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Licensing 101 – Getting a license for your game

I would say this is easily the topic I’m most often asked about.

Licensing is an enigmatic beast that looms with uncertainty in the background. Everyone has a favorite Intellectual Property (IP) and would love to make a game for it right?

This is the first step in learning to slay that beast.

Overview


At its core, licensing is nothing more than paying someone else for the right to make your own product using their IP.

Many factors go into securing and producing any given license, but there are some guidelines that can help you navigate the murky waters.  There are typically a few things within any licensing agreement you will pay particular attention to:

  • Minimum Guarantee
  • Advance
  • Term
  • Royalties
  • Distribution
  • Marketing
  • Territories
  • Insurance

We’ll go into each one in more detail later.

Before we get started, there are two terms we should explain.

Licensor – the entity that owns the license.

Licensee – the entity that is asking permission to use the license.

 

Why do you want to license?


Think about this one very hard. What are you going to get from a license that you can’t bring to the table yourself? Is using a license going to be beneficial enough to offset the extra time and expense?

If you have a game, and it’s good, why wouldn’t you develop your own theme?

If the answer to that question is that you want to make more money or that it will sell better with the license, you may want to rethink why you are making a game in the first place.

Licensing is not a magic bullet to sell things.

 

But Erik, didn’t YOU just make a game with a license?

Why yes, I did! And here is my answer to why we used the license:

THE GOONIES Playing Cards have been in the top three playing card decks that we have sold year after year. So we know there is a high demand for the property.

Also, we already had the license, so there wasn’t any additional incurred cost for us.

And most importantly, we love The Goonies and wanted to have an awesome game that we wanted to play and that we could share with fellow fans of the film.

So we teamed up with the Fleeples (Matt Riddle and Ben Pinchback) and we asked them to make an awesome cooperative card game for us. And they did…

 

Demand


How popular is the IP that you want? Something like Star Wars (my personal holy grail) is going to be much harder to get than, say, Gobots. Don’t know what a gobot is? Think of very sad, unemployed transformers.

The current demand is not only going to dictate availability for your category, but also how much its going to cost you. It will also have some bearing on where you sell as the target audience for each is different.

You wouldn’t sell My Little Pony in a motorcycle shop, just like you wouldn’t sell Harley Davidson merchandise in a gaming store.

 

Category


You mentioned my category, what’s that?

A category is the product type that you are selling. A tabletop board game is different than a digital board game. Pants are different than shorts, or skirts, or kilts.

There is typically a limit to how many vendors a licensor will allow for any category. You wouldn’t want to make a game with a license knowing ten other companies were using that exact same theme would you?

 

Minimum Guarantee (MG)


This is the amount that you promise to pay no matter what happens. So if you make a product and it sits on shelves and nobody buys it, you still have to pay this amount.

The more you guarantee, the more likely you are to do something with the brand. Always look at contracts from the licensor’s point of view.

They’re looking to maximize Revenue and Brand Recognition, while trying to minimize risk.

 

Advance


This is a subset of the Minimum Guarantee that you pay, you guessed it, in advance. Normally paid when the contract is executed (signed), this amount can range anywhere from 0-100% depending on the contract.

The advance is applied to your Minimum Guarantee, so you’ll deduct that amount from the total that you owe the licensor over the life of the contract.

The amount is normally based on the amount of risk that is assumed. If you’re a small company without a strong track record, you’ll pay more. It’s also a way for you to show your commitment to the license if you can afford it. Kind of like buying a house. If you put down a 50% deposit, you’re probably not going to bail on the other 50%.

 

Term


How long do you want the license for? You probably want it forever, but that’s a really long time for anyone to commit to something.

Instead, you’re more likely to get a contract term of 2-3 years. Remember that you’ll have to manufacture, market, and sell your product during this time so be sure you can make your minimum guarantee.

 

Royalties


This is the percentage that the licensor gets per sale. So for widget A you may pay them 15% on the sale price.

But wait, what’s the sale price? Is that the price the customer pays or the price that I sell to a distributor for? Does that include my shipping costs?

