Developers Deserve Residual Royalties
dustinclingman.com
dustinclingman.com
Game studios will instead choose to hire developers who enjoy being exploited for low wages and in terrible working conditions. They are, empirically, legion, because many young men continue to make poor choices. (There are roughly anomalous phenomena in people trying to get into, say, publishing or non-profits, but those folks don't typically possess skills which are as readily marketable as game developers. The typical coffee-fetching assistant editor could not triple their income and halve their hours immediately by being an assistant editor at a different firm.)
If a developer wants to continue earning from code they wrote once, there are many ways to make that happen, though. Most of them do not involve videogames professionally. One not-trivial-but-straightforward path is to own the company you're negotiating with regarding employment terms.
That's what I did. I make games and I only make money from royalties. It's super rewarding having complete control over what I do, but it's a succeed-or-die kind of venture.
Also, you know within the first hour of launch whether or not your game will be profitable or not, so it's a suspenseful time.
It seems like it's just the usual problem of building something no one wants, which in other industries is solved with an MVP and/or starting your marketing long before you have a product.
Now, whether your good game makes a small profit or becomes a massive hit is a whole other question. But to separate yourself from the big ocean of failed game projects, you simply have to have a deep understanding of what makes a game interesting, and to have a team that can execute that. There's not much you can do on the business end other than to keep everyone involved happy.
Luckily, the definition of a business 'success' in indie games is pretty modest; breaking even is pretty nice, and making enough to be able to start thinking about another project is a big success.
Most musicians don't make a dime on their recordings, and nothing more than subsistence on live appearances. For most musicians, "live appearance" means the corner of a bar, or a wedding. And music publishers as a rule don't provide musicians with a salaried job. They're much more like venture capitalists than employers, funding cohorts of 10-20 artists hoping that 1-2 breakout successes will cover the losses from the remaining 18-19.
Developers are as a general rule full-time employees, with steady salaries and benefits. More importantly, when a developer leaves one job, they are (relative to the broader economy) extraordinarily likely to find another job at comparable wages. A developer's role in this market is cushy enough that employers who are willing to accommodate them can be reasonably sure of eventually finding a good developer.
There is a word for the kind of developer who commands residual income from their work: startup founder.
Reward tracks risk, not merit.
Where software does mirror the film/music industry is that the marginal cost of production is very low. Copy 1 is very expensive, copy 10,000 much less so. The concept of residuals is to capture some of the resulting profit for the team that created the original work.
It's not a ridiculous request. Of course there will be pushback. But that doesn't make it wrong.
"Right" and "wrong" are moral terms. Compensation structure for developers isn't a moral issue. There are few other markets in the US economy where labor has the mobility, upside potential, and control that software developers do.
It's not "wrong" to ask for royalties. It's just that most of the time, supply & demand dictates that developers won't get them, because they're asking for royalties on top of an already generous (relative to the whole economy) comp package.
Or does demand exceed the supply of good developers such that compensation systems are up for negotiation?
Your entire comment shows you know nothing about the music business other than the little bit of pro-piracy drivel you've been fed over the internet. I am a musician and an author with real contracts that I've signed who's had to take classes and talk to lawyers about this subject, so I know what I'm talking about. You do not.
If you wrote a top-level comment about how the music business was different from the software business, and included details like typical contract terms, that comment would head up this thread instead of Patrick's and my own. But I submit to you that it would reach basically the same point as my comment, which is that songwriters and recording artists get royalties because they bear risks; developers tend not to get royalties because they are paid up-front.
[edited]
The most outsized portion of the upside goes to people who have the most capital. So much so it's the name of the game. But I don't think they create value in the same proportion; I don't think the economy is overall better for them getting such a large slice (you need a wealthy middle class to create demand); and above all, it's exasperating to read and hear these people thinking their share is justified by their "hard work", almost like they're blind to the system they inhabit.
I see two problems with his proposal: the VAST majority of games are commercially unsuccessful to break-even at best. So, for most devs, this would be meaningless.
Second: we're already well paid, and I think of some of that up-front comp as pre-paid royalties.
If you want back-side royalties, you probably have to give up some up-front comp, which is a bad trade for the overwhelming majority of game devs.
The logistics if the software industry are nothing like the music or movie industry. This post is absurd.
And further, to claim anyone "deserves" a royalty is ridiculous. I know a developer who is quite rich off of a software residual deal. He did not deserve it. He negotiated for it and earned it. Good for him!
I love the idea of working a royalty deal as a developer and hope more devs can pull it off profitably, but it would obviously have to entail getting paid less to nothing up front, similar to a starting musician. Risk vs reward. The ultimate balance.
Remix? Sequel? Live performance?
I actually think that movies and shows should go the other way. Talent and production people should have a stake in the studio, and we should have a lot more of them. It would align interests and we'd have fewer people who are in it just for the preset day rate. We would see more innovation in content, distribution, pricing, and rights.
I have a friend who was a PA (e.g. drive cross-town to get a particular type of food for Christina Aguilera). Every ten days or so they would get fired and rehired the next day. Why? Because if they worked past ten days they had to be part of the union.
On a set, the unions require a certain amount of union workers to be present (even for extras). To get around this, they hand out union vouchers (which makes you virtually but not literally a union member for a 'day').
Why are movies so expensive? A friend of mine has a cousin who is one of the on-site EMTs for a Hollywood studio (e.g. he idles near the ambulance in case of emergency). For that, he gets paid north of $200k/yr. For (usually) doing nothing.
With the rise of stuff like Kickstarter, they don't even need to fund development themselves anymore either. Take this game for example: http://www.kickstarter.com/projects/obsidian/project-eternit...
