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Advice on royalty sharing

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zamond
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Joined: 09/11/2008

Greetings!

So, I've completed extensive playtesting of a game and I'm looking to take it to the next step, i.e., publishing.

There are some terrific posts here on the merits of self-publishing vs working through a publisher. As attractive as self-publishing sounds, all things considered, the best route for me is to try to find a publisher. I know a couple of people who have connections at a few game publishing companies, large and small. These people are not game agents, however, but rather friends or work acquaintances. They have all played the game and think it really has potential.

I haven't brought this up with them yet, but I am more than willing to share a percentage of royalties with whichever of them manages to get me an audience with a major publisher, if that publisher takes on the game. My question though is, what is fair compensation for doing this? I don't want to offer too much, but I also don't want to offer something that might be insulting.

I was thinking something like 15% of any royalties earned for the first 3 years. Does this sound about right?

Has anyone ever been in this position before? If so, what was your solution?

Any feedback is greatly appreciated!

Thanks!

Willi B
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Joined: 07/28/2008
Major publisher?

Hasbro, Mattel or

Fantasy Flight, or

what?

Most Euros that accept outside submissions will not need your friends.

What company makes games like yours already? Does your game compete with some product of theirs?

These questions should help you decide what company you are SPECIFICALLY talking about.... and then the question could be answered.

Not every company will want your game.

InvisibleJon
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Joined: 07/27/2008
10% of the advance and 1% of net sales

zamond wrote:
I am more than willing to share a percentage of royalties with whichever of them manages to get me an audience with a major publisher, if that publisher takes on the game. My question though is, what is fair compensation for doing this? I don't want to offer too much, but I also don't want to offer something that might be insulting.

I was thinking something like 15% of any royalties earned for the first 3 years. Does this sound about right?

Has anyone ever been in this position before? If so, what was your solution?

I have a game agent. He gets 10% of the advance I get and 1% of net sales. This does not come out of the advance and royalties I get; it is paid by the publisher.

If you can get the publisher to handle all the accounting instead of doing it yourself, you'll be doing yourself a big favor. The less bookkeeping, the better.

zamond
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Joined: 09/11/2008
That sounds like an incredible arrangement.

Hey InvisibleJon. I've heard of game agents routinely demanding much, much more than yours is. Has he been around a while? Were you friends prior to him becoming your agent?

Anybody else ever hear of a similar arrangement?

zamond
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Joined: 09/11/2008
Question is about getting it to the publisher directly...

Hi Willi B,

You mentioned Hasbro and Mattel (owned by Hasbro) as accepting submissions. My understanding is that, unless you happen to have an inside connection, the only way to submit a game to them (and a number of other high-profile publishers) is through an agent, who will likely take anywhere from 30-40% of anything they help you secure. Needless to say, while that's always an option, it's not a very appealing one.

Have you ever submitted directly to Hasbro in the past? Did they actually playtest the game and/or pick it up?

Also, it's a word game. I have done some research into potential publishers. Word games are the hardest to bring to market. If you know of any in particular that ARE looking for word games, please let me know. Thanks!

solomonsthoughts
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Joined: 08/05/2009
Advise on Royalties ... Answer

Hi I am the CEO of Solomon's Thoughts Inc., I have been in the industry for nearly twenty years as a game and toy designer and have been an agent for the last 7 years and we are considered creative Geniuses by certain well known companies' brass. We meet with them all the time showing product - Our record speaks for itself. (Hey, no one else is going to tout our expertise)!

Anyhow, I came across your question and thought I would attempt to answer you. Most agents in the business charge a split of the royalties they are able to negotiate for you plus any down payments received. That split is generally a 50/50 revenue share. While to the inventor that may seem high I can tell you it is very fair. There is a lot of work that goes into getting the deal not to mention all the prior years paying the dues to get to that level of experience. Legitimate agents are like any other profession and deserve the fees they charge. That said, there are unscrupulous agents out there to watch out for:

The clue is if they make money off you, the inventor, (upfront with large fees in the thousands) or on the back end via royalties. (Disclaimer: Not all "front end" agents are illegitimate or unscrupulous - just be careful - do your homework). While some good ones can sometimes charge small $150 to $500 fees for reviewing the invention there are equally good ones that do not charge anything upfront. The reason for the upfront fee is because it takes legitimate time away from their day to day operations to review the concept and that costs them real money. If they didn't charge the money, every "would-be" inventor would be wasting all the agents time every day, so the fee is sort of a filtering process too.

Now a days it is very difficult to get into the big companies like the Hasbro's and Mattel's. They generally work with "A" List agents and so if an inventor contacts them they will refer them to those agents. There are a lot of companies that are "inventor friendly" however, including the third largest toy company Spinmaster.

My recommendations would be to use an agent for all of them regardless if the company will deal directly with the inventor or not. The agent knows the business and they know what the industry and the particular companies are looking for. And more importantly: what they are not looking for (and what they have already seen a million times). These companies are very busy so they really appreciate a professional agents who knows their particular company and their wish list. The agent is often considered a filter saving the company's time and money and can wade the sometime violent waters of the deal with finesse for the inventor Trust me, they are worth every penny of the 50% royalty. I know of no agents willing to represent inventors for 15% for 3 years. (Don't confuse the toy and game industry agents with literary or any other kind of agents - it is a different animal).