That all depends on how it was setup in your contract. You may have different percentages based on wholesale, distributers, direct to consumer, FOB, etc.

There are a lot of terms in this particular part of the contract that you really need to understand. Terms like FOB and landed.

The important thing about royalties is making sure you can still make money at the end of the day. Let’s say you have a $10 game that you sell to distributors at 60% off so you make $4. Out of that, you may need to pay a 12% royalty fee, which is $0.48. If that game costs you $2 to make and $0.35 to ship, your total profit on that is $1.17 (assuming you don’t have any overhead expenses like artwork, design, advertising, etc.). How many games would you have to sell at $1.17 to make it worthwhile? How many games would you have to sell to make enough to pay your minimum guarantee?

Tabletop boardgame breakdown

 

Distribution


“Hey Disney, I want to make Star Wars Playing Cards and I know I can sell them, all my friends love Star Wars.”

Probably not going to cut it. They’ll want to know who carries your current products.

What stores are you in? How many units do you currently sell? At what price? What is your annual revenue? How much of that comes from licensing?

It’s a bit of a Catch-22, you have to already have had some success in order to get a license to be more successful.

 

Marketing


This goes hand-in-hand with distribution. A licensor doesn’t just care about the money, they want to know how you are going to help boost their brand and not just the other way around. What are you going to do that is going to help amplify their signal in the marketplace?

Sometimes there will be a clause that you need to make a monetary contribution to the licensor’s marketing budget. This is usually a percentage in addition to the royalty that is already being paid.

 

Territories


Have fun with this one.

So you do well selling on Amazon in the US but you only sold five units in Singapore last month on your website?

You’re probably only going to get the US as a territory.  A territory is where you can sell your product.

Remember all those questions you had to answer above in the distribution section? You’ll need to be able to answer that for each and every territory that you want to sell in.

Territories are typically broken down by continents and/or countries. So it will look something like the following:

  • US
  • Canada
  • Mexico
  • South America
  • UK
  • EU (with additional fragmenting)
  • Japan
  • Asia
  • Australia / New Zealand
  • Africa

By no means a comprehensive list, but should give you an idea.

You’ll need to develop your global presence with other products to help get worldwide coverage.

There is a loophole though. There are distributors in these territories that CAN sell your products, so sell directly to those distributors instead of trying to obtain the licensing rights. Ask your contact about this, they probably won’t volunteer it.

Insurance


There are a lot of different types of business insurance. Some cover your product in case someone is injured by it. Some cover lawsuits from staying stupid things online. Some cover lawsuits from infringing on copyright or trademarks.

Some of these are pretty standard for a licensor to ask for and have themselves added onto the insurance policy.

Depending on the limits of the coverage, you could be looking at anywhere between $5,000 – $20,000 on average per year in insurance costs.

 

Negotiation


Throughout all of this, your negotiation skills and ability to present your case are going to be key factors in what kind of a deal you get. Poker is a game that you can play well by observing how others react and knowing the numbers behind the game, this isn’t much different.

You wouldn’t pay full sticker price for a car would you? If so, I have some beachfront property you may be interested in.

 

Approvals


You’ll normally need to submit things for approval at several points in the process to be able to move forward. There is usually a concept, development, and final stage involved.

The concept is where you present your ideas. It’s good to have a lot of your layout and design work done, usually close to what you think the final product would be.

But don’t worry, legal will make sure that you have to make changes! Legal will always have input into what has to change, and it will be different and unexpected for each and every property that you deal with. Even within the same organization.

You’ll continue this process for several iterations and it could take weeks or months to get all the way through. Then finally, you’ll create the product and submit a final sample for review. This is the product as it will appear on store shelves out in the wild.

The best example of seeing this in action? Check out Beyond The Tank, Season 2, Episode 6 and watch some of the hurdles the Happy Feet guys had to go through. What they show is tame, and you’re not meeting with any account executives in person unless you’re getting them on TV.

So bottom line is, be ready to make lots of changes. Be prepared to change the design you think is perfect because there will be legal reasons why you can’t use it. And most of all, be prepared to add lots and lots of time to your timelines for approvals.

