Introduction

The revenue sharing has a long history of being practiced by indie game developers, but its soundness is often questioned.

The dilemma always existed. How do we properly price the risk of commercial failure of a project?

• To pay an upfront fee? My budget won’t easily allow.
• To share a part of the revenue after launch? Contributors deserve it, but I can hardly keep them engaged once a flat percentage is secured.

At Nekostein, as we were working on Wellenfjord Danmaku Adventure, making battle music was a great challenge. The project aims to resemble retro arcade vertical danmaku shooting games (a genre known as bullet hell in modern terms), where battle music is expected to be engaging and exciting, perhaps sometimes narrating.

We were lucky enough to meet Matthew, a part-time composer who specializes in Fugue and shares works on Bilibili. Even better, we developed a financial instrument that made the collaboration fair and math-friendly.

The payment consists of 2 parts:

• Nominal Price with Revenue-Limited Fulfillment Progress (NPRLFP)
• Conditional Lifetime Revenue Sharing Right (CLRSR)

Nominal Price with Revenue-Limited Fulfillment Progress (NPRLFP)

A NPRLFP offer includes 3 parameters:

• Nominal Price: How much money may be paid in total, eventually, if things work well.
• Proportion: Above which percentage of the money earned in Revenue shall be used to pay the contributor before fully paid.
• Revenue Definition: Which financial metric should be used to define Total Revenue.

Here is an example NPRLFP offer containing 3 clauses:

• Nominal Price: Your work is worth 500 USD.
• Proportion: Before the Nominal Price is fully paid, the total money I pay you shall be 20-25% of the Revenue.
• Revenue Definition: Revenue is defined as Lifetime Total After-Tax Net Revenue from Steam Store.

For convenience, I would like to offer a standardized notation for the example above.

1

NPRLFP(500 USD; 20-25%; Steam After-Tax Net)

Conditional Lifetime Revenue Sharing Right (CLRSR)

A CLRSR offer includes 4 parameters:

• Condition: What condition shall actually activate the offer.
• Duration: How do we define Lifetime.
• Proportion: What percentage of all-store lifetime total after-tax revenue (ASLTATR) shall belong to the contributor.
• Threshold: The offer won’t activate yet, as long as ASLTATR has yet not reached this threshold.

Here is an example CLRSR offer containing 4 clauses:

• Condition: We use at least 5 music tracks in Example Game.
• Duration: Before 2035 December 31.
• Proportion: 10%.
• Threshold: 100,000 USD.

Since the condition can be really verbose, creating a standardized notation is not feasible.

Conclusion

There are places where indie game developers team up, such as r/INAT and r/gameDevClassifieds. I hope the financial instruments described in this article may afford fellow developers convenience in the financial aspect of collaboration and sucess-sharing, allowing more efficient project execution.

Thank you for reading. Also check out our game and Matthew’s wonderful music works.