Publisher deals, line by line
Read past the advance
The publisher's offer for Shard Garden runs to 30 pages. Kai reads the advance and the split. Theo, who keeps the studio's books, reads something else: the order in which money flows.
That order is called the waterfall. Each level fills before any money spills to the next.
Shard Garden's waterfall
In this offer, every sale flows down three levels:
- The storeKeeps its fee first: 30% here. What is left is the net revenue.
- The recoupThe studio's half of the net revenue repays the advance first.
- The royaltyOnly after that does the studio's half reach the studio.
Quick check
Theo traces one US$10 sale. The store keeps 30%, and the rest is split 50/50. How much goes to the studio's side, to repay the advance?
- US$3.50
- US$5.00
- US$7.00
Show the answer
US$3.50
The store keeps US$3, leaving US$7 of net revenue. The studio's half is US$3.50, and until the advance is repaid, it all goes to the publisher.
True story: a publisher shows its contract
In December 2020, the Swedish publisher Raw Fury published its own publishing agreement, free for any developer to read.
Simon Carless, who analyses game sales, summed up its terms: "Funding amount + 15% gets recouped at 100% publisher recoup rate", then a "50% net revenue split after recoup". Raw Fury's page explains what counts: "if there isn't an invoice from an external company, it's not a cost that goes to the recoupable budget."
Its own staff's work never adds to what the developer must repay.
Source: Raw Fury: Developer resources and publishing agreement, rawfury.com
Three lines that move the money
- The recoup rateAt 100%, all of the studio's share repays the publisher first. Some deals send part of it, say 20%, to the studio from the first sale.
- A mark-upRaw Fury recoups the funding plus 15%, so US$500,000 becomes US$575,000.
- Recoupable costsMarketing and services bought from outside companies are often added to what must be repaid.
Do the math
1Advance US$500,0002Mark-up 15%3Recoup rate 100%
How much must the studio's share repay before Remy sees a royalty?
- US$575,000
- US$500,000
- US$75,000
Show the answer
US$575,000
15% of US$500,000 is US$75,000, so the publisher recoups US$575,000. At a 100% recoup rate, the studio gets nothing until then.
Why the recoup rate matters
Carless warns that a 100% recoup "often means that you need immediate post-launch funding from elsewhere to keep operating as a company."
The advance pays for making the game. After launch the team still needs salaries while it fixes bugs and ships updates, and at 100% no sales money arrives until recoup.
Quick check
In launch month, the studio's half of the net revenue is US$100,000. With an 80/20 recoup, how much reaches Theo's bank account?
- US$20,000
- Nothing until recoup
- US$100,000
Show the answer
US$20,000
At 80/20, 80% of the studio's share repays the publisher and 20%, here US$20,000, goes to the studio from the first sale.
Ask before you sign
- Who owns the IP?Sequels, toys and films belong to whoever owns it.
- What is the recoup rate?100%, or a share to the studio from the first sale?
- What is recoupable?Which costs are added to the advance, and who approves them?
Quick check
With a 100% recoup rate, the studio receives part of its share from the first sale.
- True
- False
Show the answer
False
At 100%, the studio's whole share repays the publisher until the advance, any mark-up and any recoupable costs are covered.
Run the numbers
Theo wants one number before the studio signs: how much Shard Garden must sell before the studio earns a royalty.
Bolt says: Next: follow the money through Shard Garden's own deal.
Fact-checked 12 October 2026
- Raw Fury: Developer resources and publishing agreement rawfury.com
- GameDiscoverCo (Simon Carless): What makes for a good game publishing contract? newsletter.gamediscover.co