Follow the money

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Shard Garden's deal

The publisher pays a US$2 million advance and spends US$1 million with outside marketing agencies. Both are recoupable: US$3 million in all.

The store keeps 30%. The rest splits 50/50, and the studio's half repays the US$3 million first. Kai asks: how much must Shard Garden sell before the studio sees a royalty?

Try it

Follow the money

Tap a sales total to run it through the waterfall. Find the one where money first reaches the studio.

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Quick check

Shard Garden sold US$8 million, and the studio got no royalty. Why?

  1. The store kept US$2.4 million, and the studio's US$2.8 million half did not yet cover the US$3 million
  2. The publisher broke the contract
  3. Royalties are only paid in the second year
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The store kept US$2.4 million, and the studio's US$2.8 million half did not yet cover the US$3 million

US$8 million is far more than US$3 million, but only 35 cents of each dollar of sales goes to the studio's side. US$2.8 million is still US$200,000 short.

The break-even point

Every US$1 of sales sends 35 cents to the studio's side: 70 cents after the store, then half of that.

So the US$3 million is repaid at US$3 million divided by 0.35: about US$8.6 million in sales. That is the deal's break-even point. Every sale after it pays the studio 35 cents.

Find break-even

Remy adds US$500,000 of outside translation to the recoupable costs. Now US$3.5 million is owed. Where is break-even?

  1. US$10 million in sales
  2. US$8.6 million in sales
  3. US$3.5 million in sales
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US$10 million in sales

US$3.5 million divided by 0.35 is US$10 million. Every recoupable dollar takes almost US$3 of sales to repay.

Plan without the royalty

Theo's cash plan counts no royalty until sales pass break-even. In this contract, the advance is repaid only from sales: if Shard Garden sells less, the studio owes nothing more. Some contracts say otherwise, so Theo checks.

But the team still needs pay after launch, so the plan names where that money comes from.

Quick check

Cutting the recoupable marketing spend moves break-even to a lower sales total.

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True

Less to repay means fewer sales to repay it. US$500,000 less recoupable spend lowers break-even by about US$1.4 million in sales.

On the studio board

The studio adds a decision to the board:

Publisher deal: break-even at about US$8.6 million in sales. Every recoupable cost is approved by Theo first. No royalty in the cash plan until break-even.

Bolt says: Next: risks, the things that could blow up the plan.

Fact-checked 12 October 2026