Hey guys,
Just been noticing a lot of royalty based projects popping up now and then (note: they’ve probably always been there). And I was wondering, how can project leads/managers, ensure that members will work with the project, not keep their assets to themselves, and stick with the project. Are there any legal documents created, or specific format of agreements that are adhered to? More importantly, is it a viable option?
What’s your experience with royalty based projects?
Alec
One downside to royalty only payment is it does not put food on the table during development. If you put money in someones hand they will feel like they owe something back.
IMO if you know the people very well and have a trusting relationship then maybe, otherwise no.
“Royalties” is code for “unpaid”. 99% of the time anyway.
–Eric
First let’s see some royalty projects get-finished, let alone make a profit worth arguing about 
My thoughts exactly in terms of “unpaid”, its unfortunate that its not as simple as that.
Generally – royalty payment generally means they are underfunded/have no funding, and generally means they are starry-eyed enough to expect such a good profit that it would be worth someone’s time investment. Usually these two together is a recipe for a project that will not get finished, as it’s likely a gross underestimation of what actually needs to be get done.
Can it be done? Yeah, if you have a pre-existing relationship with someone before even entering the project. You should draft up some sort of contracts if you’re worried about the integrity of everything, as written contracts are required if a project will take more than a year. Would I recommend ever taking one as a contractor looking for some type of work? Absolutely not, ever.
This.
Can anyone on these forums post their success story on a royalties project? Would love to hear about it. And the methods they used.
@Alec, I think the most important thing when working on a project of this sort is to have everything in a source repository checked in daily. This is good for tracking progress, and of course nobody can just dissapear with assets if everything is setup correctly.
There are cool sites with built in collaboration such as bitbucket where the project owner can give permissions to other team members and there are issue trackers which help the team keep up on objectives.
you can make a contract. You can find some generic on the net (for example on elance there is some contract example).
You should also write the condition for them to keep their share in the project. Prepare the case when they will quit (and they will).
Also prepare the case when they will quit after the project is finished (if they don’t work on updates, will they get any money from the sales increase ?)
If you think sharing royalty will motivate people you’re wrong. They can earn more but they share the risk too. And they don’t owe you anything.
Most of the time it’s unexperience people that accept this kind of deal and they are usually more incline to quit or doing bad work.
Most sharing royalty project on the net → falling.
The best solution is usually pay them full. But you can make a deal with pay them less + share.
And it’s better to have one experience guy paid than 10 newbies with a royalty shared agreement.
I think royalty is code for scam haha!
Also, most of those games are also SUPER BIG projects… FPS, MMOs, Adventure games, those little words? they mean at LEAST 6+ months of developing guaranteed if you’re experienced, most likely 1+ year. Who’d work that long under no pay?
There’s never a small puzzle game for iOS, that require 2 or 3 people to make, haha! Oftenly what they… “need” is all kinds of people: modelers, animators, designers, coders, coffee bringers, the whole thing! That makes no sense, that’s how super big companies work, but those are ran by people with years and years of experience!.. oh and they pay a salary!
Maybe there are some exceptions! Like if some friends… (geeky friends haha) who know each other from a long time, they all have the same idea, and they all decide to make a game together, perhaps not even thinking about money, and when they finish it, they profit from it and split the royalties? But they don’t ask random people they don’t know to work for them in exchange of “royalties”…!
In these forums, I think offering royalties = “I don’t have a clue what I’m doing and want people to help me for free.”
It’s an honor system you won’t be able to enforce. Most of these people won’t sign anything, and the ones that do may still not take it seriously.
Even if you had a contract and they took it seriously, it would be hard to force anyone to pay. There are costs incurred during development and they can claim they don’t have to pay royalties to anyone until they turn a profit, i.e.: until they make back all the money they spent in development. If they buy a new 5000 computer, and claim to have paid some of the team members’ money, buy Unity Licenses, some software, etc. etc. They can ramp up their production costs quickly and claim you won’t get royalties until the game turns enough profit to cover all those costs, and unless there are very specific stipulations in the contract saying they have to pay you royalties from all collected money, you won’t have any legal grounds to stand on.
Even if you were in the legal to fight it, you may not have the money to afford taking legal action.
So in closing:
Only take royalty based deals with people you personally know and can work with face to face.
Only take “royalty based” online offers if you don’t really care about any profits and just want to do it for the fun of it. Don’t even expect it to make it into your resume as such projects nearly never make it to completion.
Actually I would define it different. I run one of these projects and I wouldn’t call it a “scam”. In our project there is no predefined split. Its a matter of effort and its a matter of how many contributors there will be. You shouldn’t see this as a job, its a hobby project that is not planning to be freeware. If you think its a cool project and you want in then you should join, if you need something to pay the rent then you definetely shouldn’t.
In case I ended up with a commercial success and I didn’t share the money as previous stated then the foundation for the copyright is pretty much void, you don’t get copyright simply from saying you got it. You get copyright cause you A you created something, or B was given copyright from someone who already had the copyright. And since you promised payment then the deal is actually off in case you don’t pay up.