Just Google agents to the toy and game and toy industry there are a plethora of them. Or I would be happy to help you or anyone else. We will sign your NDA or can use ours.

We have been behind some big concepts out there in the past and are always looking for the next big one. (including outside the toy and game industry) If that is you feel free to contact us.

RDR
Solomon's Thoughts, Inc.
solomonsthoughts@gmail.com

Brykovian
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Joined: 07/21/2008
Hi RDR ... Thanks for

Hi RDR ...

Thanks for posting. It's nice to have someone with experience in the mass market game & toy industry posting. Most of the folks that post at this site who are involved in the game industry are more familiar with the niche markets, like Euro-games and indy-published games. A lot of us are hobbyists (for now).

To gain a better picture of where you're coming from, can you let us know what sorts products and games has your company been involved with?

Thanks,
-Matt Worden

zamond
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Joined: 09/11/2008
Pretty steep from a designer's standpoint...

Hi RDR,

Thank you for your well-crafted and informative reply. I greatly appreciate it.

Just so you know, I have done a bit of research into game agents, and am familiar with the royalty split structure. It seems like the average split is 60/40, with 40% going to the agent. I understand that game agents are invaluable in terms of their expertise and knowledge of the game publishing landscape, so I am not disparaging in any way the role they/you play in the process. On the other hand, were you to put yourself in the designer's shoes, you might understand some of the frustration of having to share 40-50% of all royalties you receive on a project (in perpetuity) with someone who is involved in only the last few steps of the journey. To be totally honest, it feels quite predatory.

From a purely financial standpoint, if an agent's share is 50%, the question a designer has to ask is, "will an agent be able to negotiate a contract for me that will earn me at least twice the royalties I otherwise would have been able to negotiate?" If the designer believes the answer is Yes, then it will be worthwhile to engage the services of a game agent. If, on the other hand, the answer is No, then it might not be a worthwhile endeavor.

Of course, some companies, like Hasbro and Mattel don't allow open submissions and will *only* accept submissions through an agent. In addition, these companies have a reputation for being pretty ruthless to the little guy, so it very well may be worth having an agent on your side that can help you negotiate a good deal, even if you are fortunate enough to have a connection to someone "on the inside."

Considering that my connection is not a game agent, and therefore would not be negotiating a contract for me or be involved in any capacity other than making some calls to help me get a foot in the door, I was trying to feel out what an equitable royalty sharing structure might be. In this context, do you think 15% for three years (for likely 10-15 hours of his time, if that) seems reasonable?

Again, thanks for the reply, and if I end up going the route of an agent, I will certainly keep you in mind.

- Zamond

Willi B
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Joined: 07/28/2008
Zamond -

I have a verbal agreement to meet and pitch to Hasbro on a game I have, but not until 2010 (they are tracking performance on existing product and testing me as a designer to make sure I am a patient person, I am sure). This will be my first such pitch and I am unpublished and without agent.

I assume this is a rare situation indeed, so I plan on capitalizing on that by bringing the best preparation and plan to bear.

However, that doesn't answer the questions you really have - fitting game with appropriate company.

You have a word game... if it is party-esque, plays fast and is quick to learn, I suggest Out of the Box publishing.... they accept outside submissions without your connection.

To me, you are going to have to familiarize yourself with the companies that exist and learn what games fit what companies best. They are your best chance. Then, find out if they accept outside submissions.

Do your homework before you start handing out your money. You might not need any connections.

inlovewithGod
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Joined: 08/05/2009
Wowza! 50% or profits plus a

Wowza!

50% or profits plus a fee just to look at the "invention"?? That is outrageous.

If that's true then I will definitely never use a game agent.

- Jeremiah

InvisibleJon
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Joined: 07/27/2008
I'm glad RDR spoke up...

Just wanted to chime in and say that I'm very glad that RDR joined the conversation. I also sincerely hope that he or she continues to participate in discussions here on the forum.

Why? RDR's experience, stance, and opinions come from a different P.O.V. from those of most of us here on the forum. This is immensely valuable.

Thanks for speaking up, RDR. I hope you continue to do so.

As to the 50% thing... It all depends. Consider this:

If you had a choice of earning $2,000 or $25,000 in royalties off of your game, which would you choose?

What if the $2,000 came from doing it all yourself and only reaching the hobby market and the $50,000 came from going through an agent and paying the agent 50% of $50,000 in royalties?

See what's happening there? Some people will refuse to take the larger sum, simply because they think that it's not fair, even though it results in lost revenue. What the right decision is all depends on what's important to you. (Me? I'll take the big money, thanks.)

Also, there are significant benefits to Mattel / Hasbro level exposure that are not measured in money. What price can you put on the ability to lay claim to designing a game that sold 50,000+ units and is carried in TRU or Wal-Mart? That would give you formidable clout when pitching your games in the future. What if you have a game with a message that you want to get out to as many people as possible? In a case like that royalties may be less important than the size of your market.

