The video game industry operates through various deal structures that define the financial and creative relationships between developers, publishers, and other stakeholders. From publishing and licensing agreements to co-development and porting deals, these contracts determine how games are funded, developed, and distributed.
Peter Lewin, a video game lawyer, has shared insights into the key types of deals he regularly encounters. In this article, we expand on those deal types with real-world examples to illustrate how they function in practice.
Publishing Deals
A traditional publishing deal involves a publisher funding and handling the distribution of a game, usually in exchange for exclusive rights on specific platforms. Developers typically retain ownership of their intellectual property (IP), but in some cases, the publisher may acquire those rights.
Financially, these agreements are usually structured around “net” revenue shares, meaning developers receive a portion of the earnings after expenses such as marketing and platform fees are deducted.
The publisher is responsible for getting the game into the market, handling PR, localization, and advertising, and often working with platform holders to ensure successful launches. In some cases, publishers provide development funding upfront, recouping their investment from future sales before sharing profits with the developer.
Real-Life Examples:
- Epic Games Publishing (2020): Epic launched its publishing division with developer-friendly terms. They fully fund development costs, allowing developers to retain their IP and split at least 50% of the revenue once costs are recouped. This model ensures developers maintain creative control while benefiting from Epic’s financial backing.
- EA Originals Program: EA funds indie games under this label, covering development costs and allowing developers to retain their IP. Once EA recoups its investment, all additional revenue goes to the developer. Notable games under this program include A Way Out by Hazelight Studios and Fe by Zoink.
Co-Publishing Deals
In co-publishing agreements, publishing responsibilities are divided between two parties, often a developer and a publisher.
This setup allows the developer to take on roles traditionally handled by the publisher, such as managing age ratings, localization, or marketing efforts. The publisher still provides support but shares more of the operational and financial burden with the developer.
The revenue split and level of control depend on the specifics of the agreement, making these deals highly flexible.
Real-Life Example:
- EA Partners Program: Electronic Arts (EA) established the EA Partners program to collaborate with independent developers. Through this initiative, EA co-publishes games by providing distribution and marketing support while developers retain their IP rights. Notable titles released under this program include Crysis by Crytek and Brütal Legend by Double Fine Productions.
Sub-Publishing Deals
Sub-publishing agreements occur when a primary publisher sublicenses its publishing rights to another publisher, often to navigate specific regional markets or leverage specialized expertise.
This approach is common when dealing with regions that have strict regulations, such as China, or when a global publisher wants to partner with a company that has deep local market knowledge. These agreements allow games to enter markets they otherwise might not have been able to access.
Real-Life Example:
- Pocketpair Publishing and Surgent Studios (2025): In January 2025, Pocketpair, the creator of Palworld, announced the launch of Pocketpair Publishing, a new division aimed at supporting indie developers. Their first project is a standalone horror game developed by Surgent Studios, showcasing a sub-publishing partnership where Pocketpair provides funding and publishing support while the developer focuses on game creation.
Work-for-Hire Agreements
In the video game industry, work-for-hire agreements are contracts where one party (such as a developer or publisher) commissions another party (like an external studio or individual contractor) to create specific content or provide services for a game.
Under these agreements, the commissioning party retains full ownership of the resulting intellectual property (IP), ensuring they have exclusive rights to use, modify, and distribute the work as they see fit.
This model is commonly used for tasks like art creation, music composition, or even full game development, allowing companies to leverage external expertise while maintaining control over the final product.
Real-Life Example:
- Ninja Theory and Capcom – DmC: Devil May Cry (2013): Ninja Theory, a British game development studio, was contracted by Capcom to develop DmC: Devil May Cry, a reboot of the popular Devil May Cry series. In this arrangement, Capcom retained ownership of the Devil May Cry IP, while Ninja Theory provided development services to create the game. This partnership allowed Capcom to revitalize the franchise with fresh perspectives and gameplay mechanics, while Ninja Theory contributed their development expertise under a work-for-hire model.
Co-Development Deals
Co-development agreements involve a collaborative partnership between two or more parties, typically game development studios, where responsibilities such as funding, design, programming, and marketing are shared.
In these arrangements, each party contributes its unique expertise to the project, leading to a more balanced distribution of creative and technical tasks. Intellectual property (IP) ownership and revenue sharing are negotiated based on the contributions and agreements of the involved parties, resulting in a variety of structures tailored to the specific partnership.
Real-Life Example:
- FromSoftware and Bandai Namco Entertainment – Elden Ring (2022): FromSoftware, renowned for its expertise in game development, partnered with Bandai Namco Entertainment, which provided publishing and marketing support. This collaboration allowed FromSoftware to focus on the creative and technical aspects of Elden Ring, while Bandai Namco leveraged its global distribution networks to ensure the game’s widespread release. The partnership exemplifies a co-development model where both parties contribute significantly to the project’s success.
IP Licensing Deals
Intellectual Property (IP) licensing deals in the video game industry involve a company (the licensee) obtaining the rights from an IP holder (the licensor) to use specific characters, settings, or narratives in their games.
These agreements enable developers to create games based on established franchises, attracting fans of the original IP and potentially reaching a broader audience. Licensing terms can vary, often involving upfront payments, royalties, and specific conditions regarding the use of the IP.
Real-Life Example:
- Electronic Arts and Star Wars Franchise: In 2013, Electronic Arts (EA) secured an exclusive multi-year licensing agreement with Disney to develop games set in the Star Wars universe. This deal led to the creation of titles such as Star Wars Battlefront and Star Wars Jedi: Fallen Order, allowing EA to leverage the expansive lore and characters of the Star Wars franchise to attract a dedicated fan base.
Porting Deals
Porting deals involve adapting a game from its original platform to one or more different platforms, such as moving a game from PC to console or from one console to another.
This process often requires significant technical adjustments to account for differences in hardware capabilities, control schemes, and performance optimization. Porting allows developers to reach a broader audience by making their games accessible across multiple platforms.
Real-Life Example:
- Iron Galaxy and Uncharted: Legacy of Thieves Collection (2022): Iron Galaxy, a game development studio known for its porting expertise, collaborated with Naughty Dog to bring the Uncharted: Legacy of Thieves Collection to PC in 2022. This partnership involved adapting the acclaimed Uncharted series, originally exclusive to PlayStation consoles, for PC players, expanding the franchise’s reach.
- Virtuos and NieR:Automata The End of YoRHa Edition (2022): Virtuos, a global game development company, collaborated with PlatinumGames to port NieR:Automata to the Nintendo Switch. Released in October 2022, this version, titled The End of YoRHa Edition, was praised for its technical performance and was hailed as a “miracle port.” Virtuos successfully adapted the game to the Switch’s hardware, maintaining the original experience for players.
Blended Deal Structures
In the video game industry, deal structures often combine elements from various traditional models to create agreements tailored to the specific needs and strengths of the involved parties.
These blended structures can include aspects of publishing, co-development, IP licensing, and work-for-hire agreements, resulting in unique partnerships that leverage the resources and expertise of each entity.
Real-Life Example:
- Remedy Entertainment and Epic Games – Alan Wake 2 (2023): Remedy Entertainment partnered with Epic Games to develop and publish Alan Wake 2. In this agreement, Epic Games provided funding and publishing support, while Remedy retained ownership of the intellectual property and creative control over the project. This deal exemplifies a blended structure, combining elements of publishing support with IP ownership retention by the developer.
Conclusion
The video game industry thrives on diverse deal structures, each tailored to the needs of developers, publishers, and investors. Understanding these agreements is essential for navigating the business of game development effectively.
