Peanuts and promises – how board game designers get paid
This question comes up from time to time – just how do board game designers get paid? So, I’d like to get into this and clear up any misconceptions out there. First off, the headline here is meant to be comical. Of course, we don’t actually get paid in peanuts and promises, but some may feel it’s not too far off the mark. There are very few game designers who can make a living doing this full-time without any other source of income. They always say that it’s hard to make a living doing this due to the payment structure, long development timelines, and uncertainty. You just never know when your next game will get signed, how many years it will take after this time before you see your first nickel for it, or if your game will do well (or even see the light of day!). I’ll start by saying there is a distinction between freelance game designers and game designers who work in-house at a game publisher. I’m the former, as are most game designers, so I will focus most of my attention here on freelancers. In-house game designers I will say a quick piece about in-house game designers. Like in most companies, this position would be paid either by the hour or the individual would be on salary. You’d take home a regular pay cheque just as you would in most jobs. Some of the larger publishers have their own staff of game designers, whereas with a really small publisher, and I’m talking where this is a one-man show or it’s run by a couple of people, the owners may do everything, including game design. But many of the small to medium publishers look outside their walls to find game designers with great games. Freelance game designers This is where freelancers come in. Freelance game designers create games on their own and pitch them to publishers in hopes of getting their game signed. If a publisher likes what they see in a game and are interested in working with the designer, they will take a prototype and do further playtesting. They may or may not ask the designer to do some more development work, but ultimately, they will make the decision whether or not to sign the game. By signing the game, I’m referring to the process of the publisher offering a contract to the game designer for the rights to the game. Once the details have been ironed out, if the designer signs the contract with the publisher, typically they will have agreed to be paid in royalties. Getting paid – how royalties work So, let’s say you’ve signed your first game with a publisher. Congratulations! That’s awesome news. But how and when we see any money from this? Each time a copy of your game is purchased, a percent of this sale will go to you. But don’t worry, you won’t be receiving cheques for $0.12 every day. Instead, these royalties will be banked up and paid to you regularly, according to the agreement in your contract. You can expect most publishers to pay this on a quarterly basis, usually within 30 days from the end of the quarter. They should also be able to provide you with details on the number of sales of your game each period. How much you earn from royalties depends on the details of the contract. Typically, publishers will pay between 5-8%, but keep in mind that most base this on the wholesale price of the game, not the retail price. The wholesale price of the game is normally 50% of the retail price. So, what would that mean for you? Let’s say your game was selling in retail for $40 and your agreement pays you a royalty of 5% on the wholesale price. Let’s say that wholesale price is $20 (50% of the retail price). That means you’d receive $1 for every game sold (5% of $20). If they managed to sell 1,000 copies that quarter, you could expect a $1,000 royalty cheque for that three-month period. But what if your game sells next to no copies or the publisher changes their mind and decides not to produce your game (keep in mind either of these scenarios can definitely happen). Well, you might have been lucky enough to receive an advance against royalties, also just referred to as an advance. What the heck is an advance? An advance means that the publisher will pay you up front some set amount of money for the right to be able to publish your game. Now, keep in mind that this an advance against royalties, so you will have already received your payment of royalties based on some set number of game sales. Let’s look back at the previous example to show how this works. Say your publisher gives you a modest $700 advance against royalties. In that first quarter, 1,000 games were sold, netting you $1,000 in royalties. But you’ve already received a $700 advance, so the first $700 of these royalties was already paid to you up front. That means your first royalty cheque would actually be $300. You still made the same $1,000, you just got most of it up front. The good news is, even if they only sold two copies, you’d still get to keep the $700. Now, keep in mind that not all publishers provide an advance. This is usually limited to the larger companies with a much bigger budget. If you sign on with a small publisher and your game will only be their second game to go to Kickstarter, don’t expect anything up front. They will be running the campaign to gauge interest and gather the capital necessary to get the game manufactured in the first place. You may also be fortunate to have a publisher pay you a small amount in order to hold onto your game for a longer evaluation period. You may have an agreement with them that they have three months to review your game, but if they need more time then they will have to compensate you for this. Again, this is more likely to happen with a larger publisher as opposed to a smaller one. However, you’ll want to set limitations on how long they can hold your game as well. If they take forever to get back to you, you may be missing out on an opportunity with another publisher. Other Alternatives While the arrangements above are the most common ones, you may also meet some publishers who offer you a different method of payment. In particular, a small publisher who is just starting out may want to have you more involved in the project to have more hands on-deck, as running a Kickstarter or otherwise getting your game published can be a lot of work. They may agree to share some portion of the profits with you, at least for the initial print run. Or they may make some other arrangement. This could be more profitable for you but may also take more of your time. Increasing royalties Some publishers may also agree or will already have something in place to compensate you even better when sales are really good. You may be offered 5% on the first 5,000 games sold, but this may increase to 6 or 7% for any sales above this. Do you have any questions about how board game designers get paid? Have you seen any other interesting arrangements? I’d love to hear from you.