Not that I'm trying to sound discouraging, there are always great new games popping up out there, and sometimes I just shake my head and ask "why didn't I think of that?" Where was I....yeah, you get this letter, and if you sign it, you send it in to the company with a good prototype that they play a few times, then reject with a nice letter telling you why they aren't interested (I have a lot of those) or a contract proposal (I have very few of those). Depending upon who you are dealing with, IF they are interested, then they will offer you a royalty of somewhere between 2% and 5% of retail sales, and perhaps an advance of some negotiable amount against future royalties. This may not seem like a lot, but trust me, profit margins in the game industry are very, very tight on small to medium production runs (2000 to 20000), and 2% is generous for some companies. If your game sells 20,000 copies, you can consider it a moderate success, but you won't make much money.

Another thing that will slow you down is the fact that most game companies (including myself) have a backlog of games they want to publish, and in-house game designers, so most of them aren't looking for new submissions at all. This, of course, means they miss out on a lot of neat new ideas and fresh blood, but it also means they don't have to hassle with royalties and legal issues of ownership, copyright, and "stealing ideas", so you can sort of see that viewpoint, too. Which will eventually lead us back to the section on publishing yourself.

THE DANGERS OF CONTRACT NEGOTIATION; Oddly, this is one of the touchiest parts of game making/selling. I only know a lot about this because I've had a lot of really bad contracts. It's always a good idea to get some kind of cash up front, call it a "kill fee" in case they decide not to publish it. Also, put in a limited time for publication wherein the game rights will revert to you if the game doesn't get published, 2 years is quite reasonable, I have contracts that range from 18 months to 7 years. If you go with nothing but royalties, there's a good chance you'll get nothing, because the game may never go to market (this happens a lot).

I was recently given some very good advice from another designer who I will leave unnamed here, since I didn't ask him if I could quote him. He said it's a good idea to sell either North American rights, or European rights, but not both to any one company. This is partly because if you sell all rights to one company, then they might license out to another company, and you won't get a royalty, but rather, a percentage of a licensing fee, if you wrote this into your contract. This isn't necessarily a bad thing, though...it means you only have to deal with one company and they have to go through the legal hassle of making sure the other company pays them. Doing the footwork to cut deals with foreign companies is not a cheap or easy process. Licensing fee percentages can vary anywhere from 10 to 50%, depending on expected sales and other factors (like your negotiating skills).

To go into more detail, let's say you sell your game to Jolly Games, and we offer you a 5% royalty against wholesale sales (or 2% against retail, minus freebies given out for promo), AND if we license out the game to some other company, we pay you 50% of the money we collect as a license fee. Naturally, this means you get no royalty from this other company. This is negotiable, as is any contract. You could stipulate that Jolly Games, if sublicensing to another company, require that company to pay, say, 2% royalty directly to the designer from *their* sales, thus circumventing Jolly Games (though Jolly Games would still collect some license fee for themselves). This is a pretty good way to go if you can do it. You'll also want a cut of the action for licensing any other products as a result of your invention, if you think it's that great an idea. By this I mean stuff like t-shirts, posters, movies, and the like (Pokemon is a good example for this).

Furthermore, let's say Jolly Games offers you a $1000 advance against sales (that is, this counts as your first $1000 of royalty payments when it gets published), but you, being a wise and savvy contract negotiator, insist that the "advance against sales" be paid immediately upon initiation of the contract, and that the advance will act as a kill fee if the game is not produced within 2 years, and that the rights revert back to you in case this happens.

Some of the larger companies will offer you a canned contract; you can argue some of the details, like percentages, but generally the terms of the contract will be pretty fixed, that is, a "form" contract. You won't have much luck dealing details on a contract like this. One of my favorite stories is with a company that offered me a very decent royalty (like, 5% of retail) verbally, but by the time the contract was initiated a year later, the company had grown so much, that when I got the contract in my hands, the royalty had magically decreased to 2% of gross!! When I asked them about this humongous change, the response was "well, we're a lot bigger now, so we figure with the increased sales potential, you'll realize the same overall royalty." Huh? I couldn't believe my eyes when I read this! Classic example of a company getting too big for its britches, I'll let you guess who it was!! (this was about 5 years ago).

The same game subsequently was offered to another company that didn't pay the advance on the royalty (even after the contract was signed) because they said they weren't sure if they'd produce it or not, so since there may not be any royalty, they weren't going to pay an advance. Yeah, I couldn't figure that one out, either. This tied the game up for another year and a half.

Fortunately, the game finally made it out 2 years later as "Drakon", under Fantasy Flight Games' banner, who did a very nice job of it. Be sure to buy a copy the first chance you get, it's a great little game (shameless sales pitch).

Okay, back to your negotiation process. Naturally, in amongst all your finagling, you should realize that if you insist on too much, the company will just dump you and find some more reasonable person to deal with. You should probably be pretty flexible with your first game sale, and take what they offer if it's reasonable at all, just to get your name in print. Oh yeah....be sure your name goes on the box or on the rules somewhere! Some people actually notice these things.