Contracts, legal considerations, and statements of work

💰 Revenue Share

Revenue share determines how profits (net revenue of UA) are split between the developer and publisher, typically based on:

🔹 Risk & Investment – More funding = lower revenue share for the developer.
🔹 Market Potential – Projected higher-performing games get better splits.

🔹 Long Term Relations – Normally if the studio is tried and tested with the publisher they get better splits.


🏢 Studio Burn Coverage

Burn coverage determines if the publisher funds the studio’s operational costs or not, this could also be done on the title/project level:

🔹 Full Coverage – Publisher covers all costs but takes a bigger revenue cut.
🔹 Partial Coverage – Some funding, but better long-term revenue for the studio.
🔹 No Coverage – Developer self-funds but keeps more revenue.

If milestones (statement of works) aren’t met, funding may be delayed or cut off.


📊 Commercial Terms

Beyond revenue share and burn, contracts define:

🔹 Recoupment Terms – Publisher may reclaim investment before revenue split.
🔹 Bonuses/Incentives – Performance-based financial rewards.

Transparency here is key to avoiding legal surprises.

🎮 IP Ownership

🔹 Developer-Owned IP – Studio retains full control over sequels/licensing.
🔹 Publisher-Owned IP – Publisher controls future use of the game.

🔄 Sequel Rights

Publishers may legally have right of first refusal on sequels:

🔹 Exclusive Rights – Publisher gets first refusal.
🔹 Limited Rights – Studio can pitch elsewhere after a set time per the contract.

💰 Buyout Clauses

🔹 Game Buyout – Publisher purchases full IP rights of the game, only.
🔹 Studio Buyout – Publisher has the option to acquire the studio and bring them in-house.


📑 Statement of Work (SOW)

A SOW outlines everything the studio must deliver, including deadlines, milestones, and feature expectations.

📌 What’s Included?

🔹 Development Milestones – MVP, Retention, Monetisation, Soft Launch, Hard Launch, On-going.
🔹 Feature Requirements – Core loop and mechanics, meta systems, and live ops.
🔹 Testing & QA Expectations – Performance standards and bug thresholds, this could be done on the publisher or developers side contract depending.

❗ What Happens if You Miss Deadlines?

🔹 Payment Delays – Funding may be postponed.
🔹 Contract Termination – The deal may be canceled.

📌 Be realistic with timelines—rushing leads to poor quality and risks the deal falling apart.


📢 Final Thought: Contracts Define Your Game’s Future

Signing a publishing deal is as much a business decision as a creative one. Understanding contracts ensures you:

✅ Get fair financial terms
✅ Retain control over IP & sequels when possible
✅ Avoid restrictive clauses that limit future opportunities
✅ Meet SOW expectations to maintain good standing and complete project

📌 Keep realistic expectations, negotiate where possible and consult legal experts before signing.