The Economic of Video Games : the royalty question

New York Times recently ran a story about how the voice actor for the protagonist in Grand Theft Auto IV only earned $100k for his work while the game has already grossed over $600 million.

So how does the games industry reward the people who made the games? The short answer is not well. Compensation really depends on the company you work for, as there is no industry wide standard. For the three games I’ve worked on, I’ve receive around $50k in total bonuses , while the games have sold over 5 million copies total, or a gross of around $300 million.

The days of working on a hit game and get rich enough to buy a Ferrari is over. Publishers will take almost all of the pie, since they foot most of the bill for developing the game.

I am very lucky to have gotten so much in bonuses. There are many developers who have worked many years without seeing a red cent. I have friends who have been lied to repeatedly by their previous companies about receiving bonuses, that they were actually surprised to finally receive one.

The issue of voice actors demanding royalty actually arose during the development of Saint’s Row. We were in the middle of production and have just gotten some initial recording sessions done when we heard that the voice actors were planning a strike as leverage in their negotiations with video game publishers.

The idea that voice actors would get backend royalty before the people who worked for years on the project was offensive to most of the developers. Hell, I was one of the person who pitched the idea of Saint’s Row and I didn’t get any royalty.

So as a backup strategy, plans were made to move recording up to Canada and hire voice actors there if a strike happened. Fortunately, it didn’t have to come to that, since the negotiations ended with better pay for the voice actors, but no royalty either.

I believe the terms were something along the lines of $100 dollars an hour and a minimum of 4 hours per session (second hand recollection, take it with a grain of salt). This is the bare minimum for a random voice actor, the pay for a recognizable voice is much higher. Saint’s Row had voice acting from celebrities and paid accordingly.