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It is easy for non-business types to be a bit befuddled when dealing with the business end of their game development company. Negotiating agreements with all of the various businesses that game developers come into contact with can be a difficult process, especially for those new to the bargaining game. These quick tips may help you to feel empowered and negotiate a better deal.
Know your limits before you get to the table:
When representing a party in a negotiation, it is normal for an attorney to get all of the facts about the deal and the realities about the business end of things before hitting the bargaining table. If negotiating on your own, it is extremely important to have done your homework before the negotiations begin. Figure out exactly what numbers you can live with. Run the various amounts through whatever calculations have to be done. If you don’t do this and have the numbers already calculated before negotiations begin, you could end up agreeing to an untenable contract.
Have a BATNA:
A BATNA is the “Best Alternative To a Negotiated Agreement.” Basically, it’s what happens if negotiations break down and you have to walk away from the table. Having this planned out is part of the first tip, but is important enough to warrant its own section. You want to know that you have other options should things go south. For instance, if you are working with one distribution company and can’t come to an agreement on royalties, is there an offer from a second distributor you can fall back on? How about doing it yourself?
Having this knowledge beforehand can give you the upper hand in the negotiations, as you will be able to use it as leverage and be able to “walk away from the table” if unsatisfied. Additionally, if your BATNA is not satisfactory, it clues you into the seriousness of the negotiations and will make you a bit more flexible (provided that your limits are met, as in tip #1).
Anchor the offer:
“Anchoring” is the concept of being the first one to make an offer, thereby setting the range around which the negotiation happens. For example, suppose you would like to get a 5 percent royalty. If you ask for 5 percent as your first offer, the other party will attempt to negotiate it to another number. You are “anchoring” at your final desired outcome, which is a huge mistake.
Instead, you want to anchor the negotiations higher, so that you are pushing and pulling around that number instead. If you start at 10 percent, on the other hand, you have room to move and you’ve started things out much higher. The other side will most likely attempt the same thing, so sometimes it is best not to let them start the offering process.
Note: Be careful not to put an offer out that is insulting or extreme. This can cause the negotiation to end before it even begins.
One book that I found tremendously helpful in learning how to negotiate effectively is “Getting to Yes,” by Roger Fisher and William Ury (Note: affiliate link to help the site).
With these tips, you should be a little bit better-armed in your next contract negotiation. If you still need more help and advice, contact an attorney to set up a consultation before proceeding.
Digital Extremes —