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Why Atari's Pong Indie Developer Challenge is bad for developers
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Why Atari's Pong Indie Developer Challenge is bad for developers
by Brian Robbins on 02/28/12 04:29:00 pm   Expert Blogs   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

A couple years ago it seemed like everyone had a contest to create the next best game. Some of these were genuinely great for developers, and others were thinly veiled attempts to snatch up great ideas on ridiculously bad terms. Sadly, Atari's Pong Indie Developer Challenge, announced today, appears to be the latter.

I can't (and won't) try to speak to the intent of the people behind the contest. Instead I'd like to focus on the facts as outlined in the Official Contest Rules, and show how and why these are bad for developers.

Ownership of Submission: This is the first thing developers need to be aware of when considering whether or not they should enter a contest. Good competitions like the IGF, are very clear about the developers maintaining full ownership of their ideas and submissions throughout the contest. Lesser competitions will assume ownership of the final product for just the finalists and/or winners. This one however, is very clear that Atari has full control and ownership over everything you submit to the contest regardless of whether or not you make it through any of the rounds in the competition (Section 6.d-f). This means that if you come up with a great idea for a game and submit it to this competition you cannot create that game elsewhere even if you are not a finalist

For the initial submission step, this is bad enough. Where it becomes much insidious is for the 20 semi-finalists and 10 finalists. For the Semi-Final round, developers must create a playable version of their game, and provide a promo video for it. This step can require significant development time, energy and resources, yet at this point there is still no guarantee for any sort of financial reward. Atari will be getting 20 developers to spend a couple months building out playable versions of their games, at each developer's own expense. Atari will then own full rights to all 20 submissions, and only half of the developers will receive any sort of monetary compensation in return.

Misleading Prizes:
 Atari touts the ability for developers to win "up to $100,000" yet the odds of the winner seeing anything close to that are extraordinarily low. This is because for the Top 3 "winners" half of their prize money is given up front, and half is earned out in the form of royalties on the final released game. The remaining 7 finalists each receive a $5k prize, and the same split of the royalties.

Horrible Royalty Structure: Tying up half of the prize money in royalties is bad enough, but Atari takes it a step further by providing an absolutely horrible deal structure for these "winners." As a group the top 10 finalists all share equally from 20% of gross revenues received (less a number of deductions which I'll address in a minute). That 20% is split equally amongst all of the finalists, which Atari expects will be 10. Thus each individual finalist will receive the prize money indicated previously, and then 2% of gross revenues received from sales of the game. The final game would need to gross $5 Million in the first year, in order for the Grand Prize winner to receive their full $100,000 prize. 

Yet it gets worse as Atari has even more limits in place. The "winners" only receive royalties for the first 12 months the final game is on sale. As such the developers lose out on all of the long-tail revenue a game like this could earn over it's lifetime. For many games that revenue is minimal but for the kind of title that could gross $5 Million this revenue after the first year can be very significant.

Further, the royalties are capped for the top 3 winners (the contest rules do not state if the other 7 runner-ups have a cap). So if the game does actually become a hugely successful hit, the upside for the developers is limited to the $25-$50k they "won" already.

Finally, Atari has a number of deductions they take off the top before calculating the Gross Revenue they share with the developers. Many of these are somewhat standard in publishing contracts, but the biggest one to be concerned about is marketing costs. Every dollar that Atari spends promoting the final app gets deducted off of the gross revenues, before the developers see their share. In effect, the developers are being forced to pay for the basic function that a publisher performs (marketing).

If this were a typical publishing contract, there's no way I would recommend any developer to sign these terms, no matter how desperate or cash strapped they are.

To recap: Atari's Pong Indie Developer Challenge seeks to get all entrants to give away game ideas to Atari that Atari can then exploit, and the entrant relinquishes all further interest in the idea. Atari then selects 20 "semi-finalists" to put months of work into building out their ideas into playable versions that Atari has full ownership over. Half of those finalists will then receive a modest $5k payment for putting in even more work to complete their game. Finally the Top 3 "winners" will receive half of the advertised prize as a result of all their work, and are then subjected to a horrendous royalty structure as they seek to earn out the rest of their awarded prize.

