who don’t like Tikal, then you should still try out Tikal 2!  Players sail their boat around the perimeter of the board and pick up one tile that gives them a specific action to do in the temple.  In the temple players are going from room to room placing flags and collecting points.  Gone are the 10 point action point system from Tikal, and instead players are free to go anywhere on the board that they want, as long as they have the right coloured key.  Overall a fun game (did I mention that I managed to squeak out a win in the end?) that I will definitely be buying!

Eminent Domain – the big deck building game from Tasty Minstrel that has received twice as much funding from Kickstarter as they needed.  The game is only in prototype form, but other people had printed out a copy for themselves and brought it with them – so it was being played by a lot of people throughout the convention.  I’m not a huge fan of space games, but there are some great mechanics in this game that makes it not similar to Dominion at all.  I enjoyed the fact that you could specialize in one area, and that players could follow the actions of other players.  That kept everyone interested on everyone else’s turn.  I didn’t like that the tech cards that you can research were too confusing for a newbie to understand.  Because of that I decided to not specialize at all in Research and that was a big mistake and I knew I lost early on in the game.  Still, with some minor refining, the game could be made more accessible to us newbs and will probably be a big hit for Tasty Minstrel.

Rattus – While it’s a bit unpredictable, I enjoyed the theme and variability the game has based on which roles you use in the game.  Players place their player markers in different regions and then move the plague indicator to a region.  If there are rat tokens and player markers in that region, then they are turned over to see if any player markers die because of the plague.  Fortunately players can recruit various roles to help them, though the more roles they use, the higher the probability that a player’s markers will be infected by the plague.  Interesting, but possibly a little too unpredictable.  I’ll play it again though.

 

Dislikes:

Merkator: This is Rosenberg’s next game after Agricola, Le Havre and Gates of Louyang.  The only good thing I can say about this game is that it at least doesn’t feel like a derivative of any of these games.  I like Agricola and Le Havre is pretty good, but there are a lot of shared mechanics between those and even Gates of Louyang.  In Merkator players move a shared marker around the world in order to collect a specific resource.  While he’s there a player can fulfill a goal card if it’s for that location and he has the proper resources.  Did I mention there are about 16 different resources?  The game feels very abstract and has no theme at all.  If I wanted to play a spreadsheet, I’d just go to work.  Boo.

Games that were getting good buzz but I didn’t get a chance to try yet:

Navegador – seemed like I would enjoy this new Rondel based game.

K2 – a very themey game about mountain climbing that was getting some good buzz.

7 Wonders – this was the big hit of convention, though it had its haters as well.  I learned the rules but never had a chance to play it.  It plays up to 7 players but probably is best with 4-5.  You only ever interact with a player on either side of you so some people didn’t like that.  Almost everyone liked that it could play up to 7 in under an hour though.  Still can’t wait to try it!

Hansa Teutonica – I saw some people playing this and it seemed to generate a lot of positive buzz, though it doesn’t look like a game I’d like.  I’ll reserve judgement of course, until I’ve played it – which I want to do.

Nuremberc – Had the rules explained to me and it seems simple enough but I’m worried that the theme is irrelevant.  Looks pretty, as it’s illustrated by our friend Josh Cappel!  I’ll try it when it comes out.

I managed to increase the size of my game collection as well as I purchased the following games from either the vendors or from the flea market that was held on Saturday:

Grand Cru – the new game about making wine.  I got this to play with my friend Matt who’s also making a wine game – which unfortunately is becoming a saturated theme!

Merchants in the Middle Ages – a ‘new’ game from Kramer.  It’s really just a reprint of Die Handler, which I haven’t played but I’ve been happy with Kramer’s game more often that I haven’t.

El Capitan – an older Kramer game that I never played – but as I mentioned above, it’s Kramer!

Gheos – a tile laying game – which I always like.

Aton – a 2-player game from Queen games. This was one of the free games that everyone could choose from.  I heard this was good!

Atlantis – a more complicated Cartegane ??? which is cool – plus it’s Atlantis…!

Money – a Knizia game I’ve enjoyed but never picked up.  Got it cheap at the flea market.

Pick Two – a good word game that I got super cheap.

Boardgamegeek the Boardgame – I heard it’s not really good, but it was another free game from BGG.con!

Now I have to go rearrange my game shelves to somehow accommodate these new games!

-Jay Cormier

Step 13: To Self-Publish or Not To Self-Publish

We’re 12 steps into this and we now should be ready to get a game published.  We should have a game that has been playtested and tweaked dozens of times.  We should be happy with where we’re at with the game and have played it a few times in a row without anyone wanting any changes in the game.

Now comes the big question: should we self-publish or submit it to a game publisher?  There are four differences between them:

Creative Control

Creative Control Board Game DesignWith Self-Publishing you have full creative control. If you want something changed, then you can get it changed depending on how much money and time you’re willing to invest.

