Mobile Games Blog

Understanding a Publishing Contract for Mobile Games

Understanding a Publishing Contract for Mobile Games

If you’re thinking of approaching a Mobile Games Publisher to distribute your content and gain the exposure of millions of mobile gamers then there are a few things you need to know that will be important when you sign your Publishing Contract.

What Value is the Publisher Offering?

It’s the publisher’s responsibility to drive unit sales for your app. There are a few ways the Publisher may decide to accomplish this. Take note, Publishers cannot guarantee unit sales or downloads; factors like negative reviews or poor product positioning can greatly diminish the overall impact of these marketing strategies. It’s important that you work with your Publisher to properly position your game prior to launch.

Media Buys:

A Publisher versed in media buys will know which mobile ad networks and RTB exchanges will generate the highest yield given a marketing spend and the target demographics of your game. This is of significant value to a developer who may be an expert in building product, but lacks the internal know-how to accomplish the same yield.

PR

Publishers who frequently and systematically release content throughout the year have developed media relationships that make it easy to generate press interest for your game.

Cross Promotion

Delivered in the form of interstitials or in a self hosted cross promotion network, this powerful promotion delivery mechanism benefits from massive sample size and economies of scale. Understand the Publisher’s reach by asking for transparent details on their cross-promotion capabilities.

Email + SMS Marketing

Curated email lists from games that show an affinity to your content is a sure fire way to drive interest, brand recognition, and unit sales to your game.

OEM Features

Publishers that have formed relationships with the OEMs (Apple, Google, Amazon, Microsoft) can influence (not guarantee) prominent “featured” or “new and noteworthy” features from these OEMs. This organic discoverability on app stores has the highest yield of any marketing activity and is something that the Publisher should aim for.

What are you giving up?

In most cases you’re giving up two things, a set percentage of the revenue incurred by your licensed product, and the right to distribute and market your product (depending on the deal). In licensing circles it’s generally accepted that this scenario could be “exclusive” or “sole”. In an exclusive license, only the licensee (Publisher) has the right to make use of the intellectual property. By contrast, in a sole license, the licensor agrees not to grant any additional licenses but retains the right to make use of the intellectual property.

Choosing A Publisher

Choosing a publisher that is the right fit is the most important decision you need to make. More often than not the right fit may not be the largest publisher, but the publisher with the most direct audience match to your content. There are a few high level matches you should look for, each of which will have significant impacts on device penetration, daily play habits, and commerce potential.

Audience match by Demographics:

Demographic matching has the greatest impact on play habits, if you’re interested in learning more about Demographic profiling check out this post on demographic trends in casual ,mid-core, and hardcore games.

demograpics

Audience Match by Location:

Location matching has a strong correlation to device penetration an commerce, if you’re interested in learning more about Location profiling I plan on talking more about it in a post to come.

location

Audience Match by Gamer Type:

Gamer type matching has a direct impact on the type of content you produce. Depending on the “gamer type” target your games core loop, hooks, and retention mechanics will have been architected in a variety of different ways. If you’re interested in learning more about gamer type profiling I plan on talking more about it in a post to come.

Casual Gamer:

A player whose time or interest in playing games is limited. Casual gamers tend to play games designed for ease of gameplay and don’t spend much time playing more involved games.

Core / Mid-Core Gamer:

A player with a wider range of interests than a casual gamer and is more likely to enthusiastically play different types of games

Hardcore Gamer:

A player who extends gaming into their lifestyle and may represent the stereotypical “game geek”.

The Publisher you choose should have an existing presence and large audience playing their existing games and those games should fit your licensed products core demo, geo, and gamer type.

Accounting Standard

If you’re a small development shop cash flow will be important to sustaining your business, make sure you negotiate payouts that help you maintain payroll. A fair deal sees the Publisher paying out net 30 days plus a 30 day period to account for fraud, returns, and chargebacks. The Publisher may also require a minimum threshold before releasing funds. This would mean your game needs to make a minimum net payout  before they will pay you. (ex. $500)

Protecting Yourself With Insurance

A thorough contract protects the Publisher from legal backlash if your licensed product infringes on existing copyright, this is typically done in the form of an indemnity. If you happen to infringe on copyright when distributing a product through a Publisher you could be liable for the legal and financial reverb. Be risk averse and insure your company against this legal headache before it happens.

Ownership

You’ve undoubtedly invested thousands of man hours and considerable financial resources into your game, and ownership over the content will be important to you, however your overall yield will not be measured in these formalities but in units sold. Publishers who take over ownership of the IP over the term of your contract will be more invested and have greater distribution power as a result. Mobile games marketplaces function in a way that branded developers can leverage their organic discoverability to drive more unit sales, ease the mind new gamers, and enhance the overall perception of your game.

If you still choose to retain the IP of your title then the inherent value to the Publisher is reduced and you may see reduced royalties during revenue sharing negotiations.

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