You make your decisions. You choose your path. Figure out what's important to you, then do what you need to get there.

inlovewithGod
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Joined: 08/05/2009
I do appreciate the RDR

I do appreciate the RDR posting here, and I hope he does in the future as well.

I still can't get over thinking 50% is a bit too high. I've researched literary agents before, and while I'm sure games and books are different, it still seems that they perform the same service: negotiating on your behalf, looking over any contracts, etc.

Perhaps writing a book takes more skill and time than designing a game? Or maybe that is the perception? I'm not sure.

Anyway, hopefully I didn't come across as too negative. I didn't mean any disrespect to anyone. That was just my knee-jerk reaction to seeing 50%.

Thanks,
- Jeremiah

guildofblades
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Joined: 07/28/2008
>>you might understand some

>>you might understand some of the frustration of having to share 40-50% of all royalties you receive on a project (in perpetuity) with someone who is involved in only the last few steps of the journey. To be totally honest, it feels quite predatory. <<

You see, new game designers often feel that the "design process" is most of the journey, but its simply not. Its a leg of the journey in the process of bringing a game to market, but usually not even the longest leg at that. Designers get this skewed sense of proportion largely because they often do not get to see the level of involvement and work required on the other legs and therefore do not respect them.

As a designer/publisher, my own experience pegs the game design parts of bringing a game from concept to market at maybe 10% of the work. And to be fair, since we are a small company and self publish, our process has less steps in it than Hasbro or Mattel will have. For instance, we don't need to "canvass" the market for game submissions that meet certain criteria that R&D or marketing has told us we should be seeking to sell next year and thusly also don't need to deal with the agents who will work with them to do that canvassing.

The "idea" has its place and it is important, but it is perhaps a mistake to think that its the cornerstone of the process. Just as an example, we have an business plan centered around a new means of publishing and distributing games. Its an old concept applied, as far as I can tell, newly to games. A good idea. Coupled with what we believe to be good game designs. But the whole idea goes nowhere without a huge amount of leg work selling advertising. On the order of importance, its like 5% idea, 95% ad selling legwork.

Ryan S. Johnson
Guild of Blades Retail Group - http://www.gobretail.com
Guild of Blades Publishing Group - http://www.guildofblades.com
1483 Online - http://www.1483online.com

Dirg
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Joined: 07/15/2009
The greatest game ever made

The greatest game ever made is very possibly sitting on someones garage shelf impressing the spiders and mice. An invention is a dream, your game is your invention so its your dream. For an inventor the dream is priceless far and above its worldly wirth. To a company your dream is business. The have to make a profit not just to cover your dream being made into reality but to cover the dozen or so flops too. Very hard to see both sides if your involved.

bluepantherllc
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Joined: 07/29/2008
Publishing and Royalties

What you're willing to accept for royalties has a lot to do with what you want to get out of the transaction.

Saying "I'm a published designer" inevitably brings up the question "Published by who?". And if the answer is Mattel or Hasbro, that's different than Mayfair or FFG, and that's different than "Self-published".

If you want money, an agent (at whatever fee they charge) represents a much larger upside POTENTIAL for you, if they can navigate you through to the right people at the big companies. If you want to be a published designer - and the money is not the prime motivator, then maybe an agent's services are not what you need.

That being said, a game designer (or publisher) can't do it all. Blue Panther uses an agent to represent us to the hobby games industry. What that agent charges for the services provided is worth every penny (to us) because we don't have the time to do it all oursevles. Sure we get less on each unit sold, but we have worldwide reach and any game store can call up their distributor and order our products. It's built into the business plan. Does the average game designer have a business plan for their game design? Maybe, maybe not.

We get game designs submitted from designers worldwide. Some we know and some we don't know. But the ones that say "I looked at what you already publish and I think this game will fit in your line because ..." get to the front of the line because they've already shown they're interested in what we may need from them as a publisher. I think that's the essential service that an agent is selling to a game designer. "I know how to navigate the Hasbro and Mattel product submission process and your chances are much better with my help than without it". That help can make your game a household name - so if that's what you want, then it's worth their asking price.

zamond
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Joined: 09/11/2008
A bit of clarity... :)

Hi, and thanks to all who have posted! I really appreciate all the comments and advice, and I think this is turning into a very useful discussion.

I wanted to clarify that I was not and am not "anti-agent." As I stated, I recognize that game agents have tremendous experience and are invaluable for navigating what for many designers (myself included) is largely uncharted territory, vis a vis game publishers. I haven't ruled out approaching an agent, either, and if I'm unable to get an audience at Hasbro directly, that is likely the path I will take. That said, if I can bring it to Hasbro directly, I feel I am a capable enough negotiator that I will be able to negotiate for at least half of what an agent would have been capable of doing. If that assumption is correct, that would mean I would be able to earn more from this game without hiring an agent than if I did. That's really the point I think when it comes to approaching an agent, because 40-50% is a lot, no matter how you slice it.

Someone mentioned that "the idea" is 5% of the overall effort put into a project. That may be true, but design, prototyping, testing, and refining is a *whole lot* more than 5%, and the bulk of what remains, such as production and distribution, is not really the domain of a game agent. What percentage of a project do you think the negotiation effort is? That's really the part the game agent is involved with most, isn't it? 5% Maybe 10? It's not a large percentage, BUT it is the most CRITICAL, and that's why agents are able to ask for such a high percentage of royalties in contrast to the actual amount of time they are involved with a project.