I’m sure any lawyer will say its a very good idea for all parties to draw up a bullet proof contract. I wouldn’t like to get sued by some guy who created a tiny leaf mesh that we use somewhere on some shrubbery who argues that our entire success is based on his leaf mesh and he didn’t get paid. So we end up without a contract; having to trust each others. Believe me if I could afford it I would much rather pay people up front and own everything. But this is the only way I can get to work on this project with some other skilled people and create something fantastic.
Not true. You get copyright because you created it, or someone created it while working for you.
You can’t actually give copyrights away, and I think you can only sell the rights for a limited time; you can’t even permanently sell the rights.
Only way to sell the rights would be if they belong to a company and you sell that company.
If the game is being worked on as a company and the game will be released under something like “Bablesoft Games” the copyright will belong to “Bablesoft Games”.
If you want to make sure that someone working for you retains copyright for every member to retain copyrights over every bit of code/art they produce, you must put it in legal writing since while working for the “company” it is considered company property under work for hire clauses otherwise.
No sure where you are, but in the US, It’s only “work for hire” if you’re an employee of the company. None of these “royalty” deals would fall in that category, because there is no company-employee relationship without salary.
Just draw up agreements giving you rights to use/distribute the work. If it goes to court, you would need to show that the agreement had value to both parties. Usually this means that you paid for it. I am not a lawyer, if you need real legal advice, go see one.
Work for hire does not have to be an employee of the company. As the name implies, you can be hired to do the work. And by hired, it usually means you are compensated for your work. Royalties are a compensation.
You MAY be able to go to court and fight this if the terms are not clear enough, you may be able to argue that your “royalties” are not a compensation but instead owed to you due to your percentage of ownership in the works, but it will involve layering up and going to court.
Look at comic books for instance. No comic book artist is an employee of the Marvel or DC. They are all just paid to do the art. The artists do not keep the right to redistribute the art. It belongs to Marvel or DC now and only they can reprint it.
On a similar note is music. This one is a much more gray dealing. They don’t hire the artist. They don’t pay him either. They work entirely on royalties (closer to what we are talking about here) but the music belongs to the studio that is paying up for all the production and marketing costs.
You can get rights because: A) You made it or B) Someone gave it/them to you.
???
I see no reason you couldn’t ‘permanently’ give the rights away - within the lifespan of said rights of course.
While I agree that not paying them for the rights may cause problems - it’s by no means necessarily.
Yeah, it’s not always a scam! That was kind of a bad joke!
There’s nothing wrong with a bunch of dudes who met online aiming to make a game and split royalties. That’s awesome! And if they manage to build at least some demo, it’s great! Hey, maybe after that might put it in kickstarter.com and start getting paid.
But some people, in the other hand, will waste other dude’s time with no remorse! Because they simply want to be “the boss” for a while! Except they most likely wont pay anyone a dime!
I am not sure of the exact sketching of the law, but it is a clause to protect creators that, at least at the time when publishers had the strong arm and there was no internet, were able to bully any creator to just give away the rights to their IP.
I’m trying to look for sources now, can’t find it in clear writing and I may be partially wrong (you may be able to transfer copyrights under US law with extensive legal documents.)
I am not wrong on the work for hire issue, though. If you create something while working for someone under some compensation, it will belong to them.
In the worst case scenario of me being wrong it would be:
a) You made it independently, outside employment.
b) You made it for someone else, with compensation.
c) You sold ownership.
B is my point of argument here, though. You can’t just hire people into your project, say you will pay royalties, and mislead them to think they will co-own the work without a contract in place to make it clear. If your studio ever changes hands, you are (not necessarily intentionally) setting up everyone that worked for you up to be screwed by the new owners.
OK here I found something:
http://www.copyright.gov/circs/circ1.pdf
This document goes through a lot of the basics, but I think even with it you may need a lawyer to get the full certainty of things.
In page 6 you will find mention that just like any other ownership, you can transfer copyright ownership. However that same page, bit under, gives a lot of conditions on how transfers can be terminated, although it can’t be done immediately or at a whim.
Here is the topic specific text:
As I mentioned, at least in the US, huge chunks of the copyright law were rewritten to protect creators from being bullied or even mislead into giving away their copyright. I think 35 years is a bit excessive but given how most treat such transfer as a “sale”, it may be more than good enough (just not good enough for the purpose of protecting creators from accidental or mislead transfers.)
The law is also careful enough on dictating that the “author” (I tend to call it Creator since author feels restricted to writers) is “…either the person who actually created the work or, if the work was made for hire, the employer or other person for whom the work was prepared.”
Again goes to the point on topic: work is being prepared for some one else, in exchange for royalties.
I don’t think most people who try this route are being malicious, just naive. They genuinely think their project will be a best seller and will make everyone involved rich. Of course I think that anyone who joins one of these projects expecting to actually get paid is probably just as naive. Not saying there is anything wrong with that. If their naive enthusiasm becomes a lesson learned, it’s worth it.
If the project gets finished and you don’t get paid you can sue as your work is used without compensation (but only if you have documents and/or another proof, word alone won’t stand in court)
If on the other hand your assets never see the light of the day you get nothing simply because royalties imply a piece from sales. And if there are no sales, there’s nothing to piece.