Do percentage royalties actually work or is it a scam used to get free labor?
There’s been at least 5 posts in the Commercial section by people offering royalties to artists or programmers.
In a number instances, they form an LLC (which costs money), have full time jobs, and purchase a website and domain, but claim they can’t afford to pay their artists.
I’d like to hear from artists (or programmers) who have worked on royalty projects that actually went to completion, are on sale, and actually making money from the sales.
Rule of thumb, only do a percentage royalty if you are willing never to be paid.
That isn’t too say you wont be paid, it is just very unlikely unless you know the team extremely well, they have a history of financial success, they are providing more to the project then you, and they have skills other than managing the project.
If you want to join up to sharpen your skills, feel free to; but ultimately it is safe to say you won’t be paid for the amount of effort you put in.
It is considered a scam IF there is no contract and no promise on any payments.
Also you should do due diligence. If it talks like a duck, quacks like a duck…
The % on royalties are only for investors, publishers and expert-level people who have pre-agreed and enforceable contracts.
Usually, there is some collateral involved - e.g., a physical property - a car, a house attached.
If the person does not pay, you can take away that person’s car or house as payment for work.
I never ever succeed with a “royalties” work. However I still don’t see it as something impossible: as redcap already said, if you know the team, you know you are capable making the project, and so on, it can work. My wife once did a graphical work for royalties, but that wasn’t a very successful project, and she didn’t got a lot of money.
The problem with royalties that
if the project gets cancelled (which is often, for a lot of reasons, especially in an internet “lets make an rpg” groups), you don’t get paid
if the project is a failure (which is also often, 50% of iOS projects don’t even get their cost back, or so), you get very low amount of money
(3. it is a pain tax-wise to keep track who gets what royalties for years; it is much easier to just pay a flat price I think.)
So it is most likely not a scam, because there is no malicious thought behind it, but it has a very low chance of working, and about 0.1% chance in an internet collab project. No, I am not exaggerating, really one project for every thousand started gets somewhat finished (at least this is my impression).
If they can’t pay a team up front and can’t convince people who already know them that the project is a good idea, what do you think their chances of success are when they’re relying on free labor from the internet?
If they had a track record of the kind of success required for royalties to be worth having then they most likely wouldn’t have a problem ponying up the cash to pay you for your time.
The chances of success are very slim. Do reconsider this kind of payment as most probably you will not get paid.
What kind of sums are involved?
If it is small money, you’re going to have a hard time collecting payment if that person is out of state and uses multiple aliases.
I don’t have a contract with the person I’m collaborating with and It’s a 50 50 royalty. I made payment on everything and those payments were not small amounts either.
But personally I wouldn’t recommend it, I know myself and he took a leap of faith with me. Having a contract is a good idea. But there is many reasons not to do royalty.
If your approach is “we’re making this game together as a hobby” then yes, it’s good to keep that in mind.
But if you’re trying to make a living from freelancing what does it matter that someone else also doesn’t get paid?
It won’t pay your bills, it won’t give you satisfaction or return the time you spent working on the project.
“royalties” alone does not belong in the commercial section. That is a collaboration. I tried to get involved with some people’s projects and I found their idea of how royalties would work to be highly selfish or naive. One person was already thinking of himself as a CEO and he thought giving 5% to each team member and giving himself 60% would be fine. Needless to say I wasn’t interested. Still I think royalty splits can be fine.
Here is my philosophy on how a good royalty split plan should work:
-Everyone at this stage is considered in on the ground floor, all royalty splits are equal between members.
-A solid GDD with production calender is established with clear goal post.
-If members can’t/won’t contribute the minimum they will be kicked, no royalties. (If you want the big payoff, work till the end.)
-Money should be set aside to reward members who meet or exceed goal post.
-Working a limited commission system into a royalty split helps give the project validity.
-Excellent leadership skills and charisma are needed to make this work. You have to encourage and stimulate members.
Over 60% of the apps in the app store dont even get 1 download, 2/3rd gets less than 1000 downloads in a year. that means your app has to be better then 2/3rds of the apps in the app store and probably in the top 10% to get any real money You are taking a risk, but there is also a reward, if you want the low risk medium reward take the safe and easy route get a regular joe job.
No. They should only be willing to invest in it if it makes sense. Just because it’s theirs is no reason to poor hard work into crap. If they’re talking about royalties, they expect to make money on it.
So again, the other person is trying to make money as well, so if it fails he doesn’t get paid either.
You realize most indies have 0 money right? Besides the big publishers, there is basically only “fund it yourself” type of thing (so unless they are sitting on a pile of cash to throw around, working for percentages is the way).
Problem is, most people coming onto projects like that are flakey. They come and go all the time. They get bored and leave, or start being really slow, or just vanish one day.
There are a LOT of dreamers… very few do-ers (on both sides of the fence).
Basically, find people you can trust and who look real. Find people bringing work to the table in a serious way. And team up and make a game.
Like I said, there are a lot of dreamers and flakes. Chose who you work with wisely and it can pay off.
It does work, but it is hard to find a project and Team that you can trust.
We have worked on a percentage share for about 2 years now, and everything works well. Obviously, we set up a LLC and we set up contracts between each other. But besides that, the most important thing is that you trust the people you are working with. You really need to trust them. It does not help if you have a contract and still do not make any money. Percentage shares should be equal, and most importantly, no one in your team, including yourself should loose the will to work. The money you get out of this depends on the time and money you invest into the project.
As I said, we are 4 people that decided on a 25% share, formed a LLC (under dutch law) and by now we sold about 300.000 copies. It was hard to form that team though. In the beginning we were about 9 people, but we had to get rid of all the people we did not trust or we knew were not willing to continue this project for a long time. Find the right team and find inspiration, otherwise it is going to fail.
Everyone has different work loads and responsibilities and situations.