Top Video Game Publishers in 2024: What to Know About Them
Every game developer wants to ensure that their games succeed and stand out in the crowd but there are substantial financial and operational hurdles in their way. More than 10,000 games were released in 2021 alone. Publishing companies can help developers overcome these problems to a certain extent. In this article, we explore services offered by publishers and factors to consider before signing with them.
Video game publisher’s services
Video game publishers publish video games that have been developed internally (in their own game development studio) or externally (developed by an outside studio). They provide services such as :
Financing
Making a game is not cheap. AAA games cost millions of dollars to make and indie games development costs range from 50,000 to 750,000. Publishers provide financing for developers to cover the costs associated with developing and marketing games.
Type of financing
Publishers provide the funds either in a lump sum format or in a periodical interval based on achieving milestones by developers.
Investment recouping & royalty distribution
In return for their investment, publishers will take a percentage of the royalties made by the game. It works in two ways:
- The royalties are shared between the publisher and developers after the publisher has covered all of its costs.
- The royalties are shared regardless if the publisher has recouped its investment.
According to an analysis of 30 publishing agreements, on average, 68% of royalties go to the publisher when there is no recouping clause (Situation 2) and then it switches to 60%/40% distribution in favor of the developers.
Expertise and know-how
Publishers want to ensure that the project succeeds financially which is why they provide expertise and know-how to developers to increase the chance of success. They include:
Game testing
Developers have the tools and teams needed for play-testing video games before launch. This enables the developers to identify bugs and understand the player’s experience which allows them to make a better product.
Market research
Developers conduct market research to find opportunities for games. They can identify areas in a gaming genre that are demanded but under-represented and communicate that with developers. They also can identify the key characteristics that the game must have to have a higher success rate.
Publishing
Publishers handle the distribution of video games both physically and digitally. It means distributing the games to game stores such as Game Stops and digital platforms such as Steam. They also handle the regulatory requirements of selling games in other countries and the translation of the game.
Marketing & PR
Publishers have the know-how and contacts that the developers may lack to run effective marketing campaigns and communications. This also allows the developer to focus on game development and not worry about marketing and PR. They can also help with:
- Managing social media accounts
- Sponsoring influencers in the gaming community
- Community management
What to know as a game developer
If you are a game developer and want to make an agreement with a publisher, you need to be aware of the possible drawbacks.
Creative control
Game publishers tend to interfere with the creative direction that developers have in mind to make the game more appealing to their audience. Developers must negotiate on the level of control that they are willing to let go of during the negotiation phase.
Sequels
The publishing agreement can contain the right of first refusal clause, which means if the developers want to make a sequel to a game then first they have to approach the publisher of the first game. If they refuse it then the developers are free to look for other publishers. This can be problematic if the relationship between developers and publishers is not good.
IP ownership
It is common for developers to retain the IP ownership but some contracts have the transfer of ownership clause that transfers the IP if the contract is breached by the developers.
Not making any money
As mentioned in the investment recouping and royalty distribution section, developers might not receive any money if the publishers have not recouped their expenses.
It is crucial to have a lawyer with sufficient knowledge of the sector to review the agreement before signing.
# | Publisher* | Total Pts.* | Developer & Publisher | Publishing of Indie games |
---|---|---|---|---|
1 | Microsoft | 346 | Developer & Publisher | No |
2 | Sony | 312.9 | Developer & Publisher | Yes |
3 | Humble Games | 309.6 | Developer & Publisher | Yes |
4 | Activision Blizzard | 308.2 | Developer & Publisher | No |
5 | Bethesda Softworks | 306.9 | Developer & Publisher | No |
6 | Capcom | 303.3 | Developer & Publishe | No |
7 | Bandai Namco | 292.7 | Developer & Publisher | Yes |
8 | Sega | 292.7 | Developer & Publisher | Yes |
9 | Electronic Arts | 291.9 | Developer & Publisher | Yes |
10 | 505 Games | 288.5 | Publisher | Yes |
11 | Devolver Digital | 284.8 | Publisher | Yes |
12 | Square Enix | 277.2 | Developer & Publisher | Yes |
13 | DANGEN Entertainment | 265.2 | Developer & Publisher | Yes |
14 | Nintendo | 264 | Developer & Publisher | No |
15 | Koei Tecmo Games | 263.5 | Developer & Publisher | No |
16 | Plug In Digital | 262.7 | Publisher | Yes |
17 | Focus Entertainment | 259.5 | Publisher | Yes |
18 | Annapurna Interactive | 257.3 | Publisher | Yes |
19 | Ubisoft | 254.1 | Developer & Publisher | No |
20 | Raw Fury | 252.8 | Publisher | Yes |
Cem is the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per Similarweb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised enterprises on their technology decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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AIMultiple.com Traffic Analytics, Ranking & Audience, Similarweb.
Why Microsoft, IBM, and Google Are Ramping up Efforts on AI Ethics, Business Insider.
Microsoft invests $1 billion in OpenAI to pursue artificial intelligence that’s smarter than we are, Washington Post.
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Public-sector digitization: The trillion-dollar challenge, McKinsey & Company.
Hypatos gets $11.8M for a deep learning approach to document processing, TechCrunch.
We got an exclusive look at the pitch deck AI startup Hypatos used to raise $11 million, Business Insider.
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