 

Likenesses


If you want to use an image that looks like one of the actors, then you need to get permission.

Sometimes the licensor that you are dealing with has the rights for these, sometimes they don’t. It’s important to ask about these upfront because it could add additional time and expense to your project.

There is a reason why you often see products for your favorite shows with people on them that look nothing like the person that portrayed them. It’s because they weren’t able to get the licensing rights or because it was cost prohibitive to do so.

 

My Perspective


Licensing is complicated. At times it can be tedious and boring. It automatically increases the timeline of anything you do and reduces your creative control.

But it can be very rewarding as well. When you are finished, with an awesome product based on one of your favorite properties, it’s totally worth it.

 

Want Help?


We can help you get licenses. We know people.

You can contact us at licensing@albinodragon.com to inquire about potential deals we can help broker for you.

 

 

 

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January 2016 Reviews

One of the great things about starting Albino Dragon is that it gives me a chance to connect with other fans of things that I am passionate about. It never gets old to talk about favorite movies, comics, etc. It’s like being a part of a secret club where you can speak your own language and everyone grins and nods slyly to your obscure (and not so obscure) pop culture references.

So I thought, “hey, I’d really like to start sharing some of the things I’ve seen, watched, read, or played.”

The original plan was to do it on a monthly basis, but after looking at this first write-up I realized I consume way too much content to not do it on a weekly basis. So this one time, I will catch-up to the end of January and attempt a weekly roundup thereafter.

I’ll do my best to make these as spoiler-free as possible.

Note: These were written at the beginning of February while I hunted for a good review plug-in for the site. I never found one that I really liked, so I finally had to just post this and continue to work on a  better format. 

Books

The Martian (4 stars) – I was stuck for six hours in a parking lot at a convention so I started reading this. While there are some things that are really far-fetched, I found it to be quite entertaining. It gets bogged down by some heavy number-crunching at times, but the story felt like it was continually moving forward. And now I constantly make jokes about potatoes.

Synopsis – Man gets left on mars, overcomes a million to one odds. A million and one times.

Movies

The Martian (3 stars) – I was a bit tainted by the book since I thought it was better. The movie skipped over some major plot points and I never really felt Matt Damon’s character was subjected to the same struggle as his novel counterpart. The journals were a perfect excuse for some exposition, but it wasn’t used to explain some of the seemingly unrelated sub plots.

Synopsis – Man gets left on mars, overcomes a million to one odds. A million and one times. With less detail.

Project Almanac (3 stars) – You’ll quickly find that I’m a big fan of time travel movies (there are two on this list alone). The idea of paradoxes and infinite recursion lend themselves well to some really fun stories. This one fell a bit flat for me in that department. The setup was interesting, but the ending felt like a letdown. It’s also filmed in a Blair Witch style documentary fashion, which I’m not a big fan of.

Synopsis – Kids build time machine and go to Lollapalooza. Boy tries to get girl.

Synchronicity (2 stars) – Of all the movies I watched in January, this was the one I was most looking forward to. Perhaps that is also why it was the one that was the most disappointing. The plot dragged on and at times it felt like the story was written around a budget that had to continue using the same footage to hit its ninety minute playtime.

Synopsis – Man goes back in time to get a flower. Boy tries to get girl.

Terminus (2 stars) – I almost wanted to give this one three stars because I felt it was slightly better than Synchronicity. But in the end, it was still a long, drawn-out film that didn’t really go anywhere.

Synopsis – Man finds alien in the forest to care for. Secret government agency tries to take alien.

Games

Bear in mind that all of these were only played once or twice so I wouldn’t consider them full reviews as much as first impressions.

Rune bound (3 stars) – I like the premise of these game. You go around a D&D style world completing quests and leveling up your character with abilities and loot. What I didn’t like was that we expected it to be a 2-3 hour game that turned into a 5-6 hour game.

By the end, it felt like we could have all played our turns in a solo game and it wouldn’t have made much difference since we didn’t interact with each others’ characters hardly at all. If I had six hours to kill and a willing group, I would still try this one out again.