If a Publisher is making your game then they have full creative control.  If they like your game about camping, but think it would be better if it was about camels caravanning in the desert then you’ll have to change it (this is a true story of what happened with Reiner Knizia’s Through the Desert – a great game btw!).

$$$

If you Self-Publish, be prepared to invest a lot of your own money.  Depending on how big of a print run you want to do will be a factor in how much you will need (anywhere from $5000-$50,000).  If you want to do a super small print run then you have to be prepared to either make a lot less per game or even lose money per game – as was the case in the first print run of Trivial Pursuit.  This strategy has paid off for the makers of Trivial Pursuit of course – and for others as well (Alan Moon’s Spiel de Jahres winner, Elfenland had an initial print run of about 100!) – but you just have to be prepared for that kind of cost!  If you can afford a bigger print run then a big benefit you get is ALL the profits!  Of course you might want to use a distributor who will eat into those profits, but you still get all those profits.

If a Publisher is making your game then you need to invest none of your money (except all the money you’ve spent on tools, resources, entry fees for competitions, travelling to conventions, pizza for your playtesters etc…).  They take all the risk, and as you can imagine – they take most of the profits.  As a designer you are left with anywhere from 1%-10% of Distributor Cost (Publisher sells the game to a Distributor, Distributor sells to a Retailer, Retailer sells to a customer).

An example:  If a game is sold in retail for about $40, then the retailer might have bought it from the distributor for about $20.  The Distributor might have bought it from the publisher for $10.  A designer might get 5% of this – or $0.50 for each game sold.  As you can see, it’s hard to get rich as a board game designer.  Hopefully we’re making games because we love making games though!

Expertise

Expertise Board Game DesignA Publisher is going to have contacts and relationships within the industry for artists and production.  If you decided to self-publish then you’d need to find an artist and figure out where to get it made.  This expertise can be invaluable.  For us, we lucked out with Tasty Minstrel Games as they have hired two of the best artists in the board game community with Josh Cappel and Gavan Brown.  Not only that but they have learned a lot in their short history about production companies and have formed a relationship with Panda – the best place to get a game made.  Finally they have a tight relationship with PSI – the Distributors.  Not only are our games going to be distributed by PSI, but they have already played our game, Train of Thought and mentioned that they think it would be a good game to get into Barnes and Noble.  We wouldn’t have been able to get a contact like that if we Self-Published.

Time

Time Board Game DesignIf you Self-Publish you have an advantage of spending as much time as you can to get your game to market as soon as possible.  The downside is that takes a lot of your time.  A heck of a lot.  I was talking to the designers of Redneck Life and they mentioned that by Self-Publishing they now spend up to 80% of their time marketing their game instead of spending time on designing other board games.  So if that’s something that interests you, then go for it!

The challenge with a Publisher making your game is that they take forever.  From the moment they say they’re interested to it hitting the store shelves will be at least two years.  The game has to go through their development team, where they playtest it even more and make tweaks (hopefully with the designer!).  Then they hire an artist, and send it to China (probably) to get produced.  They get it shipped back to America and get it to the distributors. Then they do the marketing, which includes going to conventions, ads and in store promos.  That’s a lot of time.

So taking all these things into consideration, Sen and I decided that we preferred to have a Publisher make our game.  We were ok with the smaller profit potential because we weren’t in it for the money, and we would rather spend more of our time on making new games!

So for your game, what are you thinking about doing?  Self-publishing or sending it to a publisher?

-Jay Cormier

The only other items I can add to Jay’s excellent post are:

Space

The other part of the continuum when paired with “TIME” (see above), space, like it’s partner, is a limitation we all have to deal with. Neither Jay nor I have the space to safely store 1000 boxes of Belfort and 1000 more of Train of Thought, in a climate controlled/hermetically sealed enviroment. When you are your own publisher, you need to store your product and make sure the mice and water don’t get at your stock. When you have a publisher, they are responsible for all the mundane, yet vitally important things like safe storage of the game.

Many, Many Hands

In the case of games that are pretty much ready to go, you may not want or need much more input. But for some of the more complex games, like Belfort, we had the assistance of a great guy named Seth Jaffee to take it from a 10 to a 10.5! Seth is the developer for Tasty Minstrel. His job is to take a game that may have some minor rough spots and buff them out. He’s like Victor – he’s a cleaner.

Having a publisher usually means more eyes on the little details, more eyes on proofing, more people helping the project move along accordingly. So while we gave up some creative control and had to come to consensus on a few items, we are more than happy with the final products of our union with Seth and Tasty Minstrel Games. Both Train of Thought and Belfort are shaping up as games we are super proud of. Without the input of the publisher, both games would have been slightly different and, in my opinion, slighty worse if we had taken the self-publishing route.

In our case, working with the publisher and developer has been a dream. We’ve heard others tell different tales regarding other publishers. In the end, it’s all about communication and making effective use of collaborative tools to get the job done.

So, from the perspective of Jay and myself, where it’s incredibly difficult to co-ordinate even ourselves due to the geographic distances we have to travel to actually meet face-to-face let alone everything that self-publishing entails, you can see why we have reservations regarding publishing one of our games ourselves.

This doesn’t mean that it’ll never happen – many times (especially after a rejection letter), Jay and I often muse about publishing a game on our own. But then we go over the laundry list of reasons why we shouldn’t and we give ourselves a big old face palm for even thinking of doing something silly like that. But I can see a time in the future where we may want to go that way if we are both in a position to be able to meet the huge demands of self-publication.

For now though, we’re more than happy with our publishers – we’re estatic!

-Sen-Foong Lim