Atari wins big as they get to cherry pick the very best ideas developers submit with absolutely no risk or costs. They then stand to make a huge profit on the resulting product long with terms that practically guarantee they will be profitable long before the developers see any sort of reasonable return for their efforts.

This kind of contest preys on developers who want to jump at the chance to work with a huge brand, and think it could be a great opportunity to make their big break. The reality is that the terms of this contest, exploits developers and only provide benefit to the sponsors putting it on.

[UPDATE Feb 29] David Paris pointed out in the comments Intel's Level Up 2011 Contest. Their contest rules address pretty much everything mentioned above. Entrants maintain ownership of their submissions, the prizes aren't misleading, Intel is upfront about the Steam contract being a future negotiation, and they don't lock entrants into abusive contracts. In my opinion the Intel contest provides a much better model for how companies should run contests like this.


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Comments


Mike Kasprzak
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> This kind of contest preys on developers who want to jump at the chance to work with a huge brand

Pong is a huge brand? o_O

Okay, I am being slightly sarcastic. I'm not questioning the article, just Atari's sanity for thinking the brand has relevance today. It's a name we all know yes, but I know for many devs, Pong is the "Hello World" of game programming. Atari should look in to acquiring the rights to "Hello World" while they're at it. Yes, Pong is still meaningful to gaming culture, but that's trendy/gimmicky products like wristwatches, t-shirts and solar powered fridge magnets. I don't doubt they can still milk the brand for more gaming dollars, but I think it's telling how much weight the brand commands today given that they've turned to indies to "save it".

Indies, lets not. Your time is better spent elsewhere than rejuvenating deceased IP.

Scott Berfield
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I think it would be fun to see all the submissions they get that don't make the first cut.

Robert Boyd
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As long as you know what you're getting into when you sign up, I don't see contests like this being a bad thing.

Or to put it another way: "Oh no! Atari retains all rights to my Pong clone! Now I can't release it myself to massive success!"

As a publishing deal, it's horrible but as a contest for some kid in school, it's not bad. It's not like you'd be able to sell your Pong clone without the Pong name anyway.

Brian Robbins
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Overall, I think awareness is the biggest thing, which is the main reason behind this post in the first place. Making sure people know what they're getting into is really important.

That said, I don't completely agree with you that it's not that bad beyond it. I think they are being a bit disingenuous with how they are marketing this (win up to $100k, which is technically true, but realistically near impossible).

Further, there's a huge amount of room to tweak, change and improve on pong. If I wanted to make *just* a pong clone, then fine, but they are trying to get great ideas for how to reimagine pong and make it modern again. If you come up with an awesome idea for that, and submit to this contest, you can't build that game anymore because Atari owns it. However, you could (and I would say should) build it out on your own and as long as you don't call it Pong, you could probably be okay.

Ultimately Atari gets to cherry pick the very best ideas for how to recreate pong, and they get to do it on terms that are horrible for the devs doing the real work. . .

Michael Rooney
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@"Further, there's a huge amount of room to tweak, change and improve on pong. If I wanted to make *just* a pong clone, then fine, but they are trying to get great ideas for how to reimagine pong and make it modern again. If you come up with an awesome idea for that, and submit to this contest, you can't build that game anymore because Atari owns it. However, you could (and I would say should) build it out on your own and as long as you don't call it Pong, you could probably be okay."

Assuming you have a solid idea with a good implementation, which is more important: owning the idea and making ~$900 off of it (the average[not median] revenue from an app store game) or someone else owning the game, winning $5,000-$50,000 not tied to sales, revenue sharing, free advertising for your game, and notoriety for you?

I don't get why so many people assume that a good idea will make you $50,000 releasing independently, when the average good idea on the app store proves quite the contrary.

source on profit figure: http://www.gamasutra.com/view/feature/4038/persuasive_games_i_wan
t_my_99_.php?print=1

Peter Kojesta
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Sorry Robert, I disagree. Contests with terms like this are bad under any circumstance, because it sets a precedent for what the "market will bear".

There needs to be a clear message that putting out rotten fruit is not the way to attract developers. having negotiated publishing deals , comic book deals, and all manner of other contracts, the terms of this one are unacceptable from go; and the drawing board is the only remedy I can recommend.

