Game industry professionals gathered on Tuesday, February 15, at Bungie Studios to discuss partnerships and negotiations during the second session of Washington Interactive Network’s Game Startup 101 Workshop Series. Panelists included Ed Fries, founder of Figure Prints; Jeff Pobst, CEO of Hidden Path Entertainment; Brett Caird, founder/CFO of 5th Cell Media; and Kraig Marini Baker, partner/co-chair of Games Practice. Brayden Olson, CEO of Novel Inc., moderated the panel.
When making business deals and signing contracts, the panel unanimously agreed that establishing a relationship is the most important thing. Fries reflected on his experience licensing a Namco anthology sequel for PC in which Namco wouldn’t sign the contract until he flew to Japan to have dinner with the company’s CEO — even though the game was already manufactured and ready to ship. ”They just wanted dinner,” Fries said. “I flew back a day later with the contract signed. The Japanese have it right.”
Aligning mutual goals and establishing worst-case scenario solutions between partners is the secondary priority. ”Being able to step back and look at and understand why this relationship is critical to the next phase of the company, and how consistent with your business plan or the direction you’re going to go, is critical,” according to Baker. ” I think a lot of companies — big and small — often forget why they are going into business with this person. Having this negotiation ends up flushing up [important] questions.”
Pobst agreed, remarking that these negotiations often dictate the relationship of the partnership. ”Where do we want the exact same things, and where do they differ?” he asked in regards to laying out worst-case scenarios and aligning contractual goals. “Let’s admit how they differ and how to handle it.”
It’s important to come into contract meetings knowing what you want as a developer and to resolve any worst-case scenarios on legal paper. ”Understanding strategically what your goals are and what everyone else’s are is critical,” Baker said.
New companies should come in with reasonable expectations; publishers will want the IP rights from untested studios. Company that want to keep their IP rights must come into negotiations with some sort of leverage to compromise. “This is why the successful Scribblenauts was self-funded,” Caird said. IP rights will still go with the money — demonstrating the challenge for developers.
Fries added, “You have to prove you’re good at something, then try to find a match with what you’re good at and what they want.”
