Small Studio, Big Decisions: Betting Big on a Free Demo

Let Us Start With Poker

I won a poker tournament one time. There were 30 or so people in it, some of which were better and had played much more poker than me, but after some momentum and a dose of confidence, I cleaned out the second place player with back-to-back all-in hands. It was sweet!

There I was, just three hands into my next poker tournament. I had a great hand, but when I put in a big bet, one of my opponents put in a bigger one. Much too late, it occurred to me that I might not have the best hand at the table. I had a dilemma. I was not all-in yet, but if I lost all the money in the pot, I would be so far behind that I could never catch up.

What should I do? I felt helpless and trapped. I knew what I had to do and I resented it.

My odds of recovering that pile of chips on the table if I folded were less than the odds that my opponent was bluffing and I was going to clean him out. It was a long shot, but I called his all-in, lost the hand and was the first player eliminated from second tournament.

I’ll always remember how I felt when I was faced with the terrible situation of having to go through with a bet because I’d invested so much in it already.. Then when I felt it again, staring at the contract for a game my studio had won by building an excellent demo, I knew the mistake I had made.

In this article I am going to explain to you how over investing in a game demo for a publisher limits your options just like making a bad bet in poker.

Making a Demo for a Publisher

Game publishers routinely ask prospective developers for demos when they have a game contract they are looking to place. They want to learn about you, to protect themselves, their shareholders, and their customers and fans. They want to know if your team can code. They want to know if you can create art on demand, or if your website is full of outsourced assets. After they have seen your demo, they may or may-not give you the contract to make the game. Their decisions reflect on the quality of your demo and on your competition.

If you were in their situation, you would want to see as much as you could in order to assure yourself, your boss, and the shareholders that a prospective developer could do the job. Working with a new developer is risky business. Publishers often encourage developers to put as much as they can into a demo. They say that the more time a developer puts into the demo the more likely a developer is to get the deal, and this is true.

My studio made a demo at the request of a publisher. We made a great, feature rich demo with its own art style, and with lots of custom code and animation. We knew what our staff costs were, so we decided to invest a certain amount in the demo. It was excellent, and we landed the project as we intended. Then we had to negotiate the contract. We pored over the paper, and went back and forth with the client and our agents, and this is when the feeling returned.

The demo we had made was the same as the large bet in the poker game. My studio could no more back away from the game deal than I could back away from my pile of chips. We had invested time and money in this project and we could not go back and reinvest it in another project, any more than I could take back my chips and bet them on a different hand.

This means that if contract negotiations are going poorly, the publisher can walk away without losing anything and you cannot. I am sure they are still negotiating in good faith, but if they dig in their heels on any issue, you will just have to accept it, or you are going to lose all the effort you put into the demo and they will lose nothing. Your advantage is gone, and if the publisher representative that is negotiating the contract is any good, they will know when you are strong and when you are weak. They are not trying to hurt you, but they do want to do the best for their boss and their shareholders, and that means getting the best deal possible out of you.

 

What can you do instead?

Demos are a reality. Sometimes, they have to be done. My advice in this article is to demo responsibly. Before you begin a demo, consider the following options.

  1. Some publishers will pay you to make a demo. Ask if your publisher will do this. (Yes, this is a real option!) The publisher will own the demo when it is done but they were going to own the game anyway so it is not a big loss.
  2. Negotiate the major contract terms before beginning the demo and create a Letter of Intent. This allows you to make the terms while you are still on an even footing.
  3. Don’t over invest! If you make a free demo, only put a couple people on it and focus on a particular feature. Perhaps you want to demonstrate physics, art or animation, but not all three. Also, do not invest more than you are willing to walk away from if the contract negotiations do not go well.
  4. Spread out your team. If you have a full team with nothing to do except land the next deal, then do two or three smaller demos at once. When they are finished, there will be a couple of options available to you so you are not trapped into just one. Just having the option to take a different project will restore your advantage in the negotiations.
  5. Reuse: Either only build demo assets that you can later use on other projects or build your demo from assets that you have already made. Both of these options reduce the cost of the demo. Maybe all your demo fighting game characters look like basketball players, but you should still be able to communicate your capabilities.

 

Conclusion:

As I close, I should point out that I do not believe that publishers do this on purpose. I am not sure they are even aware of the situation created by demos, but whether they are aware or not, it can still bite you. It is their job to get a good deal for their company, and your job to get a good deal for yours. When almost all your chips are on the table you cannot negotiate effectively, just as I could not bet effectively.

I am not going to tell you not to make demos, and you will never find one solution that covers all situations. You need to remember what can happen and  what your options are.  Only then should you start work on a free demo for a publisher.

Keep your eyes open, stay informed and make the decisions that are right for you.


Jesse Joudrey got his start at Electronic Arts Canada in Vancouver before co-founding his first studio in 2004. A.C.R.O.N.Y.M. Games grew from 2 to 42 people before his departure in 2013. His second studio, Jespionage Entertainment, is focused on mobile development in Unity.

You can follow him on Twitter – @JesseJoudrey or visit the Jespionage website at http://www.jespionage.com

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