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Percentage of MSRP

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stuartellis2
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Being a newcomer to the boardgames industry as a designer, I’m wonderjng if this is a reasonable percentage to have on a first contract?:

The Contractor will receive 2.4% of MSRP (manufacturer’s suggested retail price) from any games the Company manufactures. These royalties will be paid up-front upon the end of the manufacturing process and based on the total amount of games printed during the specific print-run. The Contractor will always get the 2.4% no matter what the final selling price of the games will be.

apeloverage
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What is the contractor

What is the contractor doing?

Is this as well as, or instead of, an up-front payment?

stuartellis2
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The contractor is creating

The contractor is creating the mechanics for a board game and providing a rule book as well as all the components.

And no this is not as well as an up front payment.

polyobsessive
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Sounds fair

That sounds pretty respectable and about what I have seen as starter royalties.

The other deal you often see is a percentage of the price the publisher actually sells at -- if they sell into distribution, this amount is usually about 40% of MSRP. The royalty on this for new designers seems to typically be about 5% (maybe 6% if you're lucky), which works out as about the same as your 2.4% of MSRP.

Congratulations!

stuartellis2
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Is there typically any room

Is there typically any room to negotiate?

polyobsessive
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Maybe

stuartellis2 wrote:
Is there typically any room to negotiate?

I don't have enough experience to say with authority. It seems that there is usually some space for negotiation, but remember that if you want something extra you will usually have to give something up in return. Make sure you know what you definitely want out of a contract, and what you are willing to do without.

Also, as a newbie designer, you probably don't have a great bargaining position as there are so many of us trying to get our games published. It's unfortunate, but just the way it goes.

Good luck.

Jay103
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That's actually pretty

That's actually pretty favorable as far as the terms go. You don't need any reports of sales figures. You don't get screwed if they discount it, or bundle it. You get paid based on the PRINT RUN, before anything is sold. It's clear for both parties.

If you're the contractor:

Depending on who's on the other end of the contract, you can probably estimate what you're actually going to get paid, e.g. 1000 units x $59 MSRP x 0.024 = $1416.

Convert that into an hourly rate to see if it's a good deal for you.

If you're not the contractor:

You know exactly what you plan to print and what MSRP you're choosing, so you know what this up-front payment will be, and that seems pretty low, so yay for you. Paying an additional amount if you later have continuing success with the product seems very reasonable to me.

Jay103
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That said:If you're

That said:

If you're designing the game, AND writing the rulebook, AND specifying the components, that seems pretty cheap to me.

If you're DESIGNING the rulebook, i.e. formatting it for publication, that seems ridiculously cheap to me. There's no way rulebook layout done professionally is worth less than $500 on its own.

Anyway, if you're doing all that, the publisher is doing.. what exactly, other than contracting an artist?

Edit: Oh, also, if the game doesn't get published in the end, even if the Contractor does all the contracted work, the Contractor gets zip. If you're the contractor, that's a problem. If you're doing that much work, I'd say you want a clause that says that if it isn't published by X date, all the rights to the work revert to you.

questccg
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3-5% is the norm

Jay103 wrote:
If you're designing the game, AND writing the rulebook, AND specifying the components, that seems pretty cheap to me...

The minimum sales percentage (% MSRP) is about 3% and could go as high as 5%. This is per James Mathe website (I didn't invent the figures and you know that James is honest with his blogging).

If you are the publisher and you are offering 2.4%, I would suggest bumping it up to 3% for a new designer (First-time creator). If he/she has one or two other games, well then I would offer 4% and if this is someone with more than 3 games already, well then I would offer 5%.

Just my own advice based on Jame's percentages.

Edit: Here is the LINK/URL for the article about contracts from Jame's website.

http://www.jamesmathe.com/alien-first-contract/

apeloverage
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stuartellis2 wrote:The

stuartellis2 wrote:
The contractor is creating the mechanics for a board game and providing a rule book as well as all the components.

And no this is not as well as an up front payment.

