Unit 13 - Understanding the Game Industry - Contracts of Employment
Contracts are an agreement between two parties, in the game industry this is quite often the developers and the publishers. These are usually a written contract that require a signature to make the contract legally binding. There is a lot of important information that is often included in contracts, this includes benefits that you may receive with the company you work for, Inventions that you may have during your time working for the company, a confidentiality agreement and a non-compete depending on if you are high enough withing the company. Some of the benefits available are simple ones like the amount that you are to be paid or any bonus pay. Health insurances could also be included and occasionally a pension plan. There is normally one clause within the contract that states anything you create within your time working at the company automatically becomes property of the company, for example if you create the idea for a game whilst working at EA, the idea would belong to them even if they don't plan on using it. The confidentiality agreement is where the employee must agree not to share any of the companies secrets, this is mainly due to the fact that they dont want anybody to find out about anything the company may have in the works, especially a competing company, the penalties for doing so are also included. Higher level employees like executives are bound to know more about the company so to stop them from giving other companies the current information they sign a non-complete saying that they aren't allowed to work for another company for a certain amount of time.
The development agreement is a type of contract that includes the terms of a development deal, this will include several things, one of the first is the Whereas, this basically says that a publishing company and a development company will work together to make one product which is the published by the publishing company. The terms are what the developers have to work with, for example the money that the publishers will pay the developers and the amount of time that they will have to complete the game. There is also the matter of ownership of the game, in the contract it is decided if the the game(or IP if based on licensed IP) belongs to the development company or the publishing company. It is occasionally split between them, for example the publishers might own the game whereas the developers might own the code for the game. Warranties are are something that both the publishers and developers have to agree to in order not to get the other party into and lawsuits, for example the developers would have to swear that they had not plagiarised any of someone else's source code as to not get the publishers sued and the publishers have to have the right to ask the developers to make a game before they start to. The terms of termination will also be written out, this is what will happen if the deal ends before the game is fully complete.
A license agreement is needed when a game uses an IP that is already owned by somebody else, for example Star Wars being owned by Disney. The publishers need a license agreement before they can start production on the game, this is due to the fact that the agreement will have terms included that tell you what you're allowed and not allowed to add in your game. There are several different things that can be licensed for example maybe you wanted to make a game very loosely based on Star Wars and so only needed the rights to the characters or maybe a few story elements of the movies to be put into the game. The agreement can often be limited to certain platforms for example Xbox One and PlayStation 4, if the publisher wants to have the rights to publish on another platform. The territory is part of the license agreement that states where the game is allowed to be published, if they want it published worldwide then this normally costs more. The contract is bound to run out at some point, this is called a term, a game normally loses popularity from around 3 - 5 years and so this usually how long the contracts last. The cost for the license will be stated in this contract as well, the cost is usually paid upfront and then the royalties are based on the amount of units sold or occasionally percentage based.
NDAs and Confidentiality
A Non-Disclosure-Agreement is when one of the company tells the other information, this could be plans for future games or new technology they have in the works. The other company has to agree not to share this information, if they do then the first company can file a lawsuit against them. Some of them go into more detail than others in specifying that the party that doesn't comply must pay all legal fees. But as long as you're going to keep the secret confidential, those clauses then they won't apply.
http://www.sloperama.com/advice/article58.htm https://www.gov.uk/government/publications/non-disclosure-agreements http://www.inc.com/encyclopedia/licensing-agreements.html