As to the intent of Atari, I find it rash to speak to a group's motives; They are all generally nice people, who love and work in games much like any of us. I wish them success in their endeavors, and hope they'll consider this contest as is, lacking charisma.

Martin Goldberg
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Peter, I think that goes both ways. You also have also look at "what the publisher will bear". I think they've paid out some big bucks in the past for some flops (including horrible re-imaginations) by developers who didn't understand the IP in the first place but promised the success they're after. They of course bear a good portion of the responsibility as well, since their managment and project leaders of course apporved it. The harsh reality is a bad financial shape. Really, I think all this contest comes down to is trying to attract fresh takes and new developers in a small competition that appears to be simply geared towards a 40th anniversary promotion for the brand. Hence using PONG. I don't see it as some big scheme as some are promoting it, or as some kind of bar setting maneuver for the development community.

Robert Boyd
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But that's the thing. This isn't a publishing deal. It's a contest. It's not geared for people making a living as game developers. It's not geared towards people who are concerned about phrases like "IP ownership." It's geared towards people who are just happy making games and if they happen to get some money and recognition out of it, that's just a nice, unexpected bonus.

I agree that the whole royalty aspect of the contest was written in an intentionally misleading way but other than that, I think that just about any game contest is a good idea. If you don't like the terms, then don't participate.

Rob B
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If the precise nature of the terms are obfuscated (Which you admit is true.) then saying 'don't like the terms, then don't participate' is really obviously a ridiculous argument, and why on Earth would it matter if they were casual or professional? If they deserve the money their status in the game industry is entirely irrelevant. Suggesting screwing over people is fine because theyll be happy either way is not only daft its deeply immoral.

Tom Baird
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Similar to what Rob B said:
If it's a bad deal and exploitative to professionals, it's equally a bad deal and exploitative to hobbyist and aspiring developers, and arguing that they won't care, just means they are being successfully exploited, and doesn't mean it's a moral practice.

Even if these developers don't care about money, Atari is taking a lot from them and returning only a little, and that fact is somewhat obfuscated in the terms of the contest, something in which aspiring entrants should be informed of, before they get their hopes and end up very disappointed.

Martin Goldberg
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Regarding Brian's point about releasing it and not calling it PONG and you'd "be ok". That's actually the case, as they only own the trademark of the name. The game itself and the technology behind it was ultimately licensed from Magnavox in a settlement. The tradeoff really has to be, do you want to do a good update under the brand name. I see this type of contest as geared towards more low level and (newer) independant developers with little resources rather than studios and more established developers. While the brand name doesn't mean as much as it did at one time, it's certainly still a strong enough recognition to tie yourself to for a beginning project, and certainly a step up on distribution and presence from what someone at that level may have right now.

Jeffrey Crenshaw
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Even if some kids in school think this is okay (from a learned lack of valuing their own contributions to society, which our schools are set up to teach), it is a trend similar to the controversy over unpaid interns, globalization lowering wages, and spec work (cf. http://www.no-spec.com/faq/).

Even if you believe this is ethical because "America, land of the FREEE!" (free market, no one is being forced, whatever), then I will counter with "America, land of free speech!" And say we ethically can and logically should voice our concerns with a system that lowers the market value of our work.

The truth is there is no such thing as a "natural" market, nothing of intrinsic ethical value to support, despite the understandable appeal of calling it a "free" market; the market is and always has been artificial, blighted by lawyers and experienced businessmen using their skills at negotiating to profit off the value-adding work of others who spent too much time learning the trade they present to society to learn how to negotiate (and negotiating is not a basic skill that can be learned once, contractual norms are always evolving -- see, for example, EULA trends). So if you are one of those dopey bleeding heart liberals, you should loathe this as it is exploitative. And if you are one of those evil cold-hearted right wingers, you should despise this as it lowers the market value of your wages in a manner similar to illegal immigration. The only ones who should be happy about such exploitation are Atari stockholders; they can use all the good news they can get ;)

Robert Fearon
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@Robert

"This isn't a publishing deal"

Except it is, really, isn't it?

I mean, you come out of it with a contract to be published by Atari as part of their Pong Pak. So, they're treating their end of the bargain as a publishing deal with a contest element for publicity purposes so why shouldn't devs treat it the same?