So what are you providing?

stuartellis2
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The prototype of a boardgame.

I’m providing the prototype of a boardgame.

questccg
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Is this like a "collaboration"?

stuartellis2 wrote:
I’m providing the prototype of a boardgame.

Are you working with several parties on different aspects of the game? Like one person "designs the game and rulebook", someone else "designs the physical prototype", someone does the "Graphic Design" and someone else may "sell and market the game" (KS or publisher)?!

I suggest LISTENING to the following podcast episode (it's very relevant):

http://nerdlikeaboss.com/022-the-one-thing-you-need-to-know-as-a-game-de...

Why? Because one of the guest mentions that the one (1) piece of advice he would give to anyone interested in board game design ... is that the first prototype is "just the beginning". From the first prototype, you will learn how BADLY BROKEN the game is ... and re-iterate with the design, in order to produce more, better and better prototypes.

I'm just worried you BOTH have little to no experience making games. At least this is what it appears from the OP and help requested.

For my current WIP (Work-In-Progress), I've had over 5 Versions of the game. Each one kind of different, improved version of the previous one. Now at Version 6 ... The game has enough "meat-on-the-bone" and is just a matter to "tweaking" some finer details.

Anyways ... I would highly recommend learning from the BEST... And listen to that podcast, even if it's only the one (1) Episode that I've linked. It might open your eyes up to the realities behind Game Design.

Cheers...

Jay103
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stuartellis2 wrote:I’m

stuartellis2 wrote:
I’m providing the prototype of a boardgame.

I can't tell if you're the Contractor or if you're the one doing the contracting, and this answer did not clarify that :/

polyobsessive
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Contractor

stuartellis2 wrote:
I’m providing the prototype of a boardgame.

Is that the prototype of a game you have designed, or are you making a prototype of a game someone else has designed?

In other words, is this your design being signed for publication (in which case the use of the word "contractor" is a bit unusual and causing some confusion), or are you providing a service for another designer?

apeloverage
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stuartellis2 wrote:I’m

stuartellis2 wrote:
I’m providing the prototype of a boardgame.

I don't get how you're doing the prototype and the contractor is creating the mechanics.

Do you mean that you're doing the graphic design for the board and pieces, based on game rules that the contractor has written?

questccg
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I agree with the others...

stuartellis2 wrote:
I’m providing the prototype of a boardgame.

It's not clear about the "relationship": who is the "contractor", you or the Game Designer. Or like I said are you in some kind of "partnership"?! It's really not obvious the way you have presented it to us...

stuartellis2
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Apologies for my lack of

Apologies for my lack of clarity.

I have designed and made a prototype of a boardgame at home. It’s been through iterations of testing at testing groups etc. It’s made out of cardboard pieces that I have cut out personally and designed on Mac book pages and printed using a home printer. The game has a home made rulebook and is playable as a game. I don’t pretend it is the final version of the game by any means. By all accounts it is a very homemade game prototype that I have made on my own.

The publishing company who currently have the game have offered a contract with the above percentage to publish the game. In the contract I am the contractor. I have provided the prototype of the game.

I’d like to know if 2.4 is a reasonable percentage for that.
Apologies again for the confusion and thank you very much for your valuable input. It’s much appreciated.

questccg
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Glad you made the clarification

stuartellis2 wrote:
I’d like to know if 2.4 is a reasonable percentage for that.

To license the game from you 2.4% MSRP is a bit low. Should be closer to 3% MSRP... You should really READ this page from James' Mathe website:

http://www.jamesmathe.com/alien-first-contract/

stuartellis2 wrote:
Apologies again for the confusion and thank you very much for your valuable input. It’s much appreciated.

No problem... You did a great job in clarifying. Read it and figure out what YOU want to do... Maybe negotiate a bit HIGH ... like 3.5% and then meet somewhere in between... IDK. Say something like: "You realize that this is the first time you have dealt with this publisher ... but you have playtested the game extensively with many play groups..."

Otherwise you may get 2.7% (in between). I don't know how this publisher operates. If you tell them you want 3% no BS... Maybe they'll accept.

