Negotiating contracts is always a tricky situation, especially when you're a newer developer or are in a disadvantageous position (such as needing to sign something immediately to get your team fed, for example). In this opinion piece originally published in the February issue of Game Developer, editor-emeritus Brandon Sheffield argues that it never hurts to ask for more than what's offered.
As an independent game developer without significant savings, I live or die by the contracts I sign with publishers. The money that comes in from them pays my rent and my team's rent, so any extra bit helps. That's why it's a good idea to ask for more than you estimate a project will actually cost; who knows, you might really need that extra couple-month buffer to finish the project! Or maybe you finish it in your initial time frame, and have some wiggle room to prototype before your next pitch. People who are used to living lean (read: indies and mid-size developers in dire straits) tend to estimate very conservatively as well, so this can help make your budgets more realistic.
You'll understand that I have to use very vague terms here, but I know of two developers who both signed with a major platform publisher at the same time, for two games each. One dev asked for a very reasonable amount, and got it. The other dev asked for 20% more than the first dev, and one month less platform exclusivity--and they got that too. The first developer could've gotten a better deal, but they just didn't ask for anything more.
I heard from another platform publisher representative about how people complain of low rates in their publishing deals. My contact said to me, "Why don't they just ask? If they need another $50,000, that's not going to sour the deal." Sometimes people do ask, my contact said, and they quite often get what they asked for.
But the major point is that it didn't ruin the deal. In my experience, simply asking for more doesn't take a deal off the table, and if it does, that's probably not a publisher who really believes in your game in the first place. If asking for 5% more in revenue share is all it takes for them to think maybe this isn't such a good idea, maybe it isn't such a good idea for you to work with them, either.
So you're not just taking my word for it, I decided to ask fellow Game Developer columnist (and Spry Fox CEO) David Edery whether he's ever heard of or experienced a deal falling through simply because of asking for more. He said, "I've had that experience once. But it's worth noting that I was asking for a lot, as in, probably more than they had ever been asked for before. In general, it does not happen."
He also agreed that a publisher who drops you simply because of an inquiry is probably not very interested in you. "Asking someone for another 5% should not cause them to walk away from the deal all by itself," he said. "After all, they can simply say 'no.' If they do walk away, what I would most likely assume is that: A) They have no respect for you, and/or B) They are hoping to intimidate you, and/or C) Like you said, they're not really interested in working with you anyway."
But of course, you can't be asking for things all the time. Best to do that all at once, and sign a contract that has everything you've asked for in one batch. "Asking for one thing, then another, then another, and dragging a negotiation out for months can definitely cause someone to walk away even if all your requests are reasonable," Edery added.
In my experience, it's best to find out what all the terms of the contract are up front, spend a day or two mulling over what works best for you, then make your requests all in one go. Knowing a bit about what the contract will look like in advance, simply by talking about things like amount of funding, how milestones are paid, revenue share percentages, marketing costs, how publisher risk is recouped, and exclusivity terms will help to make the process smoother once you're actually looking at a live contract document.
There certainly is a temptation to ask for more, after your demands seem to be easily met. If you asked for 5% more revenue share than is the norm, and the publisher immediately said yes, there's a tendency to feel like you should have asked for 7%, or 10% more. But pushing harder on the same issue makes you look a bit precious, and does not ingratiate you to your overlords. (If you try this consistently, please let me know your results.)
On your own
As a development team, it feels like you've got more bargaining chips. As an independent contractor, though, it's often quite tough to know how much to charge. I've talked to a number of people who have gone independent after leaving a studio, or transitioned into the industry from another field, who simply have no idea what they should ask for. You don't want to go too low, because you need to eat. Obviously you want as much as you can get. But you don't know who else is bidding. What if someone else underbids you?
I've certainly had that happen to me, but I haven't regretted it missing out on those deals. Never sign a contract that's lower than what you really want. In the end, it's good to go into negotiations feeling like you're worth a lot of money. If you start sliding down the scale, people will realize you're worth whatever they feel like paying.
When I was doing more specific contract work, such as dialog writing, I've always asked for a bit more than they might expect. I use previous projects as a gauge, and try to slowly increase my rate; after all, with every project I gain more experience, so shouldn't I be worth more? And if ever the company asks me to do something that I feel is outside the scope of the existing contract, I ask for a new one that includes the new work, and additional compensation. The worst they can say is no, at which point I will not do the extra work. The old contract still holds, after all!
Now, it's probably not the best idea to try extensive negotiations with a salaried contract, unless you're a high level lead or exec who has a lot of bargaining power due to your level of experience. In a salaried situation, sometimes too much negotiation can make the potential employee seem like they're not a team player.
But overall, the feeling I've gotten is that asking for more doesn't hurt. It's never hurt me, and the developers I've talked to haven't been hurt by it either. So why not try to get a little more? See what you can get. They're the ones with the money; we're the ones with the content they need in order to make more money. When you think about it that way, we're really in a good position as developers. So go ahead: Ask for more!