Kuju: There's "more imagination" in business models now

Kuju boss Ian Baverstock has told GamesIndustry.biz that while development costs - particularly in the UK - are high, new kinds of business models are springing up that are helping independent development studios see more revenue than a simple publisher advance alone might have done.

"The biggest issue with development cost is obviously that it's harder to make royalties back on something that's just that much more money in the first place," he explained in an interview at Games Convention in Leipzig. "But I think we're starting to see evolution of business models for independent developers.

"Publishers are starting to recognise that if you're spending huge amounts of money, the developer's not going to be sitting there expecting to make royalties back unless it's a mega hit. So there's got to be some way of sharing that upside with the developer."

And the way that is manifesting itself is in a variety of deal structures, moving away from a one-size-fits-all publisher advance.

"We're just seeing a wider range of models - there are more projects which are non-royalty bearing and are just work-for-hire, people are doing more deals where the recoupment point and where the developer starts to see royalties is defined in terms of the number of units shipped rather than just the old model of earned out development advance," he said.

"I'm not saying everything's like that, but there is more imagination being displayed by publishers, because if you want a developer that's in there for the upside and the long term, you have to think carefully about the size of the development budget, and what that means in terms of recoupment point."

The full interview with Ian Baverstock, in which he also discusses the blossoming Kuju empire and what being independent really means, is available now.