Ever since I started in this industry (about 10 years ago) there has been talks about both the demise and rise of the publishers. It seems that when a new platform comes around developers tend to see it as a solution to a problem of independence. Or even more specifically, a way to self publish. During my time as a game developer those revolutions have been the digital channels for consoles (Xbox Live Arcade, etc), Social networks (Facebook mainly), the smartphone/tablet Appstores and now the talk is all about VR/AR.
Whenever a new platform comes around there is generally a window of opportunity for smaller developers to reach an audience without the need for publishers. It works well for a while, but as the competition stiffens and the amount of content grows, the sales decline. And, yet again, the publishers tend to move in and establish themselves as sort of gatekeepers. With access to capital, marketing channels and good relations with the platform holders, they have the business tools that a developer often lacks. But, should a developer have proper funding and a long term business perspective, there is no reason a developer couldn't manage to gain all those tools themselves. Trying to get signed with a publisher isn't much more different from getting an investment from a venture capitalist. So, let's compare the two and consider the pros and cons.
What do you give up?
More often than not, you have to give up your IP, and if not that, at least a rights of first refusal to publish any sequels or derivative works. You also have to consider working in a way that might not suit you, but rather the publisher, as most publishers pay on a milestone basis. Meaning that for a certain chunk of work done, they pay you a chunk of money. You will also share the revenue of the game with the publisher and those terms will vary greatly. Getting a 70/30 split (with 70% going to the developer) is quite good, but then again, it comes down to a lot more details such as if the publisher can deduct costs prior to sharing the revenue, etc.
What do you get?
You should be getting funds to develop your game. Feedback and support during the development process. Marketing budget and strategy executed by the publisher, often along with yourself and your team. Furthermore, the publisher should have access to gatekeepers at whatever platform you are targeting, to make sure you have potential for being featured.
I have heard about a few developers who had great relationship with their publishers. I've heard way more often about developers who disliked their publisher. This is most likely not because the publishers always suck, it more likely has to do with different expectations. In my experience you often end up in a weird "work for hire" kind of relationship where the publishers only leverage towards the developer is the payments of milestones. As deadlines slip, the developers goal changes over time, from creating the best possible game to just staying in business. The publishers goal is to release a great game on time for a low budget. But as time progresses, if the development is on track, the power balance skews from the publisher over to the developer. The developer sits on the code, art and know how to finish the project. The Publisher might refuse to pay a milestone, but will then not get to release a finished game.
Developer vs. Publisher balance of power
What do you give up?
You give up equity. An investor will get some of your company shares. Many investors will want to have a seat on your board and the opportunity to influence your business decisions, or at least stay closely informed.
What do you get?
Cash in the bank. Freedom to make your own decisions (mostly). The ability to build something from the ground up. What it really gives you is time. Hopefully enough time to go to market, make some mistakes, adapt, improve and overcome. An investor often invests as much in you as your company
When I sold my game studio some years ago the buying company had several investors. I went from presenting monthly revenue and financial situation to my buddies over lunch, to travelling to London and reporting to a board of venture capitalists from various funds. A bit of a difference. While the access to the funding was great, it was really problematic that the investors didn't get the games industry. They had little understanding of development cycles, iterative/agile process and why the hell we weren't making millions of dollars yet.
As for Lavapotion, we have an amazing investor. The fine folk at Coffee Stain Studios understand exactly what we are working on. They attend our sprint reviews, give great feedback and advice, but never interfere with what we do. It is a relationship built on mutual respect. The funds give us the security to take long term decisions and always keep whats best for the game in mind. With that said, we are still open to work with a publisher, should we be able to find a great win/win-scenario.
To sum it up
In the end, it all comes down to how you want to work. Remember, many publishers started out as developers. What ever they learnt, you can learn too. But it takes time and effort. If you aren't interested in business development and marketing then a publisher is obviously a relevant option for you.
Whatever you do: Only sign contracts with people you could see yourself working with for a long period of time. Trust your gut feeling and consider how the other partner would react in stressful situation, because they will inevitably appear down the line.
And finally, here are some publishers that in my opinion really care about the process and developers:
Coffe Stain Publishing - Coffe Stain have created quite a few hit games themselves and are now taking on publishing with some very interesting titles signed. Lovely people to work with.
Raw Fury - Run by a savvy team with industry veterans. Offers very reaonable deal terms to the developers and really care about each project.
And, some investors who really gets game development:
London Venture partners - I've met these guys at lots of dev conferenses, they have been around for a long while and they get game development.
Indie fund - While I've only met a few of the people behind the fund, they have a transparent and very relevant business model, which I greatly appreciate.
Nordisk Film Games - Last, but certainly not least, these guys know game development, they know how to spot good teams and has already made some interesting investments. As a disclaimer I should mention that I have worked for them, helping them with analyzing potential investments.
And finally - Feel free to reach out if you want some friendly advice :)