WB Using Game Reviews To Calculate Royalties

Thanks to The Hollywood Reporter for its article discussing Warner Bros. Interactive's decision to use average review scores in calculating the royalty rates videogame makers must pay to WB. The article explains: "Games based on Warner Bros. licenses must achieve at least a 70% rating [calculated via GameRankings.com and similar services], or incur an increase in royalty rates", with WB's Jason Hall commenting: "An escalating royalty rate kicks in to help compensate us for the brand damage... the further away from 70% it gets, the more expensive the royalty rate becomes... If the publisher delivers on what they promised -- to produce a great game -- it's not even an issue." However, Bruno Bonnell, CEO of Atari, makers of Enter The Matrix, which didn't include this contract clause, comments: "We sold four million copies. That's $250 million worldwide... and Warner Bros. would penalize us because we didn't achieve 70%? Are they joking?"

Comments

Very reasonable

[JMZero]

At one point, "The Matrix Online" was a game license that was very valuable - a marquee game. There was a lot of goodwill out there. "Enter the Matrix" exchanged a lot of that goodwill for money (as did the last two movies).

Now they could have got money out of that franchise with anything from any developer. But if the game was excellent, they would have retained a lot more goodwill - and possibly helped maintain the franchise in the face of the lackluster sequels. That could have been worth much, much more than these sales figures.

Look at the value Ubi Soft has created in the "Prince of Persia" franchise. PoP was dead, no value. Now it has lots, even if Sands of Time didn't sell as well as it should have. Sega is still milking Sonic the Hedgehog on the basis of a couple good games a decade ago.

These things have tremendous, very real value. It makes sense to protect this value via contract - and pegging things to game reviews is as good of an idea as I can think of.