When a developer receives funding from a publisher, the total amount is rarely paid upfront. Instead, most publishing agreements contain milestones which have to be achieved by the developer to unlock parts of the promised funding.
Understanding how Milestone Schedules work (and how to negotiate them) is crucial.
What is the Milestone Schedule?
The Milestone Schedule is the list of achievements that a developer has to achieve in the development of the video game to unlock and receive instalments of the funding which has been promised by a video game publisher.
Why the Milestone Schedule matters
For publishers, a Milestone Schedule is a way to mitigate risk. Instead of paying the funding upfront, it is paid in instalments and is tied to the progress and quality of the video game in development.
For developers, the Milestone Schedule can create pressure and become a risk. In the event the developer is unable to properly achieve the milestones, the developer will not receive the next installment of the funding, which potentially jeopardizes the development.
Example of a Milestone Schedule
Below is an example of a milestones schedule in a video game publishing agreement:
| Milestone | Description | Due Date |
| Prototype | A build encompassing basic functionality for the major planned features as a proof of concept and very early look at the feasibility of the tech/features/visuals being built. | 7/30/2022 |
| First Playable / Gameplay Validation | Builds can be created which are able to prove out a first look at the basic core gameplay loop. | 8/30/2022 |
| Interim Milestone | Iterative build update, with feedback from previous milestone addressed. | 10/30/2022 |
| Vertical Slice | Features and content in one level of the game are generally functioning together with representative art. | 1/30/2023 |
| Vertical Chunk / Final Spec (mid-project review) | Features are largely functional and no longer require debug to use, save for a few exceptions. All major features are proven out and can be reviewed in concert with one another | 4/30/2023 |
| Feature Complete/Feature Lock (Alpha) | All features are proven and fully functional (bugs notwithstanding). The build is ready for full feature testing through QA. | 7/30/2023 |
| Content Lock (Beta) | The game’s content is now in the build and the game can be played from beginning to end without major blockers or crashes. | 10/30/2023 |
| Beta | The Game has all content integrated at shippable quality and all features are fully playable. | 1/30/2024 |
| Release Candidate 1 | The game has reached a finalized state where no further submission blockers remain and a release candidate has been designated by QA. | 3/30/2024 |
| First Party Certification / Approval & RTM | The game has passed first party submission and no further blockers remain for public release. | 6/30/2024 |
| Game Release | Day0/Day1 patches are certified and the game is publicly released. | 9/30/2024 |
| Final Build Archive / Post-launch Support | The released build and any applicable Day 0/Day 1 patches are archived and sent through the copyright process. | 12/30/2024 |
How to review and negotiate the Milestone Schedule
The key is to ensure milestones are structured in a way that protects the publisher’s interests while giving the developer enough clarity and stability to keep development moving forward.
Define clear and objective criteria for milestone acceptance
Many video game publishing agreements lack clear criteria for assessing milestones. This can leave developers vulnerable if publishers reject milestones for vague or subjective reasons which were not clear to the developer when developing the build which is submitted for approval.
At the same time, it is also important for a publisher to have the possibility to be able to communicate that the overall level of quality is insufficient.
One of the most important aspects of negotiating publishing deals is to find a fair balance between both interests.
Provide remedies for rejected milestones
In most publishing agreements, the developer will get another opportunity to deliver a milestone candidate which incorporates the feedback of the publisher. This has to be done within the term that has been included in the contract or within a term that will be mutually agreed between the developer and publisher on a case-by-case basis.
After the developer has submitted a new milestone candidate, this milestone candidate will often be re-assessed by the publisher. This procedure will be repeated until the milestone is accepted by the publisher.
In some publishing agreements, the publisher has the right to terminate the contract in case the developer has failed to deliver an acceptable milestone candidate a certain number of times.
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Ensure protections if the publisher does not respond on time
In most publishing agreements, the publisher is bound to a term to respond to a delivered milestone. However, in some agreements there is no consequence included in case the publisher does not respond in time. We have even seen agreements where, in case a publisher did not respond in a timely manner, this is deemed to be an automatic rejection of the milestone. Depending on the provisions of the contract, this can have severe consequences for a developer.
From the perspective of a publisher, it remains important that a publisher has sufficient time to assess a milestone. At the same time, the situation where a publisher does not respond has to be prevented. Because if a publisher does not respond, a developer will not receive the next installment of the funding. This could lead to a scenario where the developer does not have sufficient funding to continue developing the game, which leads to a downward spiral in the collaboration, because the next milestones cannot be delivered on time.
The best way to solve this problem is to include in the contract that in case a publisher does not respond in time, the milestone is deemed to be accepted for the payment of the funding only. This means that the publisher still has the opportunity to provide feedback to the milestone candidate, which feedback has to be taken into account when delivering the next milestone.
In this case you have a proper balance between the interest of the developer to receive their payments, and the interest of a publisher to be able to assess the quality of the game and to provide feedback.
Before you sign: summary and next steps
Milestone schedules are essential for managing funding, but they can also be a major point of friction if not drafted carefully. For developers, the key is to insist on clear acceptance criteria, remedies for rejections, and safeguards against publisher delays. With these protections in place, milestones can function as a fair mechanism to structure funding rather than a source of instability.