It's just a quick idea that I had. In the current business model, the publishers finance the game made by a designer. The designer gets royalties in return and the publisher assume 100% of the fundings to make the game. There are other models like Kick Starter and P500 that I will not really talk about here.
But what if the designer could assume a small portion of the risk. For example, the game production cost could be split in shares and the designer could buy shares of their game. Let say a game cost 10000$ to produce, split in 10 shares, and the designer could want to invest let say 2000$ in the game production then he will get 20% of the shares. The rest of the production cost would be assumed by the publishers.
In the end, the designer will get his royalties and 20% of the profit. While the publisher would collect the rest which is 80% of the profit. There are various advantages and disadvantages to this model:
- A: The fact that the designer is willing to share the risk proves that he is confident with his game.
- A: The designer gets more income since it's profit share + royalties. So the amount of copies that must be sold to reach break even is much lower. Reducing the risk to lose money.
- A: According to the amount paid by the designer, or other people, it could help the publisher accept the game since they find the project less risky because they do not have to fund everything.
- D: The designer needs to pay money which is not always available, or sometimes even a 10% share could be very expensive.
Did anybody have seen something similar?
Do you think it could work?
Could it be a good idea, when you submit a game to a publisher, that you say you would be willing to invest up to 2000$ in your game if they accept?
The total price would include all the fees to make the game go from the printer to the retail shelves. Still, it could be true that for some fees, like administrative works, it could not be easy to identify how much hours of work were spent on a specific title. So I agree that there could be a gray zone that prevent the publisher to know exactly how much a game would cost in total. So having extra income could help fill in this gray zone.
Else I was thinking that after the initial investment from the designer is refund, the share of profit goes to the publisher. So the idea of initial investment would not be to make more money, but rather reduce the risk of the publisher and prove that the designer is confident in his game.