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Definitions of Gross and Net Sales > Net Sales - Pg. 185

The Publishing Contract Note 185 TIP Keep the cost of sublicensingin mind when selecting apublisher and negotiating theterritory of a contract. Itmay not make sense to grantworldwide rights to a publisher with distribution inNorth America only. Definitions of Gross and Net Sales The publisher will want to deduct certain expenses from revenue received in connection with the game (or licensing products and entertainment). Just as the publisher recoups its cash outlays for development of the game, it will want to recoup certain cash outlays for selling the game. Which of these outlays are fair to recoup and which are not is the subject of negotiation between parties. Getting from "gross" to "net" refers to the set of expenses deducted to arrive at the royalty base , the number from which you will receive your royalty percentage.