One of the requirements to create a successful video game is having a great team. Before deciding to provide funding, a publisher will carefully assess whether the development studio has the capability to deliver the promised game. Naturally, the publisher wants to make sure that the key members of the team remain dedicated and available throughout development. This is where the Key Personnel clause comes in.
What is a Key Personnel clause?
The Key Personnel clause in a video game publishing agreement puts an obligation on the development studio to have certain team members work (full time) on the game.
The clause may also contain additional provisions, such as:
- What happens if a team member resigns;
- Which criteria are applicable for replacements.
What is the importance of a key personnel clause?
A video game publishing agreement is signed between a publisher and a development studio. The team members are not a party to the contract. However, the publisher’s funding decision is partially dependent on the team that is developing the game.
Because of this, publishers want assurances that the identified team members will actually work (exclusively and full-time) on the game during development.Example of a Key Personnel clause in a video game publishing agreement
Example of a Key Personnel clause in a video game publishing agreement
“Developer agrees to:
- employ a development team according to the Key Personnel and Staffing Plan attached as Exhibit X;
- ensure that each of the Key Personnel will work full-time and exclusively on the Game until its completion;
- use its best efforts to retain the Key Personnel;
- seek Publisher’s prior written consent before reassigning any of the Key Personnel to another project:
- promptly give Publisher written notice if any of the Key Personnel contracts are terminated or if any Key Personnel end their employment with Developer;
- replace such Key Personnel with an individual of equal or greater skill as determined in good faith by Publisher (failure of which will be a cause for termination of this Agreement); and
- notify Publisher of any proposed Key Personnel replacement (Publisher, in its sole discretion, may approve or reject of any proposed replacement).”
How to review and negotiate a Key Personnel clause
Before diving into specific points, it helps to look at the overall balance. The goal is to give the publisher confidence in the team, while giving the studio enough flexibility to keep development moving if circumstances change. The three topics below are where most of the negotiation happens.
Define duration by project phase
One aspect to take into account is how long the obligation lasts per team member. This is particularly important if the full-time commitment of a specific team member is required. Not all rolles are needed at the same intensity for the entire project.
For a developer, it is important that team members are allowed to prepare to develop a potential new title when their contribution to the game is decreasing. For example, the need for concept art might decrease in a later stage of development, which means that the concept artist has sufficient time to work on a new title. This is important to make the gap between releasing the first game and pitching for the second game as small as possible.
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Plan for resignations beyond the studio’s control
Ultimately, it is not possible for a development studio to keep hold of team members if they choose to resign. Because of this, it is important to implement a clear arrangement on how to deal with a team member resigning. After all, you don’t want to cause a breach of contract because of something the development studio cannot change. An example of a solution would be to arrange a term during which a team member can be replaced.
Set approval criteria for replacements
Be cautious with provisions that give the publisher the right to approve replacements. While publishers may want this control, it can cause delays if they reject candidates.
Instead, it is more beneficial to agree on certain criteria for replacements, such as the replacement being equally skilled or having an equal amount of experience and qualities as the previous team member. Although subjective, this standard reduces the risk of not meeting milestone obligations because of a replacement being rejected by the publisher.
Before you sign: summary and next steps
A Key Personnel clause should give the publisher confidence without freezing your studio.