The document discusses various paths for monetizing an inheritance, including saving it, investing it, or starting a business. It then focuses on starting a game business, covering topics like traditional vs. self-publishing, working with publishers, contract negotiations, and self-publishing considerations. The overall document provides guidance on strategically planning and executing different approaches to bringing a video game to market.

1. Level 2
David Mullich
Marketing and Monetization
The Los Angeles Film School

2. PATHS TO THE MARKETPLACE

3. We’re Suddenly Millionaires
Our rich Uncle Bim left us $2M (USD)!
 We can save it
 Risk?
 Reward?
 We can invest it
 Risk?
 Reward?
 We can start a business
 Risk?
 Reward?

4. Let’s Make A Game!
The Four P’s
 Product
 Price
 Promotion
 Place

5. The Place
Retail Store (Traditional Publisher)
Digital Distribution (Self-Publishing)

6. Which Is Better?

7. Traditional Publishing Advantages
 Experience
 Distribution
 Marketing
 Financials

8. Self-Publishing Advantages
 Brand Development
 Control
 Financials

9. Factors To Consider
 Do you need funding?
 Do you have marketing experience?
 Do you have operations experience?

10. Now Which Is Better?

11. Do Your Research!
 Read Gamasutra daily
 Follow developer blogs
 Connect with movers and shakers on
social media
 Talk to retailers at brick-and-mortar stores
 Visit industry meet-ups, conventions and
trade shows

12. GAME PUBLISHERS

13. What’s The Difference Between A Video
Game Studio and Publisher?

14. Studio vs. Publisher
A game studio developers video games that
are marketed and sold by a game publisher.

15. Game Developer (Studio)
 Design
 Programming
 Art
 Audio
 Project Management
 Testing
 Business Development (Sales)

16. Game Publisher
 Product Development
 Legal
 Finance
 Marketing
 Sales
 Quality Assurance
 Operations
 Technical Support
 Customer Service
 Community Management

17. Most of All – Publishers are the Bank
 Have the most money at risk
 Cost of development
 Cost of marketing
 Cost of inventory
 They reap a most of the
rewards.

18. Publisher Pros and Cons
Pros
 Keep your equity
 Money for development
 Focus on project
Cons
 Likely loss of IP
 Less flexibility to change direction
 Funding project, not company

19. Let’s Say You Decide To Use A
Publisher
What factors would you consider in deciding
which publisher to sign with?

20. Choosing A Publisher
 Suitability of their portfolio and fanbase
 Ability to promote and publish your game
 Working relationship with other developers
 Number of games they are publishing
 Publishing articles written by their staff

21. World-Wide or Country-by-Country
Model?
World-Wide
 Strong brand recognition of big publisher
 Budget for marketing and shelf-space
 Can finance games at early stages
 Simplicity of contacts and communication
 May overlook some territories

22. World-Wide or Country-by-Country
Model?
Country-by-Country
 Larger pool of publishers to choose from
 More difficult to distribute in US and UK
 Negotiations happen more quickly
 Less risk of project being canceled
 Higher royalty rates
 More focused marketing campaigns
 More attention to your game in general

23. Pitching To A Publisher
Publishers are not interested
in ideas.
Publishers are not interested
in documents.
Publishers want to see a
prototype!

24. Tips For A Successful Pitch
 Get In The Door
 Design The Pitch
 Assume Their Point Of View
 Know All The Details
 Be Organized
 Rehearse
 Be Passionate!!!
 Show You Are Serious
 Exude Confidence [but not Cockiness]
 Be Flexible
 Get Them To Own It
 Follow Up
Jesse Schell

25. More Tips
 Give everyone a role
 Have your laptop ready to go
 Have a preloaded video ready
 Talk about your game, not yourself
 Talk money honestly

26. Creating An Emotional Connection
Mad Men: Kodak Pitch For “The Wheel”

27. Congratulations! Your Pitch Was
Successful!

28. CONTRACT NEGOTIATIONS

29. Types Of Development Contracts
 Work for Hire
 Early Stage
 Completion Funding
 Pick-Up Deal
Let’s take a closer look at each!

30. Work-for-Hire Contracts
Publisher brings the developer a concept,
property or franchise and the developer creates
the game based on the publisher’s guidelines.
 Great for establishing reputation
 Usually requires a smaller staff
 Least amount of negotiating power for
developer
 Flat fee, but reliable form of revenue
 No retained rights to developer

31. Early Stage Development Deal
Developer pitches a publisher on a game that
they want to make and gets funding from the
publisher to create the game.
 Reserved for teams with solid track record
 Requires detailed GDD and tech demo
 Advances against royalties
 Developer retains certain rights

32. Completion Funding
Developer creates a game on its own dime and then
at some stage in the development process brings the
concept to a publisher that finances the rest of the
game.
 Good balance of creative freedom and negotiating
power
 Requires demo showing complete playability and
unique selling points
 Advances against royalties
 Developer retains certain rights

33. Pick Up Deal
Developer completes the game with its own
money and then sells the essentially complete
game to a publisher.
 Gold master date is near
 Strongest negotiating position for developers
 Country-by-country or world-wide model
 Advances against royalties
 Developer retains most rights

34. On Publishers
Start at 3:00

35. Advances
 Never paid in one lump sum
 Too risky
 Bad for cash flow
 Paid out over a series of “milestones”

36. Milestones
 Typically paid against “deliverables”
 Signed Contract
 Documents (GDD, TDD, Schedule)
 First Playable (Will it work? Will it be fun?)
 Alpha (feature complete)
 Beta (asset complete)
 Gold Master (publisher approved to sell)
 Source Code & Assets

37. Milestones
 Production milestones (such as Alpha and
Beta) are typically defined by:
 Features: Degree of completeness
 Assets: Percent final
 Bugs: Number and severity allowable

38. Royalty
 Percentage of every sale
 Up-front money is an “advance” on future
royalties
 Advance must be “earned out” before true
royalties are paid

39. Royalty
Factors determining royalty:
 Number of logos on box
 Net receipts (deductions for credits and
refunds for return)
 Additional expenses:
 Cost of Goods
 Insurance
 Shipping
 Witholding taxes from foreign countries

40. Stupid Developer Trick
 “I’ll cover all my costs with the advance and
wait for profits when the royalties come.”
 MOST GAMES NEVER EARN OUT (make
a profit).