Someone else asked if designing a game is less work or takes less skill than writing a book. I don't know, as I've never written a book, but I have a feeling it depends on the individual... for me, writing a book would probably be more difficult, but ask an author to design a really fun game, and they'd probably tell you the game is the more difficult challenge of the two. Literary, music, and sports agents do not charge 50% of royalties, so RDR is totally correct when he stated that game publishing is a different animal. The question is why? I don't believe it takes less time to design a solid game than it takes to write a best-selling novel, and it probably takes far less time than writing a hit pop song (I've dabbled in audio engineering, so I have some familiarity with that process). All of this taken together is what led me to say that I feel the game agent business is rather predatory in nature, and I stand by that. This doesn't mean I don't value or respect what game agents do. We all need to make a living, and the laws of supply and demand (which most designers are fundamentally acquainted with) apply equally to game publishing as to any other industry.

So, to get back to my *original question* :) ... what do people think would be fair compensation to pay someone who is not an agent, for making a few calls and helping you get your foot in the door at Hasbro? I threw out 15% royalties for 3 years. Does anyone think this is too much? too little? just right? :)

@ Willi B... thanks for the advice, and best of luck with your game! If I am unable to pitch the game to Hasbro, I will definitely try to go direct to some other publishers.

Willi B
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Joined: 07/28/2008
Hasbro -

Would definitely be worth 15% in my opinion. It would be a bargain to be at any truly massive company with Wal-mart potential because of the numbers.

One thing I think you are underestimating severely is the company... you have a word game. If it COMPETES with the existing product line (like Scrabble) in their eyes, they will not want it. If it can be made into an expansion of their line, they may have increased interest. I can pretty much guarantee that Hasbro wouldn't want a word game that is competing with the same customers they already have in Scrabble.

Mattel might - though they seem to have been in much more of a lighter game mode, though I don't know how much a Scrabble game rates with them on the heavy scale.

Again, I don't know your game or how heavy or knowledge-necessary it is. My advice is to try to look into the games the companies are making most similar to yours and those that are willing to do them.

If it isn't a mass-chain potential game, I wouldn't work with an agent or your friend. The money potential just isn't worth further slicing of the pie.

zamond
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Joined: 09/11/2008
Hasbro has a few word games, don't they?

I think Hasbro has Boggle and Upwords as well. So, they do occasionally bring on additional product lines. Of course, that's a serious long shot, even if the game has mass chain appeal, which I think my game does. It seems far more likely that, if they're interested in the game, they would want to rebrand it to fit into their product line, i.e., "Scrabble Something". I would be more than willing to allow that! And the option will certainly be something I pitch to them if I get that far.

In general, though, I completely agree with you that knowing the publishers' product lines is super important, and I have been researching them. That said, because the game has mass appeal (at least I believe it does), I think the holy grail in terms of distribution would be to have Hasbro pick it up, and that definitely complicates things.

solomonsthoughts
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the saga continues!

This is a long post but might just be of help to some of you, inspire others and still may scare the rest out of the business...AND IT IS A BUSINESS SO TREAT IT THAT WAY!

Hello everyone. RDR here again. Thank you for the compliments. Perhaps some background would be helpful. I come from the unique, or perhaps not so unique perspective, of having been a game and toy designer for the past 19 years, (Still am with over 200 in my portfolio). When I first started out, my agent was the same agent that represented inventor Gunther Degan, creator of Scattergories to MB (now owned by Hasbro - who don't they own...). That game as you know has been consistently at the top of their line. Anyhow, we have been friends for all these years. In fact I spoke with him yesterday asking his opinion on an issue with Hasbro. (The Agent relationship is a business relationship for sure but much more than that. It is, or should be, a friendship as well. The idea is that if you are going to "be in bed" with someone for a long time you pretty much better have a good connection).

Let me tell you some horror stories that happened to me at the time I was green behind the ears and learning (slowly) the business and before discovering this particular agent: Let me take you back to the year 1992. At the time, KOOSH Balls were the number 2 selling non-advertised toys in America. OddsOn company was a small startup. I had never heard of them but read about them in USAir magazine. I immediately got 15 ideas for product line expansion. I researched the company, called and got through to the VP (I will not mention names but he has a thick Scottish accent) on a Thursday. He overnighted me a catalog and an NDA. I sent 15 market renderings and got a letter back from him (VP) stating "We were pleasantly surprised you came up with 7 different ideas we'd not considered being that we have weekly brainstorm sessions. We have already finalized our '92 toy line but when we get ready to define our '93 line we will be back in touch." (I know it verbatim). '93 came and went. At the time '94, I lived in NC. I visited my home state of Massachusetts and stopped at a toy store in Westboro, MA called the WIZ. There in the bin was my concepts: Koosh balls with collectible animal heads and extremities i.e. Lions, tigers and bears (OM). It was consistently in their top 3 selling products... it helped launch them into a 200 million dollar company and Hasbro bought them out a few years later for I think at least that much if not more. (and made the VP president of the acquisition).

