A company has shown interest in investing money and resources into my game development company. There is no set dollar amount on what they will give. It would be easy if they would say "we''ll give you $10,000 and we want $15,000 back". It''s more of a "we''ll give you this to start with and later we will give you more". They won''t tell me what they want in return, they want me to tell them what it is worth to me. They are going to let us use their office space and licenses for 3D Studio Max, Photoshop, etc. along with giving us some money for funding. My problem is I don''t know how much to pay them back and when to pay them. Should I say "well I''ll give you X amount for the resources and I''ll pay you 150% when the company becomes profitible", or "I''ll pay you back what you gave me plus interest". How should I work this?

OK, First of all, you need to know what toy think you can make from the game. What is the target market, what will it pay, how much will it cost you to make it (There are loads of good articles on this here and on Gamasutra).

It''s No good you asking for $10,000 if you go bust before the end of the project. Once you know what it will cost you to make (don''t forget to add on a contingency - say 20%) Look at wjhat you want to gain. Is this just to get experience, is the company going to have a future after one game (you''ll need money to keep selling the game and start work on the next one, don''t forget all the work you haev done so far probably hasn''t been in a budget anywhere.

Then, You have to negotiate. Before you talk to them, decide what you can bear (worst case) to give up, i.e. do they get a % in the comapny and all profits (and so have an interest in making the game work, but may then want to sell you out), do you pay them back a fixed amount, in which case I''d say look at what you want, add in the interest that money could earn in the bank - That will be considerably lower than what they want back, after all it is their cash and their risk. Don''t go in and give them your worst case, try to decide on a case that is good for you and them (but slant it towards you slightly) and then go negotiate. Don''t negotiate on their terms if you can help it, either do it at your place in your time, or ona Neutral ground.
You don''t want to jerk these guys around, they are offering to help you so be prepared to give some up so that they can benefit, but they have to see that you need to eat / sleep and maintain some credibility too. Also, don''t ever negotiate based on future returns of your second game when you haven''t started it, a lot of things can happen. If you write a best seller and have given up the sequel rights for peanuts,think how much you''d kick youself !

Before you go much further, hunt out the articles on this forum and on Gamasutra, like I said before. Theres loads to think about I haven''t touched on.

Good Luck, and keep us infomed if you get on, your experience will prolly help others in here :-)

Bp.

Thank you both for replying. Your posts are very helpful.

Obscure > i have just seen your website, which is very very professional. i was wondering if u could provide a bit more info on what are "sub-licensing" , "subsidary rights", and "sequel rights", rather than i make the obvious assumptions.

[edited by - edwinnie on April 20, 2002 12:39:39 AM]

erm..ok...

are developers allowed to use software that are "non-original",
as maybe the publishers have proper licenses for the software.

who gets the blame, the publisher or the developer?