How do you make sure you don’t end up with the bad end of the deal, when negotiating? Here’s 18 great tips from some industry veterans about how to negotiate.
As a game developer, it can be difficult to deal with investors, partners and publishers. They negotiate contracts, outline terms, and make huge business decisions on a daily basis, whereas you as a game developer do that much more rarely – maybe it’s actually the first time you are negotiating with someone about your game or your team?
So to even the odds a bit, Thomas H. Lund of Full Control, and Tim Shephard from Chroma Studios took to the stage at the recently held Growing Games workshop, to give their best advice to both new and experienced game developers. How do you make sure that you get the best possible deal when negotiating with external partners, and avoid getting steamrolled by experienced businesspeople, when trying to get your game out?
Thomas H. Lund and Full Control have already released a number of titles on both pc and mobile platforms, some of it being licensed titles from Games Workshop. So they should have their experince up to par. And Tim Shephard and Chroma Studios have just released their game Click, Click Boom on a worldwide scale, and brings inside from the free2play side of the business. Without further ado, here are their best tips on how you get the most out of your negotiations and partnerships.
It takes time. A lot of time. The normal progression of a business relationship is as follows: Pitch/meetings, Term Sheet, Contract Negotiation. Signing, Contract Management, Termination. Moving from each step to the next can take as much as 6 months. So just because you got off to a good start, it still might be a year, before you have a signed contract.
Get help! It’s easy to just “sign anything” – especially if it’s your first game, and you are excited about getting money. But be careful, and get help if you are a beginner. They are doing this for a living. You are making games for a living. Get help, cause they have much more experience than you.
The term sheet is the most important item. It sets the course for the rest of the process. Things agreed upon here is almost set in stone, so get it right here, because it’s almost impossible to change later.
Be prepared. Every single time before you go into a pitch or negotiation, know everything there is to know. If you need to read up on stuff in the middle of talks, or end up in an area where you don’t know the facts, you will atomatically become the underdog.
Contract negotiations are like haggling – act accordingly, and push back! It’s like bargaining in the souk in Marrakech. Never take the first offer. You are expected to nnegotiate so ask for more than you need, and be prepared for some give and take.
Know when to walk away. Know beforehand what your breaking point is, and be prepared to walk away if necessary. Thomas H. Lund had one such experience, where he walked away from the deal. But even if he lost the deal, it gained him a lot of respect, and years later, the publisher came back to him – this time with increased respect for him and his studio.
Know what you are flexible on and not. Where to bend and where to stand firm. You can only haggle, when you know where you are able to give an inch or two, and which things you are not willing to give up. If you know this in advance, you know where you can give in a little, to get what you want from the other party.
Everything is negotiable. They might say that it’s not, and that it’s a standard contract, but in theory everything is up for debate.
Never ever take the first offer. It’s their job to get as much as possible for the money, so of course they are going to do the contract draft that benefits themselves the most. Always push back!
Always read and do changelog in the final version. Stuff might have changed! It’s binding, once you sign it. It might be intentional, but it can also happen by accident, if things get’s changed around a lot, or many people are involved in the process. Always check the final version before you sign. It’s final and binding, even if there are errors in it.
Get equal rights and obligations. What they want from you, you should get from them. That’s only fair. If there are clauses in the contract regarding, what happens if you go out of business, get clauses into the contract that state what will happen if they go out of business too.
Know which law the contract is based on. Which jurisdiction governs it? There are huge differences between continental, UK and US law.
Dont waste money on laywers. Use the right one and use him/her right – for the legal stuff, and nothing else.
Be more than one person. Being alone is dangerous. You can get tired, angry, lose attention and loads of other stuff. There is stength in numbers, and negociating is a tough job to do alone.
Negotiate with the right person – the one who can actually make the decision. Don’t waste time on someone, who is not the one to approve your project. Make sure that the people you are talking to, have the necessary authority to make business decisions.
A contract cannot replace chemistry. You have to be able to work with partners, as if there wasn’t a contract. If the chemistry isn’t there, it’s probably not a good idea. A contract can’t make up for that.
Always be professional. Even if they don’t like your game, it’s nothing personal. The games are your babies, so it’s easy to get attached to them, but you need to shed that when you go into negotiations.
No deal is done until the ink is dry. Never count on something before it has a signature. Dreams and promises are nice, but at the end of the day – if there is no signature on a contract, it’s not binding in any way.
Also be sure to chek in next week, where Nordic Game Bits will be bringing a complete report from the latest Growing Games workshop, with even more tips, tricks and advice regarding term sheets & contracts. Until then, you can also check out this Storify of the event, compiled by Interactive Denmark.
Do you have any advice regarding dealing with partners, publishers or investors? Don’t be shy. Share in the comments below.