The first thing that comes up with a Western publisher is the model: buyout, revenue share, or a minimum guarantee somewhere between the two. None is right in every case, but the maths is completely different. This article separates cash flow, risk and long-term return, and lists ten questions to ask any publisher before signing.
Cash flow under each model
A buyout (license fee) is a one-off payment from the publisher for the publishing rights in certain markets for a set number of years; most revenue after that goes to the publisher. Under revenue share the publisher pays nothing up front, funds publishing services and UA, and net revenue is split at an agreed ratio. A minimum guarantee (MG) sits in between: the publisher prepays an amount that is recouped from future shares.
For the developer, buyout cash arrives at signing with maximum certainty; revenue-share cash arrives monthly with performance, may be small in the first months, and has no ceiling.
Who carries the risk
A buyout moves all the risk to the publisher, and moves the upside with it. The subtler problem is incentive: once the publisher has paid, a game with average early numbers can lose its follow-on investment and be set aside. Under revenue share the publisher earns only when the game earns, so the incentive to spend on UA and live operations is aligned with the developer.
Long-term returns: a three-year view
A successful Western SLG usually lives three years or more, and its revenue curve does not peak in month one but six to twelve months in, as high spenders settle in. A buyout price usually reflects the publisher’s estimate of first-year profit. If the game runs three years, the developer’s total under revenue share is usually well above the buyout; if the game never takes off, the buyout was the better outcome.
So the real decision variables are two: your confidence in the game in the West, and the team’s current need for cash. High confidence and low cash pressure point to revenue share; moderate confidence and urgent cash needs point to a buyout or MG.
Ten questions to ask a publisher before signing
Our position: why we only do revenue share
Vplay Games works on revenue share only: no license fees, no buyouts, no minimum guarantees. We put our publishing services and our own UA budget into the game, and we earn only when the game earns. We state the share range on the first call, and you are welcome to put all ten questions above to us.
If you want a checklist to take into a negotiation, or want to know our share range for your game, send it over. We reply within 48 hours.
Have a game you want to take to the West?
Send us a gameplay video and a playable build. We reply within 48 hours.
