Ask Mary-Margaret: Proposing Your Game Idea

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Ask Mary-Margaret: Proposing Your Game Idea
By Ellen Guon Beeman and Mary-Margaret Ipser
Gamasutra
February 23, 2000
URL: http://www.gamasutra.com/features/20000223/askmm_01.htm

I want to present a game idea to a publisher, and I'm concerned about Non-Disclosure Agreements. What is the exact purpose of an NDA, do I have to sign one, and can I use my own instead?
- Legally Challenged in Los Angeles

Mary Margaret says: Part of my job at 3DO was reviewing external game submissions and handling the Non-Disclosure Agreements (NDAs). In order to protect themselves, most companies require anyone who submits a game idea to them to sign an NDA. There are several basic elements to the NDA: the person submitting the idea verifies that it's their original idea and they hold all rights to it; that there is no guarantee of the company being interested in the idea; that there's no offer of employment or work implicit in the company viewing the idea; and they indemnify the company from any liability in case the company is already developing a similar idea.

That last bit is the main element of the NDA. The company has to do this in order to protect themselves from situations of conflicted ownership. For example, if a person submits an idea to a company for a baseball game and the company is already working on a baseball game, the company can create a situation of liability if they view the submission without an NDA. The person submitting the baseball game idea could later claim that some of their ideas were used in the publisher's product, even though those ideas were developed inside the company. The bottom line is that the company has to protect themselves from an outsider claiming ownership of ideas that were more than likely developed internally.

There have been several famous lawsuits in the film industry over this kind of situation.

It is highly unlikely that the company will allow the use of an outsider's NDA over their own. The company lawyers have tailored the company's NDA to suit the company's needs… they're not going to want to spend time revising someone else's NDA.

As I said above, almost all companies will not accept external submissions without NDAs. Other companies will not accept them at all. It should also be noted that it is EXTREMELY rare for a company to develop a project from an external submission of just a game idea (it's more likely if you bring an experienced development team with you to build the entire project under a "development and publication" contract.) In my four years at 3DO, I only saw two external submissions that were accepted for development by external, established teams, who ultimately signed a Dev & Pub deal and were assigned an external producer. The company is more likely to try to hire the person who made the submission if they feel that person has strong talents. But even then, it is rare that you'd work on the idea you submitted.

So your next question probably is: "But if they can claim that they already had the idea under development internally, how can I protect myself from that?" The basic answer is: you can't. Every time you submit an idea to a company after signing a NDA, you run that risk. The odds of it are slim, though, because even with the NDA, the company won't want to take the risk of you suing them. The trick is to do business with ethical companies only. Keep in mind that this is a longshot, particularly if you don't have the resources to develop the project yourself. As Ellen likes to say, "Ideas are cheap, production is hard."

"What is the basic structure to follow when you want to present a game proposal to a publisher or investors? Or is there an existing structure to follow at all?"
- Creatively Curious in Canada

Ellen says: There are two aspects to your question: presenting a proposal to a development studio or game publisher, and presenting one to an investor.

First, there is no generic industry template for a project proposal. Some companies have their own proposal structure, where they give you a list of questions and expect you to have an answer for each one. Having run my own development studio for years, I'm going to write up a list of similar questions that you can use for an initial template:

The basic concept of the game (a "high concept", no more than two sentences).
The game platform.
The target audience.
Several paragraphs describing the game in more detail.
The storyline of the game (if appropriate).
The gameplay: what the player is trying to accomplish, the kind of levels or scenarios they'll encounter, and a general overview of the campaign or flow of the game.
The basic required hardware (for PC games, get specific: CPU speed, RAM required, hard drive space required, etc.)
The technology that'll be used to build the game.
Short profiles of the production team and why they're qualified.
A budget estimate (you may not want to put this in the proposal, but you should know what you'll need to build the game!)

The "high concept" is important because it's how the project will be described by the people talking about it at your target studio or publisher. My husband always liked to use other game titles and movie titles in his high concepts, such as this one: "Prince of Persia meets Road Warrior , as written by Isaac Asimov and directed by John Huston." While you may say, "But my game has nothing to do with other existing games!", the fact is that publishers buy what they know, so it's actually helpful to liken your project to some existing game or gameplay style. I always did one sentence that succinctly described the game, and a second sentence that likened it to an existing game genre or actual products.

What I suggest is having a short version (one page only!) that very briefly describes the project and the team as well as a more detailed version of your proposal, no more than ten pages in length.

Expect to be asked to sign a Non-Disclosure Agreement before any developer or publisher will be willing to look at your idea. Most companies will return a proposal unread without an NDA.

