Designer Quandary #2 – The Designer’s Cut
The contact will also stipulate how the designer will be paid on the project. Traditionally, most designer fees were around 3-5% of the MSRP (i.e. full retail price), 5-6% of wholesale price (what the publisher sells to a distributor, usually ~40% of MSRP), or 20-25% of profits.
New designers often balk at the seemingly low fees – but the reality is that when all the costs are accounted for, the “take home” earnings the designer makes can often exceed what the publisher makes. In the first two scenarios (% of MSRP or Wholesale) the designer gets paid for each sale regardless of whether the game turns a profit for the publisher. In effect, the designer is an expense that needs to be paid off the top. In the profit sharing approach, it’s possible that the designer makes less money if the game tanks – but if the game is very successful they may stand to make more. Particularly with crowdfunding, the potential revenues (and profit) under a profit-sharing scheme can be higher if the campaign goes well.Further Reading:
>> A call for change!
- Interesting debate on designer pay