German game designers association calls out “questionable practice” from publishers over royalty payments

Board game publishers in Germany are short-changing designers when it comes to paying out royalties by using opaque payment structures, the country’s tabletop game designers association SAZ has said.

SAZ claims that although the standard practice is to provide designers royalties based on the net selling price to retailers, that amount is often reduced by extra unspecified items, making the process a “black box” for designers.

It said additional deductions have included rebates, discounts, advertising costs subsidies, retailer bonuses, export taxes, del credere insurances, commissions, transport and packaging costs, as well as other non-transparent extras labelled simply as “and similar costs”.

SAZ said it makes a huge difference to designers whether they are getting “a share of the
whole cake or just a share of a slice”, and said contracts should instead be structured to echo the German book sales market, using the publisher’s retail price list as the basis for calculating the license fees.

It said, “This solution would be fair and technically uncomplicated to implement. In the interests of the game authors we represent, we therefore consider it important and necessary to initiate this discussion in the interests of fair and appropriate remuneration.”

SAZ’s stance was applauded by veteran board game industry designer Geoff Engelstein, who recently co-founded the Tabletop Game Designers Association to represent board game creators in North America.

He said, “This is definitely the type of thing that we plan to push for, in several ways. First, the royalty statements that most publishers issue to designers are quite opaque, and it is hard to determine the channel for sales. We would like to push for a standard format, or at least standard information, for royalty statements.

“Further, we believe that a fixed royalty per game, regardless of how it is sold, would be in the best interests of both the publisher and designer, as it leads to more predictability, and is easier to track and audit.

“We are also aware of some publishers that are prepaying the royalties to the designer for an entire print run, which is simple and transparent.”

Engelstein added, however, that his experience of both the book publishing and tabletop games industry suggested that some of the issues raised by SAZ are potentially specific to the German market.

He said, “Putting my personal hat on, I have worked with many book publishers, and none of my contracts have reflected what SAZ says about books – that royalties are based on the retail price.

“All of my book deals are very similar to game deals, with royalties being a percentage of the actual revenue that is brought in to the publisher, which can vary greatly based on the sales channel.

“Also, I have not seen any game publishing contracts that deduct for many of the things SAZ notes. I’ve never seen that called out in a contract that I’m aware of. I’ve always counseled people not to accept those types of deductions if they are proposed – it makes things very murky.

“So perhaps some of these elements – book royalties being percentage of retail, and misc deductions for advertising et al – are specific to the German market. I haven’t seen either of those with US publishers.

“But in general I think that going to a fixed royalty amount per copy, rather than a percentage of sales, would be a strong step forward that would benefit both designers and publishers.”

BoardGameWire reached out to several German board game publishers about the SAZ claims, but did not receive responses from any of them.