Wrath of Dragons (3 stars) – Picked this one up at Gencon last year and have played it a couple times. It always takes some time to get the rules down at the beginning, but then the turns can go pretty quickly after that.

It’s a fun, quick game, but I’ve only ever been able to play it with two players. I think it would play much better with more people so that there is more of a reason to try and take advantage of some of the abilities in the game more frequently. I almost always find myself keeping whatever my starting token is.

Imperial Assault (5 stars) – I may be biased by my love for the franchise here, but so far every game has been a lot of fun. We elude certain death and power through to get new skills and loot.

The rebels vs. empire mechanic is interesting (we’ve been playing with three players) and I really like the branching paths that are dependent on each battle’s outcome.

Looking forward to playing through this some more and moving on to the other expansions.

TV Shows

X-Files (4 stars) – The first few episodes were a lot of fun. Interested to see what direction they will take everything this season.

Black Mirror (4 stars) – As a big fan of the Outer Limits, Twilight Zone, etc. this fills a nice void in my life for short stories that explore how technology could potentially affect our lives.

Second Chance (4 stars) – The writing feels a bit cheesy and there really isn’t any mystery, but somehow it always feels like a fun show. Not clever, but fun. I can’t place my finger on it, but I think if it wasn’t for Robert Kazinsky, this would be three, or maybe even two, stars.

Comments

What did I miss in January that I should have watched or played? Did you have a different review of any of these?

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The Goonies (and the benefits of working from home)

Today we are sitting in a nice little bar in Dublin called Bram Stokers. We have wifi, food, adult beverages, and heat (this hasn’t always been the case all the time we’ve been in Ireland).

Why just work from home when you can work anywhere in the world? And it doesn’t hurt that we can eat and drink here all day too. 🙂

IMG_4582

Last year this wouldn’t have been possible. Running orders through our e-commerce site, we couldn’t ever leave town for more than a few days before we had to return to do fulfillment.

 

 

 

 

 

 

Now, I just have to figure out how to get rid of these guys…

IMG_4276

My girlfriend seems very attached to them though, so it may be difficult. I guess we’ll keep them for now.


One of the places we’ve been on this trip was a gaming store called Gamers World off of Jervis St. We’ve stopped in a few times on this trip to check out their game selection and prices. It’s always good to see what’s popular out in the world and how stores organize their offerings.

IMG_4576IMG_4575


So what are we working on today? The Goonies!

And I couldn’t be more nervous about it.

It’s not that we’ve never run a Kickstarter before, this is something like our fifteenth. It isn’t that we haven’t made games before, this will be our fourth. It’s not even our first Kickstarter that has to run under the restrictions of licensed IP, we’ve done at least six.

So what is it about this Kickstarter that is different? I think it’s podcasts like this. But first, some context.

We went to Matt Riddle and Ben Pinchback at the end of 2015 and asked them to make a game for us with the following constraints:

  • Cooperative play
  • 1 – 4 players
  • 30 – 45 minutes
  • Thematic (it has to feel like The Goonies)
  • 108 cards
  • Easy to learn, but still some challenge for the more hardcore gaming community
  • Approachable enough for non-gamers

The perfect game for a publisher right? Something anyone can play that has replay value and can still ramp up the challenge level once you’ve mastered some of the gameplay.

The thing is, they delivered. The Goonies: Adventure Card Game is everything that I asked for. It’s fun, it’s thematic, and between the three of us, we’ve probably played it close to three hundred times. You know what? I still like playing it with people. I can’t say that about most games.

The Goonies- Adventure Card Game

I know what you’re thinking, “I really feel for you Erik, you have to make an awesome game using one of the best movies of your childhood.” But hear me out. It’s a ton of pressure.

We have this great thing and it’s all on me to make it successful or to fail.

I have to get the pricing just right: enough to cover production costs, shipping, licensing fees, etc. AND still make a profit. I have to do this on Kickstarter while still providing a reason for backers to support us now instead of waiting until it gets to Amazon or their local FLGS.

