The gaming industry is at a crossroads, and one publisher is daring to challenge the status quo! Hooded Horse's CEO, Tim Bender, is making waves by publicly criticizing standard game publishing agreements, arguing they unfairly burden developers. He believes these contracts often contradict fundamental principles of fairness and efficiency. But here's where it gets controversial... Bender's stance challenges the very foundation upon which many publisher-developer relationships are built.
Bender, the founder and chief executive of the company behind the highly anticipated game Manor Lords, recently spoke to PC Gamer, outlining his company's unique approach to developer contracts. He argues that the prevailing structure of legal agreements in the gaming sector "violates a lot of principles of what's an efficient contract." He emphasizes that the risk involved in game development and publishing should be distributed more fairly, with the party best equipped to handle that risk bearing the brunt of it. And this is the part most people miss... It's not just about altruism; Bender believes a fairer system ultimately benefits everyone in the long run.
Drawing on his legal training, Bender explained that well-structured contracts should adhere to certain principles designed to benefit all parties involved. "One of the principles is that risk should be borne by the party best able to bear that risk," he stated. This means the publisher, with its greater financial stability and resources, should shoulder a larger share of the potential downsides.
To put his beliefs into practice, Hooded Horse employs a 'standard' contract that grants developers a generous 65% of the game's revenue. While the publisher acknowledges taking a larger cut if they significantly fund the game's development, a key element of their contract is the absence of a 'recoup' clause. This means Hooded Horse doesn't automatically get its investment back first, before the developer sees any profits. This is a major departure from industry norms.
Bender goes so far as to call the practice of publishers recouping their costs first as "fundamentally stupid." He argues that this system can stifle promising games. "There's a lot of games that come out, maybe they had a little bit of rough launch, but could have recovered, or maybe they had a fine launch, but it wasn't good enough to overcome some giant recoup term where the publisher was taking all their money back first," he explained. He believes that without the pressure of immediate recoupment, these games would have a better chance of success, fostering a healthier and more innovative development environment.
"No publisher out there is making its money from recouping and dragging every last dollar out of things that underperform. Publishers make their money on the games that go well. If you don't have these recoup terms, there's more chances those other games go well. The developers are better incentivised, better able to create things. Everyone's better off," Bender concludes. He emphasizes that a more equitable distribution of revenue incentivizes developers, leading to better games and, ultimately, greater success for both parties.
It's also worth noting that Hooded Horse has taken a strong stance against the use of generative AI in game development. Last year, Bender declared that his company would not collaborate with studios employing this technology, describing it as "cancerous." This ethical stance further underscores Hooded Horse's commitment to fair and responsible practices within the gaming industry.
So, is Bender right? Are traditional publishing contracts inherently unfair to developers? Is Hooded Horse's approach a viable model for the future of the industry, or is it simply unsustainable in the long run? What do you think about the role of recoup clauses in game publishing? Should developers retain a larger share of the revenue, even if the publisher takes on the majority of the financial risk? Share your thoughts in the comments below!
