... the creating company? In a 'normal' process, I reckon there's a company who has made previous games and has generated revenue - they used this revenue to invest in creating new games.
Typically the software team fronts the development cost, then the publisher pays for printing and distribution (though there is a dwindling need for physical packaging in this modern age of digital distribution).
Third party developers normally pay it themselves. That doesn't mean they necessarily have the money in hand though.
Publishers typically own the intellectual property of the game, so basically own it, and in turn pay the developers a royalty set out in their contract. When they need money for payroll or whatever, a lot of times the publishers will give advancements on the royalties. It can get fairly complicated though (start taking into account takeovers, subsidiary companies, overlooked or misunderstood details in contracts, etc. That's why they almost all have lawyers on staff); there are lawsuits all the time over who owns what. Sometimes publishers will fund teams to develop a game (think subcontracting, like you going to Walgreens or something and printing off photos at their booth kinda), but they end up owning it outright and therefore don't pay royalties. It all depends on how the contract is worked out.
Publishers often have inhouse dev teams though, which usually would just be on the publishing company's payroll like any other employee.
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Who funds game development in a normal commercial game development process?
... the creating company? In a 'normal' process, I reckon there's a company who has made previous games and has generated revenue - they used this revenue to invest in creating new games.
@zeropoints: Go
Typically the software team fronts the development cost, then the publisher pays for printing and distribution (though there is a dwindling need for physical packaging in this modern age of digital distribution).
hmmm ok thanks both of ya.
Third party developers normally pay it themselves. That doesn't mean they necessarily have the money in hand though.
Publishers typically own the intellectual property of the game, so basically own it, and in turn pay the developers a royalty set out in their contract. When they need money for payroll or whatever, a lot of times the publishers will give advancements on the royalties. It can get fairly complicated though (start taking into account takeovers, subsidiary companies, overlooked or misunderstood details in contracts, etc. That's why they almost all have lawyers on staff); there are lawsuits all the time over who owns what. Sometimes publishers will fund teams to develop a game (think subcontracting, like you going to Walgreens or something and printing off photos at their booth kinda), but they end up owning it outright and therefore don't pay royalties. It all depends on how the contract is worked out.
Publishers often have inhouse dev teams though, which usually would just be on the publishing company's payroll like any other employee.