I attended the 94 toy fair because my next concept/game had done well and was being launched there. I invented, (along with my brother) the first ever color version of Jenga. More on that later... At the show I went up to the KOOSH Booth and met with the same VP. When I confronted him he stumbled and stammered on his words and claimed he already had that idea. (Remember I had it in his own words he'd not). Well, after the show I reached in my back pocket for some cash but to my amazement I didn't have $250, 000 to start a federal lawsuit so I eventually found a high profile lawyer willing to take it on contingency. According to him by then I'd already been cheated out of about $2 million dollars of royalties. Well, he took the case but was involved in a huge suit with Power Rangers or something and sat on it for two years until the statute of limitations ran out...(2 years from discovery). I hate to think how much 5% over all those years would have amounted to.

Next, that Jenga thing. Took it to Irwin Toys (STAY AWAY FROM THEM). Irwin licensed Jenga to MB. I should have gone right to MB or at least Pokonobe - the owners - Irwin licensed it from Pokonobe. Again verbatim, "Great idea but were not interested because we are coming out with our own color version but don't worry it is all one color and doesn't use a color die."

(Now back to the '94 Toy Fair - a year later). My agent licensed it to TC Timber owned by Haba. They thought it would launch them out of niche` markets into mass merchandise. They had a six foot display at their booth - huge blocks. Irwin comes to the booth and says, "I can't believe it. Mine is not even on the market yet and your knocking me off." They told him, they licensed it from the same people that showed it to him over a year ago and said he turned beat red in the face and walked a way.

So why am I telling you all this: Because you need to know, it is a dog eat dog world in this industry too. My game was called Rainbow Timber. It won a platinum Oppenheim Award, A Parents Choice Award, Katie Couric and Al Roker played it on the Today Show for 7 minutes of air time and it was voted in the top 10 games of the year, featured in Child, Parenting magazines and Chicago tribune as top ten. TC Tmber had offers from major mass merchandisers but turned them down because of buy back clauses. Rather than negotiate an ok but lets try your top ten markets first to see how well they sell, they just said no. Consequently we sold just under 80 thousand games and MB went on to sell tons under the name Throw N Go Jenga.

So, again why mention all this? Two fold, and one of them is not to toot my horn. One, to tell you, while you may be a game designer - this business is anything but games. It is, or can be, depending on who you deal with, nasty, underhanded, cutthroat and any other adjectives you care to throw in there along with a few expletives. I have navigated the waters, learned who you can trust, and who you can't. I have paid my twenty years of dues and am more than ready for that twenty year "over night success story! to come along. I am willing to help anyone. The point is is that an agent can keep you from making the same mistakes or going through the same crap.

That said it can still happen with an agent too. But another reason to consider an agent who is worth their salt (or 40 to 50 %) is that they can tell you right off the bat if your idea had merit or not. If they have seen it a thousand times already. If you idea is sellable. If it is sellable to the big dogs or not. Many times as the inventor we are too close to the project and have fallen in love with it. BIG mistake. An agent has a vested interest in you and your concept, believe me he or she wants it to be a good one, otherwise they doesn't make money either. So, they can be honest with you. It sucks move on to the next one, or delete this and ad this and we can do something with it... etc.

I don't know about you but a million unit seller with a 5 to 10 dollar wholesale with a 5% royalty is nothing to sneeze at. Even with half to a quarter of that distribution. So, if as said elsewhere, if your goal is to just get it in the marketplace even if it is with a small company with small distribution channels, YES, do it your self if you want and if you have the time and inclination to learn the ropes. Otherwise, consider the agent's services. I mean $4k or $2k - its not that much difference in royalties....Oh, and BTW, it isn't "at the end" of the process - it is more or less at the beginning. It is a hell of a lot of work and aggravation to get it to the marlketplace. Plus with the agent working for you and with you, that frees your time to do what you obviously do best - INVENT. You may not make that million dollars a year on the first one but what if you just churned them out? three or four and you have your million residual working for you.

The other option of course is self publishing. You got an extra 50K to 300k or more laying around? Going to mortgage your house or your kids college funds? Are you an expert at managing, selling, marketing, administrating? Consider the minimum unit usually required is 5K. The unit price is going to be much higher for you on that purchase than for say Hasbro on a 250k unit order. Do you have 10 to 15 years to make significant market inroads?

Please don't let my last paragraph discourage you though. Believe me, the way Hasbro keeps buying up all the smaller companies, they are basically going to force many of you (and me) to go the self publishing route.

Funny story - I met with the two top guys (both Mikes for you in the know) and they loved one of my games (They usually kept 80% of what we pitched), but thought it needed reworking somehow. I was reworked out on this one and thought it played great the way it was. I thought it was a perfect match the way it was for Cranium. 6 months later Hasbro bought out Cranium. I'm telling you, this is the most frustrating business! But to me it is the most fun as well. I have met some great people, made a lot of friends, partied with pres/execs with a lot of the companies and for the most part they are all sincere and honest. There are some you have to watch out for though... Til next time,

Oh, and by the way, I am a writer too. since one of you mentioned that. I finished my first novel Murder-by-the-Sea two months ago. at 4 cents a word it is going to cost me 4k just to get it professionally edited to submit to the agent who is going to charge me that 10% LOL. Ouch!

