Game Studio Agreement with a Publisher: Who Owns the Game and How Revenue Is Shared

The publisher offers the studio funding, assistance with launching on platforms, and game promotion. The presentation specifies an attractive revenue share, so the commercial terms appear clear. However, after release, it turns out that the advance is first recouped from the studio’s payments, marketing expenses are also subject to recoupment, and the right to release the game on a new platform depends on the publisher’s consent.

Such issues should not be left until the «we’ll figure it out after launch» stage. A publishing agreement determines more than just the amount of payments. It establishes who controls the game, which expenses are recouped from sales, and whether the studio will be able to continue working on the project if the relationship ends.

Who Owns the Rights to the Game?

Funding the development does not in itself answer the question of who owns the rights. Different models are possible: the studio retains the rights to the game and grants the publisher a license to distribute it; the parties allocate rights to individual elements; or the rights are transferred to the publisher to an agreed extent. The specific outcome depends on the agreement and the applicable law.

If the studio wants to retain the game, stating that «the rights remain with the developer» is not enough. It is necessary to define exactly what the publisher is permitted to do: on which platforms and in which territories it may distribute the game, for how long, in which languages, and whether it has the right to engage other partners. An exclusive license covering all platforms without an obligation to release the game on each of them may prevent the studio from using other sales channels for a long time.

A game also consists of different assets: code, visual materials, music, the script, characters, the title, and trademarks. Some of them may have existed before the deal or may have been created by external contractors. Before signing, the studio should check whether its agreements with authors and licenses for third-party materials allow it to grant the publisher the promised rights. The agreement should also separately determine what happens to the engine, the studio’s internal tools, and components that it uses in other projects.

Sequels, expansions, and the use of the game world beyond the original release require particular attention. The publisher’s right to release one game should not automatically turn into control over future installments in the series, merchandising, or screen adaptations unless the parties have agreed otherwise.

What Is the Publisher Responsible for After Signing?

A promise to «publish and promote the game» is difficult to evaluate until it is translated into specific obligations. The agreement needs a clear framework for how the parties will work: who prepares store pages, handles localization, communicates with platforms, organizes advertising campaigns, manages the community, and responds to player inquiries.

The marketing budget is particularly important in negotiations. It may be a fixed commitment by the publisher, a preliminary plan that the publisher has the right to revise, or an expense that will later be recouped from the game’s revenue. For the studio, these are different terms.

It is useful to agree on a minimum level of spending or a procedure for approving the plan, deadlines for key actions, and a reporting procedure. If the publisher’s expenses will be recouped from revenue, the agreement should define their categories and limits. Otherwise, the calculation may include costs that the studio did not approve and could not verify.

Control over the product should also be allocated in advance. Who approves the release date, price, discounts, localizations, and material changes to the game? What requirements must be met for a build to be accepted? If the publisher can indefinitely delay acceptance without providing specific comments, the studio risks not receiving the next scheduled payment. If the studio can unilaterally change the project, the publisher will not be able to plan the launch. A workable agreement ties decisions to clear criteria, response deadlines, and a procedure for addressing comments.

How Financing Affects Payments to the Studio

The publisher may provide an advance for development, pay for individual milestones, or cover part of the costs of release and promotion. The agreement should expressly specify which amounts are considered advances against the studio’s future revenue share and which costs are funded by the publisher at its own expense.

An advance is often subject to recoupment: the publisher recovers the amount invested from the game revenue specified in the agreement. This does not necessarily mean that the studio must repay the money from its own funds if sales are low. However, this conclusion should follow from the terms of the agreement rather than from the parties’ expectations.

The key question is which portion of the revenue is used to recoup the advance. Suppose that, after the deductions established by the agreement, revenue from the game amounts to €100,000, and the publisher and studio shares are 50/50. If the publisher previously paid the studio a €30,000 advance and is entitled to recoup it from the studio’s share, the calculation will be as follows: the studio’s share is €50,000, of which €30,000 has already been received as an advance, so the current payment is €20,000. If the agreement allows the publisher to recoup marketing expenses before the revenue shares are distributed, the result will be different.

