"Famous Last Words"

Walking Through Contracts (June 2003)

Dear Jim,

Would you provide the IGDA members with SAMPLE Agreements. I am particularly interested in seeing samples of Publisher's Agreement with Developers for Pick Up Games (completed games by developers), Publisher's Agreement for Developer for Hire, Non-Compete Agreement, and Confidentiality Agreement.

Denise L.

Dear Denise:

We all know the games industry is evolving on a fast track.

In terms of business practices, it is moving much faster than motion pictures or recorded music. Contract terms can be a moving target depending on the negotiating clout of the studio, publisher, content licensor, platform, budget size and third party technology that comes to the project. Additional variables in this process are, who created the content and who will finance it. Paperwork is universally issued and controlled by the party providing the capital – which in our business is the publisher.

A sample contract is a snapshot in time negotiated in connection with one deal that represents one set of variables existing at that one time in connection with that one deal between those parties.

It is not representative of deals in general and can be misleading if used as a template for any other deal.

However, the IGDA understands there is a need for general information about development contracts and has looked for a better way to provide it to the studio community. To address this interest, IGDA has launched the “Contract Walk-Through”.

This project, organized by the Business Committee of IGDA, and involving the volunteer efforts of many top lawyers in the games industry, examines contract issues in dev agreements through a series of brief articles. Each article looks at one issue -- gives a sample clause and discusses the wheres and whys of the issue. Each lawyer provides commentary that can help a developer understand why the issue is in the contract and how negotiations on the issue might be approached. Each lawyer’s article has been supplemented with annotations and commentary by developers who have had to deal with the issue in their own contracts.

The Contract Walk-Through represents a body of work that will grow over time and evolve into a comprehensive analysis of games development contract issues with developer/studio executive commentary/annotations.

The IGDA Contract Walk-Through was launched shortly before E3. I believe it will prove to be far more valuable than sample dev agreements that quickly become as stale as yesterday’s bagette.