RDR
Solomon's Thoughts, Inc.

Willi B
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Joined: 07/28/2008
Great Insight!

I wish Hasbro did a little more innovating and a lot less buying and licensing to be honest, but I bet everyone says that. In a way, this corporate mindset holds many companies back from what they could be.

It seems there is a pattern of them buying out anyone with success and/or a patent that seems halfway interesting. Then, they don't seem to learn from the company they bought out.

Example - Cranium had (mostly) clear and concise rules. Hasbro buys them out. They bring out Partini (perhaps already in the works when they purchased Cranium) as a slightly more adult Cranium. However, the rules were 3 times as long as they needed to be.

Maybe they thought adults would have more patience, but I think when you are trying to reaching Martini drinkers (or any drinkers, I suppose), you might want to make fast and easy rules. They could have asked the guy that did that job at Cranium they just acquired!

And, sadly, that is one of the game launches they wanted to factor into their need for a game like the one I will pitch them. I plan on having a plan B at the ready, but it is very infuriating for me to deal with corporate types or those that have to follow the corporate manifesto even though they are great people that are with you 100%.

As for agents, I can see the use. I'm trying to go the other route, but I might use one on an individual basis in the future.

However, I wouldn't put money up front to any agent. I'd counter-offer that if the agent finds a game like mine or thinks it unworthy in X amount of time, I'll pay him Y. That won't happen if I do a good job and do my homework.

scifiantihero
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I will have to . . .

solomonsthoughts wrote:

Oh, and by the way, I am a writer too. since one of you mentioned that. I finished my first novel Murder-by-the-Sea two months ago. at 4 cents a word it is going to cost me 4k just to get it professionally edited to submit to the agent who is going to charge me that 10% LOL. Ouch!

. . . look into editing as a career move!

:)

inlovewithGod
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Speaking of novels...

solomonsthoughts wrote:

Oh, and by the way, I am a writer too. since one of you mentioned that. I finished my first novel Murder-by-the-Sea two months ago. at 4 cents a word it is going to cost me 4k just to get it professionally edited to submit to the agent who is going to charge me that 10% LOL. Ouch!

Can I ask why you're paying to have your manuscript editted? From all my research, while sometimes a person will do that on their own accord, generally your agent and publishing house will edit the novel for you for no additional cost, simply as part of the process of publishing a novel. Actually, if an agent or publishing ask you to pay for them to edit your novel, RUN! :-)

- Jeremiah

zamond
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... and continues!

RDR! Wow, thanks for that incredibly informative and thoughtful reply. You certainly have a vast reservoir of experiences. You mentioned you are an author as well... have you ever thought of writing an expose on the rampant corruption in the toy and games industry? Maybe once you retire and don't care about being blacklisted...lol. I honestly don't know how I would have handled some of those situations you described. I might have tried hiring a lawyer to sue the first lawyer that allowed the original statute of limitations on the Koosh thing to expire! lol

As for the general theme of your post, "beware," you have definitely succeeded in scaring the crap out of me (and probably a good many other readers as well). I think it's any designer's/inventor's greatest fear that a couple of years after being told "No" by some unscrupulous publisher, all of a sudden their game is on the market. Clearly, in this case, paying 50% to an agent who could have steered you clear of this thief would have been a wise investment, as 50% of something is better than 100% of nothing.

But I ask you this... what if you were to only charge 30% instead of 50? I can tell you the "50%" scares a lot of people off (myself included). You'd undoubtedly receive even more submissions than you already are (which may or may not be a good thing), which in turn means you'd end up with more business, probably substantially more. You've probably crunched some numbers on this already, but in case you haven't, here goes:

Let's say, at 50% you receive 250 submissions/yr, 10 of which are good enough to pursue, 3 of which get published. Of the 3 published games, one flops, the other is a mild success and earns net royalties of $50,000 over the course of its life cycle, and the third is a big success, earning $500,000 in net royalties in it's lifetime. So, 50% of $550,000 is $225,000. Not bad...

Now, say that at 30% you receive 3 times as many submissions/yr (and I'm being conservative... it'd probably be far more than that). All else being equal, the total net royalties on the 9 published games (3 flops, 3 mild successes, and 3 hits) would be $1,650,000, 30% of which is $495,000.

I know I've simplified things in this example, but generally speaking, by discounting your rate to 30%, you'd earn an add'l $270k. And again, I think I'm being conservative with my estimate of 3x number of submissions; all else being equal in terms of agent quality and experience, there's no doubt I'd choose the guy that only charges 30%, and I have no doubt the vast majority of designers reading this would as well. I don't know... maybe the extra money isn't worth the additional work, but I'm guessing if you're earning more, you could hire additional staff to help you with the influx.

I know I'm not going to persuade anyone here to change their business plan, but I'm just trying to make the point that perception is very important. Even if you are the most honest, respectable game agent in the industry, by charging 50% simply because you can, you are going to appear to many aspiring designers/inventors as predatory. And I don't mean that as an insult. I'm just telling it like it is. There's no way around it.