41. Royalty Protection
Ways to protect your royalty:
 Escalating royalties based on sales
 Separate royalty for sublicensed distribution
 Royalty reports with units manufactured, units
sold, and wholesale price
 Limit copies publisher can give away for free
 Contract provision for auditing publisher’s
books

42. Risk vs. Reward
Video Game Developers vs Publishers: Who
Wins? (12:33)

43. Other Contract Provisions
 Definition of market coverage
 Minimum marketing budget
 Developer logo placement
 Engine and common code rights
 Ancillary rights
 Secondary platform and sequel rights

44. Negotiation Steps
1. Prepare
2. Talk
3. Offers and Counter-Offers
4. Never Do This!
Let’s take a closer look at each!

45. Step 1: Prepare
Create a negotiation planning document.

46. Step 2: Talk
 Strike up a conversation to build rapport
 Ask about the issues
 Show some trust to get some in return
 Face and Honor Societies require far more
nuanced and risky negotiation strategies

47. Step 3: Offers And Counter-Offers
 The first person to make an offer, loses.
 If you are made an offer, take time before
making a counter offer
 Take lots of notes
 User counter-offers to triangulate
sensitivities
 If you need to walk, walk

48. Step 4: Things You Should NEVER Do
 Enter a negotiation you’re not willing to walk away
from
 Negotiate one issue at a time
 Negotiate for the sake of negotiating
 Make open-ended offer
 Make an offer you don’t actually like
 Give up your IP or shares of your company
 Rescind or modify an offer after it’s been accepted
 Lie
 Threaten

49. Remember
A negotiation is a
starting point, not the
end game.
The best deal is the one
that gives you the most
value while also making
your counterpart happy.

50. Group Quest
Put together a pitch for your game.
 Prepare a 10-minute demo of your prototype
 Use a laptop
 Have back-up materials ready just in case
 Give everyone a role
 Rehearse first
 Be prepared for a Q&A

51. SELF-PUBLISHING

52. Indie Development
Extra Credits, Season 6, Episode 21 -
So You Want to be an Indie (6:29)

53. Setting Up Your Business
 Hire a lawyer to establish it as a legitimate
business.
 Hire an accountant or business consultant
 Fund the company, not a game
 Set goals and deadlines for evaluations
 Manage by the numbers, not the guts

54. Building Your Team
 Pick carefully whose on your team.
 Fire if you must

55. Developing Your Game
You can’t make AAA games, but avoid “one-
off” games that are too simplistic.
Even with simple games, have
 Meaningful progress over time
 Social features
 Frequent updates

56. Launching Global
A global launch does not mean just one
launch:
 Different platforms
 Different distributors
 Different languages
Maximize your access points to customers!

57. Launching Global
World use of languages:
 English: 4.70%
 Spanish: 6.15%
 Mandarin: 14.4%
Don’t forget to localize marketing materials as
well as your product!

58. Going Global
Country considerations:
 No prohibition on advertising or data collection
 Use standard digital stores
 Are emerging markets
Examples:
 Germany
 Spain
 Portugal
 Japan
 Russia

59. Managing Your Business
 Be an entrepreneur
 Prepare for failure; aim for sustainability
 After launching, just don’t sit back and
check the bank account
 Build a long-term relationship with players

60. Time Until “Independent
Sustainability”
Kitfox Games:
 Leaving last job and finding company: 5 months
 Montreal startup accelerator (at minimum wage): 9 months
 Financial sustainability (Kickstarter and grant): 3 months
Spryfox Games (11 games total):
 3 profitable games
 4 break-even games
 5 unprofitable games
 5 (or 20) unfinished prototypes

61. Time Until “Independent
Sustainability”

62. What Are Indie Dev’s Biggest
Mistakes?

63. 5 Biggest Mistakes Made By Indies
1. Lack of product positioning
2. Lack of benchmarking for trends and
competitors
3. Underestimating the value of media
content
4. Inadequate press kits
5. Failure to create community buzz

64. What Do These Mistakes Have In
Common?

65. Forgetting To Do The Marketing!

66. Doing Your Own Marketing
 The personal approach can work well
 The amount of time and effort can add up!

67. Hire Outside Specialist
 Freelancers and mini-agencies and big
firms, oh my!
 Some focus on PR, others on advertising,
or a mix
 Consider best fit for your budget!

68. Adding Marketing Person To Team
Advantages:
 Press likes to speak directly to team
 More connected to your mission and
projects
 Quicker response to communications

69. Adding Marketing Person To Team
Options:
 Bring on a part-timer early on
 Or give duties to someone on team with
good communications skills
 Set up a general email account so different
team members can respond

70. Away Mission
Determine the best way to get your game
published.
 List 3 advantages of traditional publishing
 List 3 advantages of self-publishing
 Explain which is better for your game and
why