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So I got a crazy question

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monkey man
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Joined: 07/01/2009

I have a company say company x that wants to pick up my entire line say 10 games.
They offer me 8% of net for a royalty.

Because
A. The are putting up the money for publication.
B. they have a network to distribute.
C. They already have marketing in place.

So far that is fair, however I have an x Factor.

I can bring $500,000.00 to the table to offset cost lets say form a rich uncle.
so what would be a fair royalty based on that?

%20
%30
or more?

schtoom
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Joined: 08/31/2009
Is $500k greater than or less

Is $500k greater than or less than the difference between x% and 8% of the royalties? Hard to tell. I have no idea what proper percentages are and I won't get into that, but if it were me I would hold on to my rich uncle's money.

CloudBuster
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Joined: 04/14/2009
Lots of variables to consider here

Wow.

There's a lot to consider here. The question is really broad...perhaps too broad to give you a definitive answer. However, if you've got a rich uncle that has a half million bucks to invest, why not simply publish and market the game yourself and take ALL the royalties?

If this company can market it for you, why not just pay them a marketing fee and then take ALL the royalties?
If they'll publish it, then pay them a publishing fee and take ALL the royalties.

I'm assuming the company has taken a look at all 10 of your games and they've done the market research to find out stuff like:
1.) How many other games like this are already out there?
2.) How well are these game selling?
3.) If they're selling well, what's different about Monkey Man's game that will allow it to compete (i.e. why would someone buy a similar game if there's already a great one out there?)
4.) If they're not selling well, why? Once again...what's different about Monkey's game that'll make people buy it?
5.) If this is a new, ground-breaking game, is the fact that it's different enough to make it sell?
6.) What kind of volume are you talking about? 10 games is a lot of games...10,000 units of each game? 5,000? 20,000? Will each game have different volumes?
7.) What's the production cost of the games? Are they card games, board games, etc.?

I think if I had 10 games under my belt and I thought they were good enough to sell commercially, AND I had a company that could publish and market said games, AND I had $500,000 to spend, I'd try to pay a flat fee for the stuff I couldn't do myself and grab all the profits from the games.

That's a lot of if's, though.

Pastor_Mora
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Joined: 01/05/2010
Offset what?? For 500k, do it yourself!!

Royalty is 10% gross. Net it as you must.

Games can't cost you more than $40 each to print over 10k. They make 30% for producing it ($12 max each), 30% for distribution ($15 each) and 30% for retailing ($20 max each). Thats how you end up with those 89.99 boxes! 10% Royalty over that is $9 gross, their offer is never net, because they don't pay your taxes. So, the most you'll get is $6 clean each (you'll need an account wizard).

Do your numbers (you should have anyway, to convince your fairy uncle). You may handle the production part, leaving them distribution and retail.

Most important, establish the release schedule. Ten games is a lot and you may be stuck with them for long with no monkeys on the street.

I'll love to meet your uncle LOL

monkey man
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Joined: 07/01/2009
Problem with uncle

Uncle has money and believes in nephew, however uncle didn't make $500,000.00 by being an imbicile.

Uncle understands that company x has staying power and proven distribution and marketing, so maybe Monkey man goes to company x and proposes buying into said company and letting him distribute his games thorught thier pipeline?

Or allowing company x to invest that money into monkey mans games and giving monkey man 50% of gross.

domd
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Joined: 12/15/2008
Write a business plan

This comes back to basic business. Sounds like you need a biz plan and a marketing plan. There are plenty of free downloads for sample business plans out there. Make your uncle understand the niche that your games fill, how they will be produced, how they will be distributed, how they will be promoted and a pricing sensitivity to go with it. Calculate expected gross margin (sales minus costs). Remember that taxes need to be taken out of your earnings.

In the marketing plan, present the genuine strength of your game offering, the weakness of your offering compared to other games in the same market space, your opportunity for growth and improvement of the market, and the threats that exist against your game being a success (including production showstoppers, such as inability to get Chinese printing once you start there, etc). Explain your strategy for how you would promote the game, how you would get your customers to look at it the first time, how to get them to buy it once they've seen it once or twice or three times, and how to remind them that they're interested in your game time and time again until they've finally bought it from you.

This all takes money, and time.

Use these plans, not just to tell the story to your Uncle about why you can make him more money in return than if he had invested the money in the Dow Jones Industrial Index or S&P 500, but also use the plans to convince YOURSELF that this is a good idea, and that the work will be worth the initial money, time and effort, after all other costs, selling/marketing expenses, taxes, and profit-taking by Uncle are taken out of the mix.

Most important of all - be fair and honest in your self-assessment. The last thing you ever want is to have money problems get between you and family. Sorry - that isn't business 101 like the rest, it is just personal belief from personal experience. Use it how you want, and proceed with caution. Good luck to you!! I'd love to help you by critiquing your business plan once you write it, before you submit it.

Dom

Willi B
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Joined: 07/28/2008
Maybe it's just me....

But why jump the gun on the $500k?

I wouldn't give them all of the games... let them prove themselves with the first 3 with the option on the others based on their performance. When you see how many things they do wrong as well as right, you can then make a decision on the right path with the uncle money.

Learn lessons before risking too much... otherwise the uncle won't invest anyways.

larienna
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Joined: 07/28/2008
Personnally, I prefer the

Personnally, I prefer the "start small" and then grow. Build reputation and loyalty first. This way it reduce the risk to completely fail and allows you to readjust your aim when problems arise.

8% net royalties for a game is good. From what I have heard before, it was around 2.5% for board games. In the book industry 10% goes to the author. So asking for more is a bit ridiculous.

MarkKreitler
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Joined: 11/12/2008
I'm with Willi B on this. Not

I'm with Willi B on this. Not only will you give the company a chance to prove itself, you'll give your game designs a chance to prove themselves. Once you have an understanding of the company's reliability and your designs' appeal, you'll have a much better idea where to sink that cool half-mil.

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