It has to have free shipping and it has to be EU-Friendly. On top of that, I’m negotiating to get us worldwide rights to sell it, because I know how many of our international friends will be disappointed if they see this great game and can’t buy it.

The Goonies- Adventure Card Game 2

We have to get everything done in time to get the files to the manufacturer to make our delivery date. We need graphics for the Kickstarter, Facebook ads, Kicktraq ads, and the rulebook needs to be completed to get out onto BGG before launch.

There are bloggers to contact and prototypes to finish so that we might get some favorable reviews to post on the project.

At the end of the day, I’m really just hoping we do right by Ben & Matt. They’ve created an amazing game and I want to make sure that we do everything we can to make sure it gets the recognition that it deserves.

So while I am anxious about the whole endeavor, I’m also very hopeful of the final outcome. There is a ton of work to do, but it’s so much easier when you know the end product is totally going to be worth it.

If you had the chance to make a game from one of your favorite properties, what would you choose?

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PAX South 2016 Wrap-up

 

PAX South booth 2PAX South booth

We had an awesome time at PAX South in San Antonio this year, thanks to everyone that came out and said hello!

Since we had demos to run, our booth space was quite a bit bigger than what we are used to.

Can’t say we minded the extra space 🙂

The Goonies: Adventure Card Game

The highlight of the weekend for us was being able to get The Goonies on the table to do some demos. It’s a great game we’ve been working on with Matt Riddle and Ben Pinchback for awhile now.

The response to the game was great and we only wish we had started it sooner so that it was already out!

IGN stopped by the booth and interviewed us about the game, so you can see that here.

Karmaka

Karmaka

I had a chance to meet Dave, one of the creators of Karmaka. We had already backed the Kickstarter, but it was great to meet the guys behind the game.

They have a well thought-out strategy, especially for a group that is relatively new to Kickstarter.

Looking forward to playing this game when it comes out.

Dreadnaught

dreadnought_full

I didn’t have a chance to play Dreadnaught this time, but it was beautiful as ever and could someday tempt me into putting together a true gaming PC.

The lines were always long and they had an awesome setup. Definitely one to keep your eye on.


 

Obviously we didn’t get a lot of time away from the booth, but it was a great show.

We’re looking forward to next year, and if you ever have a chance to attend any PAX, we highly recommend it.

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Journey to the center of the convention (PART I)

Conventions have been a huge part of our lives for years now. We’ve attended about 30 as a company.

While there are differences between cons, many of them are structured similarly. This is part one of what we’ve learned so far while exhibiting.

Travel

There are a lot of ways that you can get to a convention. If you’re fortunate, you live in a big city that has some of the larger shows (like Seattle or New York City). If not, you have two main options: drive or fly.

If you drive, chances are you’re going to be tempted to pile all of your stuff in a van, drive to the venue, and setup your booth a day or two before the show. Here’s what typically happens when you go this route:

Very few venues will let you just drive up and start unloading. There is normally a process in which you must first go to what’s called a marshaling yard. Marshaling Yard is a fancy word for ‘parking lot’.

You’ll report in, tell them your booth number, and wait until someone at the loading dock tells the marshaling yard that there is room for you. At this time you may then proceed to the loading docks at the venue.

Note: The marshaling yard and the loading docks are not always close together. They are also usually hidden by some kind of elven magic that makes them particularly difficult to find.

Once at the loading docks, there may or may not actually be room for you. If there is, it typically tends to be located at the point farthest from your booth. Hopefully you brought a large dolly or cart to load everything up to make the load in with just a few trips. Ridiculous loading times are often given, like twenty minutes, but don’t worry too much as I’ve never seen these actually enforced.

Once you’ve moved all of your stuff in, you may need to go find another place to park and come back to setup your booth.

If you fly, your process can be more like this:

  • Fly to destination city.
  • Get an uber to the venue.
  • Find your shipment which has been magically transported to your booth by Union Elves.
  • Setup your booth

Obviously one is easier. Obviously I am a glutton for punishment. I keep driving.

Setup

So what makes a good booth? That’s kind of like asking what makes a good mate, there are some basic characteristics most agree on, but it varies based on the individual.

