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Chapter 1. 118 Things to Know About Runn... > 3 Things to Know About Your Publishe... - Pg. 2

118 Things to Know About Running a Game Development Company 2 After interviewing dozens of folks, the overall picture painted was so bleak that I thought about calling this book "Bring the Pain" or, as one executive suggested, "Don't Quit Your Day Job." The fact is, like any fun and creative job, there's a lot of competition, and you've got to have a surfeit of talent and a willingness to make a lot of sacrifices. As usual, the question boils down to: "Is the view worth the climb?" If you are interested in making the climb, here are one hundred and eighteen pearls to help you do it. 3 Things to Know About Your Publisher Figure 1.1. Infogrames stock information appears on itsWeb site's home page. #1 What Being a Public Company Means If your publisher is a publicly traded company, it makes predictions to Wall Street about how much revenue the publisher expects to earn each quarter. The stock price of the publisher can rise and fall depending on how close it comes to meeting (or exceeding) that number. The author would like to thank Jeff Hilbert of Digital Development Management (www.dig- forhis assistance in preparing the company illustration appearing at the head of every chapter. Those quarterly revenue predictions are based on the assumption that X, Y, and Z games will be getting released in that quarterly "window." If you are the developer of game X, and your production schedule slips and game X doesn't go out, your publisher is left with what is known as a "revenue hole." In other words, if your game doesn't ship on time, the publisher won't earn the revenue on that game, and it may not meet its quarterly projections. Time is money, literally. So when a company misses its quarterly projection, its share price can suffer. Even if the publisher will release game X in the next quarter and may make up the difference in its next quarter, there is a premium on predictability and on getting money today versus tomorrow. Furthermore, the market can only handle so many games at a time, so slotting more releases into a window may cannibalize sales away from the publisher's other games. #2 What Dealing with the Console Manufacturer Means As you may know, console manufacturers look to license fees (paid by publishers) for a large chunk of their profits. They also exercise significant influence over the games released on their platforms, which takes some control over the development and manufacturing process out of the publisher's hands. Pieces of the process owned by the console manufacturer: