Its a dream for many of to one-day, license our favorite media and create a tabletop or board game of that IP. Perhaps its your favorite video game, book, series, ect.
This is part of a series that I am working on in reflection of the business practices I had learned (sometimes through luck, reason, or by mistake and hard lessons). I do hope this is useful for people, new and experienced alike.
I AM NOT A LAWYER AND THIS IS NOT LEGAL ADVICE, RATHER THESE ARE THOUGHTS THAT IVE HAD
Getting That IP
This is, of course, is the Great Filter. Getting that IP is the first and hardest step. Every path is different but of course the one thing that really shows is A Successful Track record in delivering projects.
- It never hurts to inquire or reach out / cold emails
- Be sure to present yourself in the best light possible
- You might benefit from a pitch deck
- You might benefit from pulling together a diverse and experienced team.
- You might benefit from a larger publisher to be the primary licensor
- You might benefit from having a Licensing Agent (though they have their own fees, but might have better relationships/rep to leverage)
- You will need a solid website showcasing who you are and what you produce
- You will need pictures of your products on your website (showing what market you are in and what you produce)
- Some licensors will look at your prior projects and look at the comments (which is a hard thing to control for sometimes), but it can come into play when someone goes and does their research.
Everyone has their own journey and experiences, and the best thing you can really do is talk to other developers, make connections, and build the best resume you can so you can pitch it (directly or indirectly).
For us, we didn't start pitching until we had a few books under our belt (3-4, and had an award to show for it, which i believe helped lend a bit more credibility to our efforts.
But ok! Now you got the go-ahead to send over a contract (obviously it really comes down to who is drafting up that contract, but at the end of the day, you still have some negotiation leverage around terms.
Basic Terms
- Royalty - How much of sales are going to the IP holder
- Minimum Guarantee - If at the end of the contract term the total royalties that were paid out are below this value, you need to pay the difference to the IP holder.
- Licensee Fee - this is an upfront cost you pay to the license holder, more often than not it does not count against the minimum guarantee, but not always.
Terms to think about:
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Royalty
Ideally, you want one royalty rate to cover everything (though ive seen digital and physical splits). Rates will probably be around 5-20%. Something worth considering is separate royalty rates for Crowdfunding and Market, this way you might be able to get a little more up-front development funds. If you do crowdfunding royalties, be sure to have it based on funds received, not the total funds raised (and exclude shipping).
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Crowdfunding
Ensure the contract is contingent on the crowdfunding being successful. You dont want to be on the hook for work you cant afford. This also does bring in the awkward conversation about if it fails, is there a chance to try relaunching the campaign later instead of losing the contract outright.
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Royalty and Crowfdunding timing
Build in a payout from the crowdfunding portion of your campaign, but pause any additional royalty payments until the product has released. Yes you will have to calculate royalties on pre-orders, but at least you wont have to worry about doing quarterly royalty payouts or reporting until the book is released.
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Minimum Guarantee
Ideally, you want this to be something you can achieve in the first year or so. This will likely range between 2-10k, and will strongly depend on the IP and the strength of that property. (Modiphius noted, for them that minimum guarantee is based on 50% of your forecasted royalties over the 3 years).
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License fee
This is the price you pay for the license itself, this could be 1-5k. For larger brands 10k is a minimum to show you're serious.
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Termination
Have an exit clause for both parties.
If they want to cancel, be sure to include text that forfeits any future royalties (which puts you off the hook for any minimum guarantee) and gives you some duration, like 3 months to liquidate assets (or sell as much as you can before its over).
If you cancel, be mindful of the minimum guarantee.
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Assets / Lorebooks
Ideally you should figure this out before drafting up a contract. But, its extremely important to ask for what you can get in the contract in case you need to actually push for it. Also, be sure you know what kind of assets you're getting and are allowed to use, and how you can use them (like can you create a video promoting the game using them).
This will also tell you how much art you might be developing for the project. For instance, many Anime properties required you to only use the source material, which means you cannot produce any new art for the project (Cowboy Bebop RPG comes to mind as a recent example, though TRIGUN D20 from the 3e days was similiar)
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Pre-Clear your products
Typically before you get into negotiation clear the types of products that you're allowed to produce, decks, boards, sometimes the IP holder has their own vision of what the product may shape to be. Also, things like ancillary products like art prints, stickers, pins ect are important to know if you can produce or not.
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Have the core contract term start upon publication of the game (not when you sign the agreement).
Not only will this give you time to work on the game, but if your development takes longer than expected, you wont be penalized for that delay. One method ive been working on is a contract term to develop the game (usually 2.5-3 years), then upon publication extend the contract 5 years from the date of publication.
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Approval Windows
When building approvals into your contract, build in a turnaround window for the approver. "Unless otherwise communicated, if the approver does not respond within 15 business days, it is considered approved." Granted, you will likely want final confirmation on final approval, which something might come up. But this will at least give you a window of time.
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Clear Language Licensing
Are you locked to the English US/EU market, or are you able to produce or sublicense in other languages? If you can sublicense, who approves, and what will the royalties be for that.
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Anyways these were the first things that came to mind. I hope you find them as useful