It's up to you to figure out what YOU feel your game is WORTH.

Cheers!

stuartellis2
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Thank you for this

Thank you for this

Jay103
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But definitely have a clause

But definitely have a clause in the contract where the rights revert to you if they don't, for example, pay at least $1000 (or any equivalent, like "print 500 copies"). Otherwise they have everything and you have nothing, and your game could vanish into the wind.

stuartellis2
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Ok sounds like a plan. Thank

Ok sounds like a plan. Thank you.

questccg
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Sunset clause

Jay103 wrote:
But definitely have a clause in the contract where the rights revert to you if they don't, for example, pay at least $1000 (or any equivalent, like "print 500 copies"). Otherwise they have everything and you have nothing, and your game could vanish into the wind.

What you need is a "Sunset clause". Something which says that after "X" years of no income earned with your game, any and all rights to the game revert back to you.

And you are NOT a contractor. You are the game's designer. The type of a contract that you should be getting is a "licensing agreement". You agree to license the IP (that is the game - rules, prototype, etc.) to the publisher in order for them to manufacture, market and sell the game.

Again you need a "Sunset clause" (as mentioned above). And you should have a respectful licensing rate. Like I said 3% MSRP. Your contract should also FIX the MSRP so that it is not "fudged" around during your agreement. So you can say $45 MSRP and you get 3% = $1.35 EACH GAME SOLD.

You can also determine if the Publisher wants to include you in the "development" phase of the game. This is when the Publisher agrees to license your game and begin to playtest and "refine" the game... Should it be necessary. I'm not so sure how to put this in legal terms...

Because when a publisher agrees to license a game from a Designer, he will work with HIS OWN "Developer" to refine and "streamline" the game such that they can market and sell it...

You would just want to be included in that process (if possible)...

Jay103
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I think what you're looking

I think what you're looking for is right of first refusal to work as the designer for any modifications, and possibly sequels, etc.

Publisher doesn't sound like they'd want to call it a licensing deal, if they're already referring to him as a contractor. More like an outright buyout of the game assets. Which is fine, of course (as long as that sunset/non-performance clause is in there too.. else you're risking selling them the game outright for $0)

questccg
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Exactly correct

I did not know the legal term for it and yes, I double checked the legalese behind "the right of first refusal" to work as the designer. Note that they could state that the game is going to be in a "development" phase as opposed to a "design" phase... But basically, you should continue as the designer to work with the Publisher's team to bring the game to the 90% completion rate and then when the Publisher is satisfied, they can move on to making, marketing and selling the game.

I would ensure that I would still have some "skin-in-the-game". In a way it is very positive since it means that you want to be involved and sometimes they may need your help in getting around hurdles or obstacles in the "development" phase.

In any event, hope your negotiations do well and that you get a reasonable agreement satisfactory to all parties.

Cheers!

questccg
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What is a bit "tricky"...

Is if you provide the Publisher with Version A ... and they and their own team take the product to Version Z (with all kinds of incremental changes) in order to ensure that the game is the best possible version for consummers ... It's a bit a "tricky" issue with LICENSING.

Because they could argue that you ONLY own the rights to the prototype, rulebook and all that was submitted for Version A. But in fact, the version commercialized is Version Z.

That's why I would ENSURE that you are PART of the "development" phase as a designer working with the Publisher and their team (Graphic Designers, Developers, Playtesters, etc.) to ensure that you are INVOLVED with the process to make Version Z.

This is a bit easier ... since what it means is that you participated in the process and therefore were not completely reimbursed for the time you put into designing Version Z. So because you are a part of it, you would legally still own some IP rights.

And if the Publisher no longer wants to continue making, marketing and selling the game, well it seems like it would be more acceptable that the IP rights go back to the ORIGINATOR of the game. Even if it is now Version Z.

Just some things to consider and think about...

stuartellis2
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All good things to consider

All good things to consider and i really do appreciate the feedback. Thank you so much.

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