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July 23rd, 2012, 00:09
Originally Posted by TheMadGamer View Post
Under a "normal" business arrangment, where you have a developer and publisher, from what I understand, the publisher funds the devloper and the publisher is paid back those funds plus a pre-determined profit after the game ships. The developer keeps whatever is left, if anything.
Depends on the status of developer. If it's an inhouse developer I don't think profits are always earmarked as being earned and therefore saved for this or that internal developer. For example EA sports or Sims titles (little investment/large return) profits aren't used solely on EA Sports or Sims titles. The profits often end up funding other franchises or even help having a bit of money seperate so they can risk a new IP now and again. In this system developers are just employees, that does however not protect them from being fired if a title fails. They might receive bonusses however.

But yes, with external development studios for funded titles that's how it works.

With some external studios it isn't even the publisher who has funded the game but a third party and a publisher only as distributor. A recent example was Kingdoms of Amalur where Big Huge Games was the developer it's mother company 38 Studios the ones who funded and EA the ones who published. That might also be the reason for the varying perception of what entailed a success for the title.
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