Sony pisses off Korean developers

[mckmas8808]

I personally think it's got a lot to do with national pride, Japanese and Korean haven't been historically in that good terms with each other. Now if I've understood even a bit right from good ol' Babelfish translations of various Korean forums they fear that "brain drain" effect will happen on Korean computer entertainment market and this big Japanese company will reap most of the rewards, the cream of the crop so to speak, on both PS3 and PC sectors. You could think Sony might use by time the gained IP also on PSP and so on.

It may not be the most flourishing business model for the biggest game companies in South Korea but the smaller ones should surely benefit to certain degree from such a WA! deal

What does this "brain drain" mean? On the Korean forums what exactly does that mean?

 

[Carl B]

What does this "brain drain" mean? On the Korean forums what exactly does that mean?

It means that it's feared the better of the Korean developers will essentially become perma-members of the Sony cadre. 'Brain drain' refers to the loss in some regard of skilled individuals - in this case a loss of skilled Korean game devs to a Japanese company. It can be used in a number of senses though - educated individuals from a certain city leaving for another, educated individuals from a certain country leaving for another, and educated individuals from a certain company leaving for another. But usually the term's only used when there's a specific root cause the flight can be traced to; in this case an attractive(?) development agreement.

 

[NavNucST3]

I can't believe anyone would defend this, one merely needs to look at the record industry to see how screwed up these contracts really are. I imagine there are a lot of game contracts out there like this, but that in no way, makes this "right". Look at the many recording artists who have died broke do to such "generous" deals as this. I am not saying that most/all publishers don't do this, but if we don't want the game industry to become the record industry, then you should be pissed also, ultimately its up to those devs. to sign the contract, so its in their hands, they could vote with their signatures, so to speak.

If this deal works like a typical recording contract then you will need to have a AAA title just to get back to $0.

 

[Shifty Geezer]

If Korean development doesn't want to 'lose' their talent to Sony (have the UK Sony developers all been naturalized as Japanese citizens and moved to the Land of the rising Sun? ) then they should produce their own funding for developers. You don't see Ninja theory grumbling that their funding is coming from a foreign company...

 

[mckmas8808]

I can't believe anyone would defend this, one merely needs to look at the record industry to see how screwed up these contracts really are. I imagine there are a lot of game contracts out there like this, but that in no way, makes this "right". Look at the many recording artists who have died broke do to such "generous" deals as this. I am not saying that most/all publishers don't do this, but if we don't want the game industry to become the record industry, then you should be pissed also, ultimately its up to those devs. to sign the contract, so its in their hands, they could vote with their signatures, so to speak.

If this deal works like a typical recording contract then you will need to have a AAA title just to get back to $0.

But NucNav it's not like the developers can't make games with other publishers after their initial game though. That's the difference between this deal and your recording artist deal. Singers have to make music for this one company while being rapped, but this Sony deal only covers a particular IP and source code.

Vysez even said that it's normal, so I don't see what the real huge problem is. The real problems seems to be what Sct I/On brought up. It really seems to be this "brain drain" thing that is brothering the Koreans.

 

[Titanio]

But NucNav it's not like the developers can't make games with other publishers after their initial game though.

..and probably get pretty much the same deal.

NucNavST3 - nobody's saying it's right, it's just not a problem specific to Sony, and that is worth pointing out.

 

[cthellis42]

The only bit I think they're pissed about:

"2). Even if the prototype of the game is finished, the quality or marketability could be deemed “lowâ€￾ (a subjective term not clarified by either Sony or KIPA), the entire development cost would need to be paid to KIPA."

If they're talking about the dev team paying back the cost to KIPA.

Otherwise the rest sounds pretty par for the course in this industry. Developers are often not in a very strong position when it comes to negotiating deals with publishers. It's usually very difficult for individual developers to hold on to their IP, for example.

That would appear to be the stickler, and I'm not really sure what is meant by it. I think we don't have the full details. After all, how could Sony expect a developer they are fronting all costs for to pay for much of anything if the project falls through?

Unless, say, the KIPA costs are only a small fraction and therefore would put some risk to the studio for munging up the project as opposed to no risk. (Of course even is such a case, they'd have to do a better job explaining specifically what they mean by "low quality or marketability" and just how they can enact #2.

 

[cthellis42]

I can't believe anyone would defend this, one merely needs to look at the record industry to see how screwed up these contracts really are.

Why? Many things depend on the deal's finer details, but on the surface it would seem to be a way of making something a "1st party project" (or at least quasi-1st party) instead of acquiring the developer outright or entering into some kind of contractual 2nd-party agreement.