" We need our own equivalent to the Screen Actors Guild!
When SAG was formed, there was an argument that it would ruin the Film Industry. Many refused to join SAG and of course there were the Blacklist Years as well...
But look at today. SAG is just part of the backdrop and the Film and Television Industries have done just fine, while still managing to pay scale as well as decades of residuals for syndication."
It ain't gonna happen in software while the majority of people want a 'job'. It's not that there's anything inherently wrong with that mindset, but it shift the control to the job providers, vs the laborers. The SAG seems to have been set up to help actors in lieu of having a 'job' which would provide a degree of stability. I'm not sure the idea of 50+ year residual royalties was a primary factor in getting SAG off the ground, but I may very well be wrong here.
The closest thing we may have in software right now is working for 'equity' in a company, or profit-sharing options. I've proposed profit-sharing to some consulting clients, and only a handful were even open to the idea. The blog author may be (probably is) looking at this solely from the games-industry point of view, and it might work there, but it's not something that I think most orgs are ready for.
This is a song title and lyric taken without credit from Rush, specifically their Power Windows album. http://www.songmeanings.net/songs/view/108820/
He decries the lack of respect given to developers of creative works, yet here he steals ideas from another creative group and uses it without any attribution whatsoever.
I'd say it detracts from the strength of his argument just a bit.
(Note: hopefully he fixes this in the future, but no attribution as of Oct 14, 2012 10:51am)
Blog titles are also a common place for people to adopt cool quotes that are particularly meaningful to them - it has almost become a little genre - and it would spoil the fun to footnote them. This guy actually has quotation marks around his, so he's more punctilious than most.
</sarcasm>
Here's some pseudo-history to illustrate a point. Imagine living in a city like New York a hundred years ago. There are a limited number of theaters and you can't have infinite theaters and potentially can't even have enough theaters to keep up with demand for people wanting to see theater shows. Why? It's hard to get contiguous land, current theater owners oppose planning permission for new theaters, etc. These theaters rake it in on high margins since the supply is restricted compared to the demand. They also have power over the actors since there are more people who want to be actors than there are acting positions and so they exploit them for low wages and/or poor conditions. Even if you're an electrician and you're getting paid market wage, you're annoyed because the theater owner is raking it in due to their monopolistic/oligopolistic power in the market place and you want in on some of that fat margin. So, you form unions to get in on that fat margin. The theater owner can afford it because you're now both exploiting the theater going public. Under better economic conditions, theaters wouldn't be able to charge so much and there wouldn't be the margins to support above market wages.
The same is true in film and TV. There are again limited theaters to show movies and the theater wants to make the most off a show so they want to run big ones. This provides fat margins to movie makers. Of course, your need for actors has been drastically reduced making your margins way better than stage theater owners could ever dream of. Of course, seeing those fat margins, the actors want a piece of it. Realistically, they aren't doing something more than stage actors were, but c'mon the money is there and a normal person would want a piece of it. Same goes for television: there were/are a limited number of channels due to licensing.
Programming is different. In many ways, we fight against that economically bad situation. We disrupt markets. Our culture is one where we think you should be rewarded for doing something good for people, not entrenching yourself and keeping others with good ideas and products out. Our medium also tends to be infinite. There aren't a limited number of channels (websites) or a limited number of games that could be created. We can create as much as there is demand for.
In fact, as we look at the entertainment industry and its stance on copyright, we can see how we're slowly killing their old way of thinking. We don't want to watch reruns - make more content for lower budgets rather than restricting the amount of content. We don't want to pay the high margins - we see that the entertainment companies are exploiting us (along with the actors, techs, and others taking their cut of the exploitative margins). We see how it's rotten.
And it's important to note, as others have, that the way entertainment is set up is somewhat like a lottery. There's a lot of actors who spend a decade waiting tables only to give up. That doesn't really happen in our profession. Heck, having graduated from university half a decade ago, the only people I know who have been employed non-stop are CS people. We create good value across a broad spectrum of skills and we get good compensation for it - however, we don't have a lottery. Now, if we artificially restricted the number of websites allowed to exist (or games allowed to be made), those few websites would hire the best (aka, the star actors) for higher wages than they currently get, but many people might be waiting tables, trying to make connections, running white-board algorithms auditions all the time, etc. I mean, I know some people that dream of getting that Google job, but the difference between the somewhat low-end in CS which offers a higher than median income salary with good benefits and Google isn't the difference between waiting tables and being Liam Neeson.
And, frankly, getting a union like SAG wouldn't help us in the way SAG helped actors. It helped the actors because the movie companies were exploiting the public. As such, a union would help the actors get in on the price gouging and if they asked for a lot, the movie companies could raise prices a bit. The companies we're working for usually don't have margins like that because it's easy enough for another company to come in and offer the same service at a lower price. Like, a search engine couldn't charge you $1 per search because Google, Yahoo, etc. are free. If Google started charging, you'd just use Bing.
I know how nice it would be to live in a situation where you got higher margins for your work, but in the end someone has to pay that: the general public. That only works if you restrict people from competing and make the supply scarse. Culturally, that isn't us (we prefer disrupting these types of situations) and economically, we wouldn't be able to pull it off since we don't have the history of barriers. I know, I sometimes pine for the lack of competition that lawyers, doctors, actors, etc. enjoy. But ultimately, that even comes at a high cost to them: once you're in, it's great, but on the outside actors have a hard time breaking in, doctors have to go through a decade of schooling, and law school basically tortures its students. Because we operate at the margins we operate at, people can't force us to bow down to them: we can wear what we want, often get flex time, and usually get and keep jobs on our ability to do the job (at least more than many professions).