If your project is approved, you'll almost certainly be offered a short-term contract to do a "design phase," in which you'll work out the design of the project as well as a detailed budget and schedule, as opposed to starting on the full project immediately. A design phase usually lasts anywhere from two to six months, and may include building a working prototype as well as writing out detailed documentation and creating storyboards and other art. There is no guarantee that the project will proceed beyond the design phase.

Now, about talking to investors… this is a whole different area, and you're going to have to educate yourself far beyond anything I can write in this column to deal successfully with the business and legal issues of having a formal investment in your project or company by anyone other than a game publisher or developer.

You should give your investor the same game proposal, but also add a section in which you explain how the investor is going to make a profit. Keep in mind that investors aren't doing this for fun, they're doing it for a return on investment. With the stock market going gangbusters these days, you're going to have to make a very convincing argument why the investor should risk his money on you and your idea rather than just invest it in a mutual fund.

An investor is going to need a lot more business information than just the game proposal. What I'm attaching here is a short version of the table of contents of my former company's corporate "bible," which was a document that had all of our current pertinent business information in it. While this isn't information that necessarily needs to be in your prospectus, I would strongly suggest knowing the answers to these questions before talking to investors! It's pretty intense business data, but if you're going to talk someone into giving you money to build a project, you need to be a pretty intense and savvy business person! Even if you're only going to pursue deals with game studios or publishers, you probably should compile this information and keep it handy to answer questions from your prospective publisher.

I should mention that good accounting software like Quickbooks will allow you to easily build financial statements like a balance sheet, without the help of an accountant.

Here's the list of info for a good "company bible":

Overview of the company, including a company organizational chart;
A list of all employees, including function and salary;
Professional references;
Income statements and balance sheets, quarterly;
Projected income statements and balance sheets for the next three years;
Information about stockholders, how many shares are authorized, issued, and reserved, plus any contracts for issuing of stock;
A list of all loans, equity, and leases, including unrecorded liabilities;
A list of all existing and pending contracts, both clients and vendors;
Insurance policies;
Employee benefit plans and costs;
Any legal claims or actions by or against the company, either past or present;
A list of company assets, both equipment and intellectual properties (copyrights, patents, and trademarks);
Company budgets and reports used for financial planning;
Bank statements;
A list of accounts and the banks that the company does business with, and who is authorized to access those accounts;
Federal and state corporate tax returns;
Federal tax withholding records;
The Articles of Incorporation, Minutes of the Board of Directors, and bylaws (if incorporated).

Just to give you some perspective on this, the bible for my company filled two large notebooks, and weighed over thirty pounds! I would suggest having a short version of these questions and answers (a few pages long) and a long, extremely detailed version that you keep current with your company's info.

Yes, if you're just getting started, a lot of the answers to these questions is going to be "Not Applicable." But I think it's worthwhile to at least think about the answers before talking to a publisher or investor. Keep in mind that your business structure is going to be just as important to them as your great game idea!

Also, I should clarify that there is a major legal difference between someone investing in a project and investing in a company. Investments in a project are purely contractual between individuals and companies, investments in a company may require the company to have a specific legal status such as incorporation, and the sales of shares of stock is very closely regulated in the United States. The fact that you're Canadian may mean that there are specific local laws that will affect how companies and individuals can invest in your company. Learn your local laws before you make any deals!

In either of these situations, I strongly, strongly recommend getting a lawyer or business agent who is specifically experienced in game deals to help you in your negotiations.

As for how much you'll need to show to get a deal, I believe in a sliding scale of experience versus proposal. A highly experienced, well-known developer may be able to sell a game based on a one page proposal. At the far end of the scale, if you have no track record, you'd better be able to at least show a playable prototype of your game, plus a lot of design and production planning to convince a publisher or investor that you'll actually complete the project. You should start with just your one page proposal to see whether the company is interested, but have these other materials ready to show on request.

And keep in mind that until the contract is signed, the deal isn't real. I don't know how many projects I've seen where a publisher has expressed interest, negotiations have begun, and the project never gets started. Delays and project cancellations are a reality of our fast-moving industry.

The main thing to keep in mind in this is that ideas are cheap, production is hard. Most game companies have more ideas than they have time and people to develop. So what you need to emphasize is not just the salability of your idea, but how you and your team will carry through and develop it into a completed game that will be profitable in the market. You will need to have substantial industry experience, not just yourself but in your entire team, to get a publisher or investor interested in doing business with you. But even though it may be a long shot, if you have the passion to build your game, and the experience to do it right, it's worth pursuing that dream.

Mary Margaret Ipser is one of the leading recruiters in the game business, with successful placements ranging from entry level to Vice Presidents, and is the founder of Mary-Margaret.Com.

Ellen Guon Beeman designed and/or produced over thirty titles for top game companies including Microsoft and Electronic Arts, prior to joining Mary-Margaret.Com as a recruiter.