While the developer may not gain the bulk of the benefits from that project, if they do well enough they still contribute to the health of their studio, put weight behind their name, and can go forward with other projects in a better position to negotiate with other publishers or re-negotiate with Sony. (Of course it may also just be the first step to them becoming FULLY 1st party. )

Regardless, it would seem to also be an option for smaller studios and completely new studios to make some headway into that market (considering the spiralling costs associated with MMO's now). At least it may well be if #2 isn't a total boning device.

 

[Titanio]

That would appear to be the stickler, and I'm not really sure what is meant by it. I think we don't have the full details. After all, how could Sony expect a developer they are fronting all costs for to pay for much of anything if the project falls through?

Unless, say, the KIPA costs are only a small fraction and therefore would put some risk to the studio for munging up the project as opposed to no risk.

I think as it turns out, KIPA funds the initial prototype phase. So basically, you'd treat that funding as a loan, which doesn't need to paid back if Sony goes further with it. So I actually don't see much of a problem with THAT, but I do with the next bit..that Sony still owns your work even if they decide not to go forward with it. If the developer is to reimburse the costs of prototype development, they should be allowed go away with that prototype and shop it around with other publishers if they wish, IMO.

 

[NavNucST3]

..and probably get pretty much the same deal.

NucNavST3 - nobody's saying it's right, it's just not a problem specific to Sony, and that is worth pointing out.

I mentioned that as well, its not like I don't know everyone else does this, but why exactly should I/we/they be ok with it, thats my issue. I guess I feel that if this doesn't piss people off, then they had no right to complain when EA bought the rights to the NFL or when TAKE2 bought the rights to the MLB (I think we all lost when BOTH of those deals happened).

mckmas: you are correct that artists are locked into a contract for a certain amount of albums(do we even use the word albums anymore) but it is not entirely different when you don't own your IP either.

All I am really saying is that this is not a GREAT way for companies, this is more of a necessary evil. It just sounds like the proponents of this deal are using the "Well, everyone else is/was doing it" argument.

If only I had hit the lottery, I was going to start a Sundance for games....ah well.

EDIT: I want to point out that I am not demonizing Sony for doing this, my contempt is for the industry as a whole, regarding this issue.

 

[cthellis42]

I think as it turns out, KIPA funds the initial prototype phase. So basically, you'd treat that funding as a loan, which doesn't need to paid back if Sony goes further with it. So I actually don't see much of a problem with THAT, but I do with the next bit..that Sony still owns your work even if they decide not to go forward with it. If the developer is to reimburse the costs of prototype development, they should be allowed go away with that prototype and shop it around with other publishers if they wish, IMO.

Yes, but how would the KIPA loan compare to extended development costs later on? I'd agree with that if the project never got much off the ground, but I have a feeling the initial loan would be quite small in comparison to the extended costs of a project that got into any major development phase.

#2 still needs clarification to see if #3 is totally unreasonable or not.

 

[Moonblade]

..., but I do with the next bit..that Sony still owns your work even if they decide not to go forward with it. If the developer is to reimburse the costs of prototype development, they should be allowed go away with that prototype and shop it around with other publishers if they wish, IMO.

Your lines sound very familiar. Wasn't there a case (last year) where some publisher tried to dump a second party contract because the project lacked quality, kept the rights and afterwards finished the game? A FPS I believe.

 

[Titanio]

Yes, but how would the KIPA loan compare to extended development costs later on? I'd agree with that if the project never got much off the ground, but I have a feeling the initial loan would be quite small in comparison to the extended costs of a project that got into any major development phase.

Sure, beyond the prototyping phase, though, Sony and Kipa would have no further involvement. The dev would need to find another publisher..but having a prototype would certainly help them to do that. Often it's difficult to fund the early stages of development to the point where a prototype is ready for presentation to publishers - usually the money comes from bank loans or the dev founder's own money.

The real problem that I can see is that if you're not successful, you have to pay the money back, and you still don't get to keep your work, so you've nothing to show for it (except a hole in your back account). If these translations are correct.

Your lines sound very familiar. Wasn't there a case (last year) where some publisher tried to dump a second party contract because the project lacked quality, kept the rights and afterwards finished the game? A FPS I believe.

Not sure, but it wouldn't surprise me. Although at least in that instance the developer that was "dumped" didn't have to repay dev costs to the publisher up to that point, which is effectively what would happen here! (albeit it, "just" for the prototyping phase).

 

[cthellis42]

EDIT: I want to point out that I am not demonizing Sony for doing this, my contempt is for the industry as a whole, regarding this issue.

