How do you release a game so that millions of players will know about it? Where to find funds for marketing, localization, and distribution? Is it worth looking for an investor to invest in the development or contacting a publisher to help with the market entry?
These are questions that almost every developer faces. And here it is important to understand the key difference between a publisher and an investor, as these concepts are often confused.
Below, we will look at who publishers and investors are, what their functions are, and how a developer can choose the right approach for financing and promoting their game.
Who is a publisher?
A publisher is a company that specializes in releasing games to the market and promoting them.
Publisher's functions:
- Financing of the final stages of development;
- Marketing and PR: advertising, work with influencers;
- Distribution: assistance with placing the game on various platforms;
- Localization and support: translation of the game into different languages, technical support;
- Testing and QA: ensuring a quality release.
What are the options for cooperation with a publisher?
- The classic model - developers receive a share of the revenue from game sales (for example, 30-50%), and the rest goes to the publisher, covering all costs related to marketing, localization, testing and release of the game.
- Exclusive contract - the publisher fully finances the game and receives full rights to the game, while the developers receive a fixed paymen
Pros and cons of working with a publisher
Pros:
Comprehensive support
Publishers are actively involved in the development of games and can provide staff to improve the game and its testing.
Marketing and distribution experience
Publishers are engaged in the promotion, localization, and distribution of the game.
Training
Developers can gain valuable experience from cooperation with a publisher.
Cons:
Loss of control over the game
Publishers often set strict schedules and control key decisions about the game.
Short-term strategy
Publishers mostly cooperate until the end of the game's life cycle
Intellectual Property
The IP rights to developed games may become the property of the publisher.
Who is an investor?
An investor is an individual or legal entity who invests in the development of a game with the aim of generating future profits. Unlike a publisher, an investor does not market or distribute the game, but only finances its development and receives a share of the company or a portion of the profits.
Investor functions:
- Financial support for project development;
- Networking and attracting additional resources;
- Related types of support: analysis of prospects and risks, assessment of the business model, etc.
Investor types:
1. Venture funds are organizations that pool investments from several investors and finance startups and projects that have the potential for rapid growth.
2. Angel investors – private individuals who invest money in promising games at early stages, usually investing a small amount of money.
3. Crowdfunding – allows any person to invest funds, and the result of such investments can be:
- their irreversibility (free basis);
- receiving profit from the game in the future;
- getting access to the beta version of the game;
- receiving other benefits related to the created game
What are the possible options for cooperation with an investor?
Among the investment agreements, it is worth highlighting:
- Equity – the investor receives a share in the project in exchange for their investment.
- Convertible notes – initially it is a debt that can later be converted into property.
- Revenue sharing – the investor receives a share of the income from the game until they return the investment with a profit.
Advantages and disadvantages of cooperation with an investor
Pros:
Financial support with no game restrictions
investors provide funding, allowing developers to focus on development without external influence
Opportunities for business development
investors often have a network of useful contacts and can facilitate future growth by attracting new investors
Intellectual property
The rights to developed games usually remain with the developers.
Cons:
High expectations
Investors are interested in scalable growth, so they expect significant profits
Development support is limited
Investors usually have no experience in creating games, so developers have to solve technical and creative issues on their own
Long-term strategy
Investors usually invest in the development studio as a whole, not in a specific game
Key differences between an investor and a publisher
1.Team Focus vs. Game Focus – Investors evaluate developers and their potential, and then the game, while publishers are more interested in a specific game and its market prospects, compliance with their current plans and quality standards.
2.Funding vs. Services – Investors provide capital, while publishers mainly offer other assistance, such as: testing, marketing and distribution.
3.Long-term vs. Short-term partnership – Investors invest for years, while publishers work until the end of the game’s life cycle.
4.Global vs. Local impact – Investors work on a global scale, while publishers may specialize in individual markets, including different game genres.
Who is better to choose?
When should you contact a publisher?
- If the game already has a ready-made prototype or demo version.
- If a large-scale marketing campaign and promotion is required.
- If the developers have no experience entering the international market.
- If there is a willingness to share a share of the revenue or rights to the game.
When is it better to look for an investor?
- In the early stages of development or when there is no product yet, but there is a good idea, concept and a strong team.
- If you need money for R&D (research and development) or long-term development.
- If you have experience in independently launching and monetizing games.
- If there is a readiness to share a share of the company or profit.
Is it possible to collaborate with both at the same time?
Yes, cooperation with an investor and a publisher at the same time is possible, but it is important to build the cooperation structure correctly:
- First, attract an investor to finance early development (pre-production, creating a prototype).
- Then look for a publisher at a later stage (when the game is ready or in the final stage) to cover marketing and distribution costs.
- The consequence: developers will need to share a portion of their profits with both the investor and the publisher.
Given the rapid development of the gaming industry, developers should take the choice of partners for their projects seriously. The choice between an investor and a publisher can significantly affect the future of developers and the possibility of releasing successful games.
So, the choice between an investor and a publisher depends on the developers' priorities:
- If the main goal is financial independence and long-term development, it is worth considering an investor.
- If comprehensive marketing and distribution support is needed, it is better to turn to a publisher.
- If the project is large-scale, requires large investments and expertise at all levels - you can cooperate with both.
Regardless of the chosen model, all agreements between developers, investors, and publishers must be documented - this will help avoid misunderstandings and ensure transparent terms of cooperation