Anyway, just something to consider. Thank you again for posting some of your hard-earned industry insight. I for one have found it quite illuminating and informative. I hope you will continue to post and share your experiences and thoughts here.

zamond
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something else to think about...

lol... I just thought of another argument for some intrepid game agent to lower his rate to 30% :)

Think about all those designers/inventors out there who either go directly to a smaller publisher or choose to self-publish because on principle they refuse to pay 50% (or even 40%) of their royalties to someone. If some maverick game agent chose to lower his rate to 30% he'd probably tap DEEP into that market. And while it's true that, he'd end up with a lot more flak as a result of the influx of submissions caused by lowering his rate, I think the upside potential for him of tapping into those markets would far outweigh the extra work involved in evaluating the extra submissions and taking on more clients. He could always hire people to help him with that.

MatthewF
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I think you're assuming that

I think you're assuming that most submissions aren't crap. I'm positive that Sturgeon's Law applies ("90% of everything is crap") in spades... and that it's probably even higher in game design due to the number of people who think you can design great games despite having only played a handful of them when they were children.

zamond
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Actually, I'm assuming 98.8% of sub's won't be green-lighted

MatthewF wrote:
I think you're assuming that most submissions aren't crap.

Hi Matthew, not to be argumentative :) ...but I'm assuming the exact opposite. In my calculations, I stated a given of 250 games submitted, of which only 3 are published (1.2%), and of those only one is a hit (.4%). So looking at it another way, I was assuming that 98.8% of submissions (247 out of 250) are not worth publishing, and including the ones that do get published, 99.6% of them (249 out of 250) won't be successful.

InvisibleJon
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solomonsthoughts wrote:Just

solomonsthoughts wrote:
Just Google agents to the toy and game and toy industry there are a plethora of them.
I just spent about 20 minutes Googling toy agents, game agents, board game agents, toy and game agents, etc...

I found a few, but... and I know that this is probably just an issue for me... a lot of the websites look really unprofessional. They don't make me feel confident in contacting them or working with them. I'd really prefer going off of a personal recommendation.

That said: RDR, I've sent you a message through the BGDF's private message system.If you look on the upper-left of any page under "Content", you'll see a "Messages" link, probably with a number next to it. That'll be me, and anyone else who's contacted you.

MatthewF
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zamond wrote:Hi Matthew, not

zamond wrote:
Hi Matthew, not to be argumentative :) ...but I'm assuming the exact opposite.

I should have put it differently, I guess. You're taking the crap factor into your calculations, but I don't think you are the agent's time. If 98.8% aren't worth publishing, getting 500 submissions in a given year instead of 250 means trying to find that 1.2% in all of those extra games. It's hard to imagine the payoff for the time commitment. It's unlikely that any given agent who can actually get games sold into Hasbro or Mattel has any problem getting enough games to look at, just not enough good ones. A higher volume of games won't make more time for weeding through the crap games, I don't think.

What would make a difference is doing what you could to ensure that the ratio of sellable games to crap is better. Though there may be no correlation between people who are certain their games will be huge hits (and who are therefore willing to give away a higher percentage) and the likelihood that a given game will in fact be a big seller, I doubt there's any real correlation between people who want to keep a bigger piece and the likelihood of a game being a big seller. It's a toughy.

zamond
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Yep, it is a toughy...

Yeah, I don't know if there's a real correlation there either. My calculations were based on the premise that the ratio of good to bad games (1 in 250) would be roughly the same if an agent dropped his rate. But that ratio is just a total estimate (I have no idea... RDR might chime in with an answer to that), and lowering the royalty split rate could lower the bar in terms of quality of submissions as well. But maybe it wouldn't. I'm sure there's some data out there to support this one way or the other. Would be interesting to see.

I did recognize and mention that an agent would likely have to bring on additional staff to help out with the influx of submissions, both in terms of evaluating them and taking on additional clients. Lots of people out of work right now... I'm sure there'd be no problem finding people who want to get into the toy and game industry! With the framework in place to handle that influx, though, you have to assume that the odds are the more submissions received the more "winners" there will be. Even if it's not a direct correlation, such as 5 times the submissions, 5 times the winners, it's probably not going to be drastically lower.

Now we need a game agent to actually do this :)

scifiantihero
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Uh. . .

. . . If the agent is hiring people, he's probably not keeping all those increased profits your made up numbers are giving him ;)

I know where you're coming from, but really, take a look at your game collection. Does it have cool games in it? Mine does. The industry really is doing something right: getting games to me (and all of us.) We could (and should) debate hypothetical ways to improve the quality of games that we're getting access too, but I'm not sure challenging the business practices of people who are successfully getting good games to us makes much sense.

And also, thanks RDR for the informative posts!

solomonsthoughts
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Let me say this about that...

Hi guys. Let me say this about that. Here are some facts you need to understand and may not have thought about. In an earlier post I said or alluded to something like: "never tell me the odds against me, (or you) if someone else can do it so can I (or you)."