Unfortunately, due to the costs involved, this is the way the industry has to operate. Still, I don't see at as NEARLY as bad as the recording industry situation, as A) there are still many more players to appeal to, and B) you're not locked into an extended contract--just the one deal. You may not have complete rights on that work, but at least the studio has gained experience, cash (as Sony doesn't have them locked down for the future, more than likely they want any good developer to be very healthy and willing to deliver more success on their old), and recognition to play off of in the wider market.

Who knows? This many BE the only way for small developers to really stand a chance of delivering a AAA title. It seems Microsoft and (likely) Sony are willing to let smaller developers sell through on their machines as well with small projects, but that still a lower tier. How can they get to the highest one?

 

[Sct I/On]

except a hole in your back account

Or boots out of cement...

 

[cthellis42]

Sure, beyond the prototyping phase, though, Sony and Kipa would have no further involvement. The dev would need to find another publisher..but having a prototype would certainly help them to do that. Often it's difficult to fund the early stages of development to the point where a prototype is ready for presentation to publishers - usually the money comes from bank loans or the dev founder's own money.

Wait... what? The main problem with MMO's is that they ARE money pits and have spiralling costs, and lengthy--LENGHTY--development timetables with many unforseens. I would imagine the outlay during "prototyping" would be overshadowed quickly in extended development.

It seems to me those who would be expecting and following the financing examples you give would never tie themselves down like this (unless it is their VERY last option) and would go the conventional publisher-shopping route for a good long time--if necessary--while scratching along.

 

[Titanio]

I'd see no problem with the model Sony was offering (relative to what others offer..not in absolute terms!) if the dev was allowed to keep their prototype if they were unsuccessful - assuming the financing options from KIPA were competitive, for the prototype (and actually it sounds like they'd just have to pay them back, without interest, unlike a bank loan for example).

Maybe it's not clear, but KIPA funds the prototype, and if you're successful, Sony will fund the rest of the development. It's not like the successful developer would have to then fund the remainder of the development themselves!

 

[NavNucST3]

Unfortunately, due to the costs involved, this is the way the industry has to operate. Still, I don't see at as NEARLY as bad as the recording industry situation, as A) there are still many more players to appeal to, and B) you're not locked into an extended contract--just the one deal. You may not have complete rights on that work, but at least the studio has gained experience, cash (as Sony doesn't have them locked down for the future, more than likely they want any good developer to be very healthy and willing to deliver more success on their old), and recognition to play off of in the wider market.

Who knows? This many BE the only way for small developers to really stand a chance of delivering a AAA title. It seems Microsoft and (likely) Sony are willing to let smaller developers sell through on their machines as well with small projects, but that still a lower tier. How can they get to the highest one?

True, I don't think any industry could be as bad as the "poor" recording industry, I just don't want games to head down that slippery slope.

To answer your latter question, in XBLAs case the developers get 70% of the take, so if they have a breakout game, they could then pool that money into maybe another XBLA title which could lead the way from a cash flow perspective into a traditional optical format game. This should also give them some leverage when talking to publishers, they could say, "We may be small independents, but look at our last two XBLA games we have the n best-selling title(s) on XBLA". I have no clue how they would approach the higher tier in Sony and Nintendos case, without one of those types of deals.

EDIT: Included a link to where I got the 70% from....

 

[Moonblade]

Not sure, but it wouldn't surprise me. Although at least in that instance the developer that was "dumped" didn't have to repay dev costs to the publisher up to that point, which is effectively what would happen here! (albeit it, "just" for the prototyping phase).

Aha! I found it.

According to Spark, the agreement it signed with Activision called for it to make three games, the first of which was Call of Duty: Finest Hour. However, in its complaint, Spark alleges that over the next two years "Activision induced Spark into reducing and delaying certain of its rights under the contract by falsely promising that it would continue to partner with Spark to develop the second and third titles in the Finest Hour line, when in fact Activision had already decided to bring the development of the sequel in-house at Activision so it could realize an even higher level of profit on the sequels than it had on the original game."

The complaint also says that in November and October 2004, Spark submitted "formal sequel proposals" to Activision. Included in these proposals were "specific creative ideas" for a Finest Hour sequel centering on "'Operation Husky (Landing and Taking Sicily),' and included the '[l]anding on the beach with the Big Red One - [a] classic contested beach landing.'" Spark contends that after its ideas were "summarily rejected," Activision studios Gray Matter and Treyarch began work on Call of Duty: Big Red One, which features Operation Husky.

Read the rest here
http://www.gamespot.com/ps2/action/callofdutybigredone/news.html?sid=6132290&mode=all

 

[BTOA]

3). Since the game is slated for the PS3, the entire rights including the source code would be owned by Sony — regardless of whether the title is published or not.

Isn't this the same thing that happens in the IT field?

I don't see why this is so bad on Sony's part, since I have heard of this happening before this Sony conference.