Who Should I Pick: Publishers or Investors? | Kadri Ugand
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Delivered at Casual Connect Europe 2016 Publishers and investors are both put on this Earth to contribute to the game developers' success. Young game studios often see investors and publishers as the saviours, that will make their company profitable in some way. The ultimate goals are aligned, but there are a lot of differences in the deals, what they are looking for, what they provide and also how they work with game studios. So before choosing, come to this talk!
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Who Should I Pick: Publishers or Investors? | Kadri Ugand
- 1. Who should I pick: Publishers or Investors? Kadri Ugand co-founder GameFounders
- 2. Kadri
- 3. MENTORS PARTNERS PLAYTEST DAYS BOARD MEETINGS PITCH DAYS DEMO DAYS FOLLOW-UP SUPPORT INVESTMENT $£€ STUDY TRIP GameFounders
- 4. I want to make 10x return on my investment in 5 years. Investor I want to make 1M this year. Publisher
- 5. Game vs team • Soft Launch numbers • Market and portfolio fit • Sequel or Known IP • Previous positions at companies • Portfolio • Previous co-operation
- 6. Services vs capital • PR and marketing • Monetisation advice • Launch assistance • Development funding • Marketing funding • Advice and network
- 7. Revenue share vs equity • % of game revenue • First xx lump sum revenue? • Rights to sequels? • Share in the company • Non-compete clause • Lock-in clause
- 8. Short vs long term • Contracts game-by-game • No guarantee of next contract • Shareholder until exit
- 9. Regional vs global • Can carve out a market • Can carve out a platform • Localization! • Share in the company
- 10. INVESTORS PUBLISHERS Decision criteria team game Earnings from equity revenue Provides funding yes rather not Provides services advice yes Success criteria company success game success Geographical coverage global regional/global Duration long term short term Recap
- 11. Bad Seed Entertainment Milan, Italy Investors: • GameFounders • Mind the Bridge • United Ventures Publishers: • PocketGems • Ayopa Case study #1
- 12. Bitcake Studio Brazil Case study #2 • Publishing deals by platforms and regions • Accounts grew from 10k to 800k
- 13. Tiny Lab Productions Vilnius, Lithuania • 1 game with Bulkypix NOW • Self-financed • Self-publishing Case study #3
Editor's Notes
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- Investors look at the team they invest in, publishers look at the game and it's potential. If you have a team that does not have any track record and you have not published a game before, it might make sense to use a publisher to learn how to launch and market and use that experience in the future. If you have published a game and can show great KPIs or have a superstar with track record in your team, you are more likely to be able to raise money from an investor. <number>
- Investors provide you with capital while most publishers provide you their services in marketing your game. You can have a financial investor with only money or a strategic investor, that will also be your mentor of sorts. Either way you will have resources to finish your game. While publishers used to provide game developers with development money, it is not common practice any more. This means you need to have money to develop the game yourself. Publishers mostly offer you their services in launch, marketing, localization and community management. This is a good opportunity to see the pro's work up close and learn for your next games. <number>
- Investors take a stake in your studio while publishers take a share of the revenue you make off your game. Investors will get their money back when a larger investor shows up and buys them out. This means the moment you give equity to an investor, your company is up for sale. Might sound scary, but that is what you ultimately want as well, right? Publishers make money when your game makes money- they take a cut from the revenue. This means if you make money they make money and also if your game does not make money, they will drop it. <number>
- Investors will remain with you until a bigger investor comes along, publishers are usually with you until the end of the life cycle of a single game. This is the reason why you should choose the publishers carefully but the investors with even more care. Publishers sign only one game with possible claim for any sequels, prequels or new platforms. Be sure the partners you choose have the capability to work with all the aspects you sign over and also how to exit the contract with minimum loss. <number>
- Investors will work with you globally as publishers usually have a regional strength they have carved out. No doubt there are publishers that work globally and do it well. There are also publishers that have defined a market (like China, Japan, US), platform or target group for themselves. It depends on the appeal of your game if it makes more sense to go with one or the other. The regional focus will make it possible for you to work with multiple publishers at the same time maximising the global success of the game. Investors will always work with you globally, so do the same thing- make sure they can be useful for you beyond the money in all the regions you plan to publish your games. <number>