Well I am a firm believer in that and always will be. Here is the philosophy behind that: When I was younger (51 now) growing up in the 60's hearing "I'm the greatest," from the mouth of one Cassius Clay or better known as Muhammad Ali, one of the greatest heavy weight fighters in history, I used to think "how arrogant of him." But you know what? Later in life, as a young man learning about life I realized something... Can you imaging getting into the ring with a 285lb man whose only goal is to basically pulverize and kill you and thinking....Maybe I'm not the greatest? So the point is, is that YOU BETTER BELIEVE IN YOURSELF AND THAT YOU DESERVE IT AS WELL. That glass in front of you should always be half full not half empty otherwise you might as well throw in the towel now cause you are going to have your clock cleaned in this business... and more than once.

Now that I prefaced that, here are the odds against you: Hasbro tells me they see (if I remember correctly) somewhere between 2000 to 4000 game submissions a year. Not sure of the exact number but 2000-2500 is a hell of a lot on the lower scale don't you think? Keep in mind to that not many of them are duplicates either. On top of that, realize that they may only have 20 slots open for new product for the year (which by-the-way is two years out into the future i.e. show it today and it hits shelves 2 years later.. or almost 3 years later depending on time of year they take it). Out of those twenty, they may have 16 from in house leaving four open from game designers like you guys.

That is pretty crappy odds. Now lets throw in the retailers on top of that: Go into a retailer like Walmart or Toys R Us. Do you see any empty spaces on the shelves? Not likely. Competition for shelf space is TIGHT, not to mention expensive. Shelf space is not free. Some charge for the space as well as the fact they want whatever is placed there to be TV advertised. So for Hasbro or Mattel to take your concept it has to be, without a doubt, the next best thing hands down. They will be investing millions of dollars to get in on the shelves.

Let me tell you what has happened to me: You do have the next best thing. They take what you have perhaps earlier in the year or the previous fall. Towards their cut off (May) an even better item comes across their desk. Yours gets bumped for it and I don't mean bumped til next year I mean bumped to the grave. And, or, an executives neighbor, sister, mother, brother etc. has a fairly good idea (not near as good as yours) guess what? Your's still gets bumped for one of those four slots.

Another fact: They don't care if you have the most exciting, incredible game they have ever seen, if they can't retail it for 5 times their costs they will not do it. It is not run by the creative types like us who go with their guts - not anymore. It is all business - all wall street mentality... run by the suits with calculators in their hands.

The odds are stacked against us on every level and angle. Here is another thing that happened to us: I submitted a game called Jewel Quest one September years ago. Mike called me to tell me it was the best family game they have seen in 9 years of searching and that they were probably going to do this one and would let me know in Feb after Toy Fair. The following March they sent us a down payment of $20k with a 30 day option Agreement. Guess what? They didn't pick it up. Granted we got to keep the money but I would have rather had the $250k royalty every year. The reason? Take your pick above... they will probably never tell you the real reason.

I also should tell you, even if they, and I don't just mean Hasbro, appear to be "friends" and even call you to redesign barrel of Monkeys or work on their wish list, you could bring in your concept and they see somethings or aspects of it they like but turn the game down. 2 years later you see they come out with something similar or something not like yours but incorporates one or two features from yours.

YOU BETTER BE SURE YOU COVER ALL YOUR BASIS. YOU NEED TO BRAINSTORM EVERY POSSIBLE DIRECTION YOU COULD TAKE YOUR CONCEPT. It is kind of like a patent: You want your patent to be as broad as possible to cover all the angles someone could copy you from but yet be narrow enough to be strong enough in its claims. Here is an example: You get this great idea for expanding GUESS WHO game. Instead of three rows of people you think CLUE - three rows, one with the possible killer, one with the weapon, and one with the place of the murder. And that is how you send it as described. WHO WHAT WHERE. They say no thank you and two years later the come out with GUESS WHERE.

Did they steal your idea or should I say a feature of it? Maybe they did. Maybe they didn't. But if you had described it that way to begin with as a possible method of play you would be in a better position for a royalty claim on it.

Geez - just looking at all I have written.. hope I didn't put anybody to sleep. I should just write a book on the subject. Incidentally, to the person who asked about the editing and mentioned the publisher doing it at no cost... While that may be true for a writer in their stable, I am not even in the corral yet! I have rewritten several times and edited as I saw it but the problem is I AM TOO CLOSE TO THE PROJECT (just as some of you are with your game design) and tend to miss a lot. Plus I suck at "speling" and grammar. I don't have the time nor want to take the time to edit. I want to do what I do best and that is create. Anyhow, I want the best possible manuscript to be competitive when that agent reads it. I have to look professional or it will hit the reject pile before he or she finishes the first paragraph. The good thing is that one of my favorite authors; NELSON DEMILLE, always on the NYT best sellers list, says he can't spell and his grammar sucks and credits his editor for making him a great writer. That encourages me cuz IF HE CAN DO IT THAN SO CAN I. Gee, where I have I heard that before...?

Ciao

OH BTW one more thing: I loved what someone said in a post, "someone might have the next best game on their shelf." That is so true. And for that reason I want to help ... I never charge anything upfront. I don't want to discourage anyone. I believe I am compelled to help others along to success just as others have helped me. That said, I don't take on a lot of clients for two reasons , there aren't a lot of truly new innovative things I haven't seen and I have too many things from our own portfolio. See? Even with me the odds are slim! LOL

RDR
Solomon's Thoughts, Inc

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