If you deal with the topic of video games, you will come across publishers such as EA, Koch Media, Kalypso or Ubisoft relatively quickly. And for many it is not at all clear what a publisher actually does and what tasks he has in video games. I would like to take you on a journey around the topic “What does a publisher like that do”, a small digression on shops, platforms and sales models and on the question: “Why does an indie developer need a publisher?”
Everything is possible, nothing is neccesary
The publisher is basically nothing more than a book publisher. Its basic task is the dissemination of a medium, in our concrete field: the video game. Among other things, he makes sure that a game is available on Steam, in the Xbox or Playstation store and of course on every other important platform. If the product is also to be sold in retail, the publisher also takes care of the production and communication with the respective retailers.
But that’s just the basic task that you can and should expect from every publisher, be it a triple-A publisher like EA or Microsoft Studios to indie publishers like Deck13, who are actually developers around the development of The Surge but also actively support indies, like Klonk Games with the release of Shift Happens.
In addition to development and publication, most publishers also take care of marketing, since contacts already exist here and the publisher also has funds to promote a game accordingly. Many publishers finance the games completely or partially, in that they have their own development studios, as is the case with Ubisoft and the development studio Ubisoft Montreal, which was responsible for For Honor, among other things. But external developers, such as Remedy, who have implemented Microsoft’s Quantum Break, can also be commissioned. Here, either full financing can take place or, depending on the status of the game and the contents of the contract, only part of the financing. This all depends on how you negotiate the contracts. Whether the idea and the title goes to the publisher, as was the case with Far Cry, for example. Here Crytek developed the Openworld island shooter for Ubisoft in 2005 and then separated from both Far Cry as a title, called IP (Intellectual Property) in technical jargon, as well as from Ubisoft and then published Crysis, while Ubisoft continued to expand Far Cry, including with Far Cry Primal and the upcoming Far Cry 5. Other publishers, such as HeadUp-Games from Düren, who have also published The Inner World by Studio Fizbin, on the other hand, want the developers to stand behind the IP’s and are also negotiating contracts where the idea stays with the developer and then just distribute the game.
Indie developers and why they need publishers
And then of course we would be at the next point: “Why are there indie developers?” and “Why do they have a publisher?”. Large publishers have often grown through AAA productions. For example, when you think of Activision, you automatically think of Call of Duty, at Microsoft Halo or Gears of War and at EA Fifa or Battlefield. The developers who don’t follow the “rut” of the big titles and don’t want to work on Call of Duty 15 or Battlefield 11 often haven’t found the artistic freedom they had hoped for from the big publishers and their development studios, and so on many chose the path away from the big development studios or didn’t even go in that direction and founded their own small studio with former colleagues and friends. Here you could devote yourself to the artistic liberties that you can’t have with a game like Forza Motorsport 6, because not only does the IP owner have certain ideas about the title, but also the fans and the community that have been around it formed a franchise and also has corresponding claims to a sequel.
You can make a survival game, a puzzle platformer, games with stories about life, death and everything before, in between and after. You can be philosophical, you can use comic graphics as well as surrealism and there is no limit.
However, many indie developers have a problem: The team primarily consists of graphic designers and programmers. Ideally, someone with a basic knowledge of accounting. Most indie developers can’t afford people for marketing or for sales. And so, despite the ease of distribution in the Steam, Xbox or Playstation stores, indie developers often resort to a publisher so that the game doesn’t get lost in the mass of titles out there.
Distribution models – Or why games are so expensive in the Playstation and Xbox stores.
I often stumble over the question: “Why does game XY only cost €40 in stores and if I want to buy it in the PSN store, then they want €60 to €70 for it? Doesn’t Sony have all the cups in the cupboard anymore? They should kindly lower the price!”. Here I have to defend both Sony and Microsoft first, because neither Sony nor Microsoft set the prices in the stores. The two groups only offer a marketplace. Every manufacturer comes here, either directly, for example through the [email protected] program or through a publisher, and offers their goods. The manufacturer decides on the price of the goods. If EA sets Fifa 17 that the game should cost €69.99, then in the end it will also say €69.99. The publisher can also set the release date, i.e. on which date and at what time the game is accessible. The platform operators, Microsoft and Sony, are not allowed to easily change this data and do not have easy access to it. However, the publisher only gets his money for each version he sells, minus a certain commission for the store operator. After deducting taxes, about 70% goes to the publisher/developer and 30% goes to Microsoft or Sony. Regardless of whether the game cost €100 or just €2.49.
The situation is different in retail trade. Here the dealer orders a certain number of games, especially at Amazon, the number is very high, and sometimes pays for them in full. Expressed in examples and numbers: A dealer buys 1000 copies of a new railway simulator and also pays for these 1000 units directly. As compensation for the fact that the publisher gets the money for the 1000 games directly, he gives a discount of up to 50%. The retailer can now work with the discount, the so-called trading margin. Of course, the latter has to pay rent, employees, etc., but can also use this to grant a discount for the customer. On the other hand, the publisher can also work directly with the money and thus either finance new projects or pay off loans that he may have had to take out for the old project.
And now we are combining the two models: Unlike, for example, Steam and the PC video game market, where German retail trade in particular has almost died out, the market for silver discs for consoles is still booming. The physical disc and the box is a reason for many gamers to play on the console. Here the publisher does not want to cannibalize himself by digitally granting the end customer a larger discount just because he might be able to. Once he did that, retailers like Amazon would come up with the same argument and also ask for a bigger discount. As a result, games often remain in the store for a very long time at a relatively high price.
Developers develop and publishers also have a lot of work to do
The bottom line is that the work for a publisher is very broad and very interesting. Not only the financing and the delivery to the dealer belong to his tasks, also the visibility of a title depends very much on him. Indie developers in particular can gain a strong big brother by looking for a good indie publisher. On the other hand, things can also go haywire if the publisher doesn’t pay enough attention to marketing or the success is due to the developer’s own initiative.