They're also offering (although on skipping through the rules, I couldn't find much mention of it which is even more curious) a long term publishing contract also. So at what point do we draw the line here between competition and doing spec work? And if Atari aren't really drawing the line, why should we?

But regardless, I don't think it's ever a good thing to teach people that big corporations who can afford to pay for work can get work from people for nothing and continually profit from that work whilst implicitly limiting the awards the creator receives in such a manner. It's never good to teach people that it's ok for big companies to use exploitative terms in contracts even in competitions with people who might not care for the business side of things entering.

These people who are just leaving school or aren't as business aware or are hobbiests shouldn't be used as fodder for corporations to profit from simply because they may not be that interested in the business side of things.

There's nothing good about this and nothing good can come from it for anyone but Atari because the T&C's are that screwed. Even the timescale to complete the project is pretty obscene (yes, even allowing for it "just being Pong").

When the terms are this weighted against the person entering, when they're as punishing and one sided as these terms, that's not an opportunity for anything but entering into an abusive business relationship with a company. That's indefensible in my book and writing it off as "just a contest" even though the intention may well be sound on Atari's behalf, is dangerous.

All this, of course, is ignoring the irony of a company that's spent a great deal of time with legal asking the very same people they'd C&D in a heartbeat to write content on spec for them too. That would be vaguely amusing if it wasn't kinda embarrassing.

Jane Castle
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Atari is just getting kids used to working with publishers and the console manufacturers. They are conditioning them with what they can expect when they work with these two entities as professionals in the future! :)

Michael Joseph
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Reads like the scheme concocted by a Dastardly Whiplash....

http://tvtropes.org/pmwiki/pmwiki.php/Main/DastardlyWhiplash

If everyone dealt in fine print, the world could not function. Fortunately the majority of folks are not constantly trying to hustle the next guy. They're the ones preventing everything from just flying apart at the seems.

David Paris
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How do you feel about the terms on the Intel LevelUp 2011 contest that is currently open as well?
rn
rnIt also contains a clause that allows them to distribute and reuse your submission for free as much as they choose.
rn
rnIt looks ok to me on the surface, as long as you make sure to completely cripple the version of the game you send them to be a clear DEMO ONLY type version. Did I miss a gotcha here?
rn
rnhttp://software.intel.com/en-us/articles/level-up-2011-terms-and-
conditions/

Brian Robbins
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After quickly skimming through it, the Intel contest looks great! 8.a says that they do not claim ownership of anything you submit, so the game is still YOUR game to do with as you please. The prizes are straightforward with no restrictive earnout period, and while they say you could get a Steam publishing contract, that's subject to further negotiation with the winners.

Overall, the Intel contest rules look a lot closer to the way contests should be done, as opposed to the way Atari has chosen to handle theirs.

Akeem Adkins
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First I feel that it's all about fully educating yourself about the challenge. READ EVERYTHING! Granted the terms of the contest are rough, it all depends on what the person is looking for. It could be useful to add to a resume if you win, you could get a little pocket money, or just enter for the spirit of competition.

Andrew Long
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Hey Brian, where were you when Unity promoted a similarly nefarious "contest"?

http://blogs.unity3d.com/2011/06/05/developers-wanted/

Brian Robbins
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Sorry, but I wasn't aware of that one at the time. In taking a quick look at the forum posts (the actual contest details seem to be offline), it doesn't look great, and it wasn't as good as the Intel contest terms are, but it still wasn't as bad as the Atari contest.

With the Glu/Unity contest the grand prize was a Glu publishing contract which they say could not be negotiated. However, the winner wasn't forced to agree to that contract just by entering, and everyone (except the winner if they agreed to the contract), still owned the rights to their submission. Thus if they didn't win, or didn't like the contract terms they could go release it themselves.

In contrast with this Atari contest all entries become the property of Atari, and they can use your ideas freely, even if you don't win.

Michael Rooney
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Am I the only one who thinks $50,000 for 5 months of work is a lot of money? I would gladly be ripped off by being paid such a sum.

Andrew Sipotz
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Hi. Andrew Sipotz, semi-finalist in the contest and developer of IRL Pong. If you'd like to run a follow up to this blog, message me (irlpongproject@gmail.com) and we can chat with you why my team participated in this contest.


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