Therefore, the studio’s percentage cannot be assessed separately from the recoupment rules. It is necessary to understand which costs are recoupable, in what order they are recouped, whether there is a cap on marketing expenses, and whether losses from one game can be covered by revenue from another. The latter mechanism is particularly sensitive for a studio that enters into an agreement with a publisher covering several projects at once.

What Counts as Revenue from the Game?

The phrase «the studio receives 50% of net revenue» does not make it possible to calculate the payment on its own. Between the player’s payment and the amount that the parties divide between themselves, there may be sales taxes, refunds, store commissions, payment processing fees, and other deductions.

The agreement should establish the sequence of the calculation:

1. Which revenue is included. Sales of the base game, expansions, in-game purchases, subscriptions, bundle sales, and revenue from granting rights to other partners may be treated differently.
2. Which amounts are deducted before the revenue shares are distributed. It is better to expressly identify each permitted deduction. A general provision covering «all expenses related to the game» leaves too much room for interpretation.
3. Which costs the publisher recoups separately. A development advance and marketing expenses should not be mixed with platform commissions: they are different in nature and subject to different approval procedures.
4. When reports are prepared and payments are made. The parties need to take into account the delay between a sale, the platform’s settlement with the publisher, and the transfer of the studio’s share.

The studio also needs access to data that allows it to verify the calculation: reports by platform, territory, and type of sale, information on refunds, deductions applied, and the remaining unrecouped advance. If sales are made through the publisher’s account, the agreement may provide for regular reports and the right to review supporting documents in the event of material discrepancies.

What Happens If the Game Is Not Released or the Agreement Is Terminated?

A publishing deal may end before release or several years after it. These situations require different solutions. If the publisher has received exclusive rights but has not released the game within the agreed timeframe, the studio needs a mechanism for the rights to revert after notice and a period to remedy the breach. Otherwise, the project may remain blocked even though no one is selling it.

After release, the game cannot simply be removed from the store on the day the agreement terminates. Players already have purchased copies, obligations regarding updates and support may remain in effect, and stores may continue to process refunds and transfer funds for previous periods. The parties need to determine a transition period, the procedure for final settlements, and what happens to existing users.

Before signing, it is useful to agree on:

• Grounds for termination. Which breaches give the right to terminate the agreement, whether notice must first be given, and how much time is provided to remedy the breach.
• What happens to the rights to the game. When the publisher’s license ends and whether it retains limited rights to fulfill existing obligations to players and platforms.
• Access to infrastructure. Who controls store accounts, game pages, domains, advertising accounts, game servers, and the data necessary to continue providing support.
• Final settlements. How revenue from sales made before termination of the agreement is paid and what happens to the unused marketing budget and the unrecouped advance.

The transfer of the game to another publisher or a self-publishing model requires particular attention. Even if the rights revert to the studio, changing partners may be difficult when store pages, the community, and operational tools are controlled exclusively by the former publisher. The procedure for transferring access and cooperating during the transition is best established in advance.

What Should the Studio Review Before Negotiations?

The publisher evaluates not only the game concept but also whether it can obtain the necessary rights, release the product, and generate revenue from it. Therefore, it is useful for the studio to prepare a list of the materials it owns and its agreements with authors, a budget for completing development, a release plan, and several financial scenarios.

After that, the studio can compare publishers’ offers on their actual terms. One partner may provide a larger advance but receive long-term exclusivity across all platforms. Another may offer a smaller budget but limit its rights to specific territories and commit to spending an agreed amount on promotion. The revenue share is important, but on its own it does not show which offer is more beneficial for the game and the studio’s future projects.

A good publishing agreement makes it possible to answer four questions without additional negotiations: who controls the game, what actions and expenses the publisher is required to undertake, how sales revenue is converted into payments to the studio, and who will be able to continue working on the project after the relationship ends. These terms determine the real value of the deal.