It’s more of an art than a science. Here’s what one of our first booths looked like:

first boothDoesn’t that just make you want to run up to our booth and buy stuff? Yeah, nobody else either.

Some big points about presentation:

  • There isn’t anything that really draws your eye to the booth
  • Everything is flat on the table, which makes it much less dynamic
  • There isn’t any signage for prices
  • Not having a draped table makes it look like a lemonade stand

 

 

 

We still have a long way to go, but we’ve been building up our arsenal over the years. If we had a lot of extra cash, it would be a little easier, but instead we’ve had to put it all together one piece at a time. As of this writing, this was the last iteration of our booth:

A little better, but still missing some key elements. Here are a few things we’ve changed up to help:

  • Moar banners! We try and use as many as possible. Since we have so many licenses, somebody is bound to like at least one of them right?
  • We opened up the space a little more by staggering the glass case in the back (hard to see in this picture, but it’s lit up back there).
  • Counter displays, stacked product, and more signage so customers know what they’re looking at.
  • Those little grey things. They are your savior. Padded floor mats that will make standing for days on end much more bearable, trust me.

Winter is Coming

Okay, it seriously is now that it’s almost February in Texas. But to be prepared, there are two things you need: food and water.

Stock up on bottled water from Walmart or somewhere cheap. You don’t want to get stuck paying $3.50 – $5.00 for each water at a convention when you can’t leave your booth.

For snacks, we like things like beef jerky, trail mix, and granola bars to keep us going.

Cooties

Con crud, the plague, whatever you want to call it, it’s that illness you get during or after a convention if you aren’t careful.

The best way we’ve found to combat this?

  • Sleep as much as possible
  • Drink as much water as possible
  • Use this liberally…

PurellSeriously, we practically bathe in this stuff during a convention. Use it after shaking hands, handling products customers are touching, doing game demos, or before you eat anything. It’s like 99 cents and will last you 2-3 days. Best. Investment. Ever.

Help Wanted

Get as many people as you can to help out. Three to four days is a LONG time when you can’t leave your booth and only have one or two people.

If you have games to demo, try to find some friendly folks that are willing to help teach your games for a few hours in exchange for a free badge. If you can afford it, extra swag, hotel rooms, etc. are also good ways to find more volunteers.

Note: we can’t afford it yet. But we do have ONE extra badge for PAX South 2016 and need some help running demos. Anyone interested in helping us a few hours each day to attend a sold-out convention for free?

It also helps to have runners for food, bathroom breaks, etc. Some conventions like PAX and RTX have event staff dedicated to this, but that’s the exception not the rule.

Summary

  • Ship your stuff to the convention and fly
  • Spend some time and money on your booth setup
  • Stock up on water, snacks, and hand sanitizer
  • Recruit some help

Let us know if there is anything you want to know in the next segment. Otherwise you get stuck with whatever I feel like writing about.

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New Site – New Beginning

When I first started Albino Dragon a few years ago, I’ll admit I had no idea what I was doing or where we were headed. It was something that was fun and completely different than the corporate life I had left behind.

Kickstarter was a safety net that allowed us to try new ideas without the traditional risks associated with them. Many things have changed since then, including my vision for our future.

How do I buy things now?

Over the past year, we had really moved away from what we enjoyed most: making cool shit.

We spent way too much time packaging orders and walking them to the post office every day. That kind of thing just drains all of your creative energy, and that’s energy that we really need to create.

So we did away with the product-based, point of sale website. You can still buy our most popular items here.

You seem…different

Nope, it’s the same guys and gals making things for you. The same folks that spend nights and weekends busting their asses to make sure that things are not only done, but done well. Our interactions with our fanbase and our customers have felt so plain and proper. It’s been professional, but it was boring. We’re looking forward to being able to be a little more…us.

We look forward to sharing our opinions and invite you to join us in the creative process.

We want to geek out right there with you over all of these great things we’ve got going on, and all of the great things that we as a community have come to love.

So yeah, let’s bring on 2016 and see what we can do!

-Erik