Publishing a mobile game is a really exciting moment for a developer. When it comes to signing contracts, however, developers can sometimes draw the short straw.
Publishing contracts can often be confusing and unclear. Pages upon pages of legal jargon can make it extremely difficult for developers to understand what they are signing up for - especially for non-native speakers.
At Coda, we want to avoid this confusion and help equip developers with the knowledge to make informed decisions when publishing their games. This guide aims to break through the noise and help you to understand the main sections of a publishing contract, key terms & definitions, as well as the common pitfalls to be aware of.
Key Areas of a Mobile Game Publishing Contract
In every mobile game publishing contract, there are generally four key areas that are covered in the contract. These generally relate to the mobile game, the publishing of the game, the revenue split and the parameters of the contract itself. Throughout a contract you’ll find the publisher’s terms and conditions for each of these areas (not necessarily lumped into separate sections), as well as particular clauses that should be adhered to.
Terms and conditions falling under this area generally relate to the mobile game itself and how the developer and publisher interact with it. Often within publisher contracts, it will outline who owns the Intellectual Property (IP) of the game concept, how the game will be developed, the roles and responsibilities of the developer / publisher in developing the game, as well as any exclusivity in testing the game.
Conditions under this category generally refer to the terms of publishing, essentially outlining how the game will be published, the launch and promotion of the game, updates and sequels to the game, if there is exclusivity of publishing, or if the developer is required to publish more than one game with that publisher.
One of the most important aspects of a publishing contract that can differ from publisher to publisher is the revenue split on profits made from your game. Publishing contracts will often outline the revenue split, royalty agreements and may sometimes include buyout clauses or minimum revenue clauses.
Parameters of Contract
While you can easily enter into a contract, there are ways a contract can be broken or absolved based on the agreements set by both parties (the publisher and the developer). These will often be in the form of Termination clauses or under a section called “Breach of Contract”, detailing certain behaviours that will warrant a termination of contract and obligations of the developer and publisher.
Pitfalls & Red Flags
In many cases, small studios or solo developers don’t have the resources to check legal details of contracts. Many will often rely heavily on the headline terms provided without reading the fine print and this can lead to developers signing contracts in good faith, while unknowingly being taken advantage of by publishers.
Below are some of the most common pitfalls or clauses in contracts that act as red flags, urging you to pay attention and really understand what you’re agreeing to:
Exclusivity is a common theme that will appear in publishing contracts and it exists to protect both the publisher and developer in the publishing process. However, sometimes exclusivity clauses can state exclusivity in testing with other publishers for certain timeframes, even on games not being published and restricting who you can test other games with. Every publisher will have different exclusivity agreements, so it’s up to you as a developer to decide what exclusivity agreements you are comfortable to work with.
Headline fees will often state the revenue split for developers, but sometimes small print can state a capped amount of revenue that developers will receive every month / week. Capped payment clauses may even be accompanied by a buy-out clause as well. For some developers, capped payments may be a more suitable or even preferred revenue model for their type of game. The red flag here is when these clauses are hidden within fine print, so make sure to read carefully and understand your payment model before signing!
Make sure you read the fine print properly! Headline fees or statements in contracts can sometimes reveal only half the agreement, with clauses and strings attached in the fine print. Read the fine print and make sure you understand how revenue share is calculated and split (by geography, user, device) and what your rights and responsibilities are as a developer entering into the partnership.
Buy Out Clauses
In this case a publisher can buy your game at a set price, meaning that you will no longer earn royalties once the game changes ownership. For some developers this may be a preferred scenario depending on the game and how much revenue they anticipate it will make in its life cycle. For others, this may limit the overall amount of revenue that can be earned from the game so it’s important that you’ve projected expected revenues to make a more informed decision.
Opt for contracts that help you grow as a developer
As a developer with a great game concept, you ultimately have the final say in which publisher you choose to launch your game with. So when speaking with publishers, we recommend you try and find a publisher that is going to work to grow not only your game, but your career as a developer through a mutually beneficial collaboration.
At Coda, we are proud to say that we differ from many publishers in the way we approach publishing games. Our platform is the biggest example of our core mission, which is to help level the playing field for developers by giving them the tools and data to optimise their game development processes. The mobile gaming industry can be difficult to break into as a smaller developer, which is why our platform and our publishing contracts are aimed at producing quality games for users rather than quantity.
Our publishing agreements are transparent and clear so you know exactly what you’re signing up for. We share all analytical data with you throughout the testing and publishing process and our contracts have no capped payments, buy-out clauses or hidden fees and costs. We also operate on a simple and easy to understand revenue model for all markets and territories.
As a developer it’s your game and your decision when it comes to who you want to publish with. Make sure you choose the right publisher who will provide a fair and honest collaboration and will help you grow your career and portfolio as a developer in the long-term!
Useful Contract Terms & Definitions
Confused by legal jargon? We compiled a list of the most common contract terms found in contracts and their definitions, as well as what to be mindful of when signing:
|Term||Defintion||What to lookout for:|
|Net Revenue||This refers to the amount of money remaining after costs of taxes & marketing have been subtracted||Make sure that you really understand how the revenue will be split and that there is no fine print setting revenue share based on country or traffic source. For example, some contracts may state a 50:50 revenue split on Iranian users, by an 80:20 split for U.S users.|
|Exclusivity||Whether or not you are required to publish exclusively with that publisher, with other publishers or whether your game can be published or tested later with another developer||Some contracts may state that you may only test a game exclusively with the publisher, even if the publisher decides not to proceed in the launch. Make sure you aren’t limiting potential future publishing opportunities by signing into a heavily exclusive contract.|
|Buy-out clause||A publisher can buy the IP of the game, with the set price specified in the clause||In this case a publisher can buy your game at a set price, meaning that you will no longer earn royalties once the game changes ownership. This may limit the overall amount of revenue you can earn from the game but is a case by case situation.|
|Indemnity||Security or protection against a loss or other financial burden. Indemnity clauses are included in contracts to protect both the developer and publisher if there is a breach of contract or unforeseen circumstances||Make sure to read this section carefully and understand both your responsibilities and rights as a developer.|
Are you looking to publish your next game or have a concept you think has potential? We’d love to see it! Submit your game directly on our platform here and discover how our tools and exclusive market data can help you to unlock your game’s potential.