3 ms·

I'm not well versed in the business side of things so I want to ask : Isn't fixed cost contracts considered usually a bad idea in creative-technical endeavors?

I'm not well versed in the business side of things so I want to ask : Isn't fixed cost contracts considered usually a bad idea in creative-technical endeavors? I spent about 10 years or so working in AAA games and I found that I had to work in a way that was essentially anticipating major changes. Essentially a totally different approach to programming compared to the other programming jobs I've had (robotics/finance/academic). Many games I've worked on, the shipped product is completely different from the initial prototype that was sold. My understanding was generally you get into a contract with a publisher and have a payment schedule every N months. At each checkpoint the publisher can assess whether they want to continue with the contract or let it go. I can't imagine this kind of project ever working with a fixed-cost contract. Extreme change is the norm when you have creatives at the helm of the project.

LapsangGuzzler 3y ago
> Isn't fixed cost contracts considered usually a bad idea in creative-technical endeavors? Yes, but Marvel is one of the largest (if not the largest) buyers of VFX work in Hollywood and is known for keeping a list of studios they will and won’t work with, which gives them favorable terms with the VFX houses.
rperez333 3y ago
Scott Ross, founder and former CEO of Digital Domain, spoke for years about this. The issue is there are just a handful of film studios capable of keeping a large VFX facility busy, so they have a lot of leverage when negotiating contracts and setting prices. Because that part of the film process can run offshore, VFX studios find themselves fighting for these contracts and/or accepting unadvantegeous terms. I remember him saying that film studios can strong arm a VFX facility to open in a place under heavy tax breaks, and they are expected to 'forward' the cost savings. https://vimeo.com/66487005 https://vimeo.com/66487005
- ClimaxGravely 3y ago
  Thanks for the info. That sounds like quite a rough situation. I guess games aren't really an analog despite being one of those creative/technical industries.
P_I_Staker 3y ago
I don't think it's a problem if the requirements are clear, the artist knows how much a work like it takes, and it's understood that it will be delivered as is; there might be some room for input from the customer, and some rework negotiated in, but you're not putting in unexpected new work. The scope doesn't change. When a product has been completed, with all negotiated re-work, the final bill is due, or you pay for more work. Intellectual property transfers after final payment. It doesn't have to be this hard.

LapsangGuzzler 3y ago

> Isn't fixed cost contracts considered usually a bad idea in creative-technical endeavors? Yes, but Marvel is one of the largest (if not the largest) buyers of VFX work in Hollywood and is known for keeping a list of studios they will and won’t work with, which gives them favorable terms with the VFX houses.

rperez333 3y ago

Scott Ross, founder and former CEO of Digital Domain, spoke for years about this. The issue is there are just a handful of film studios capable of keeping a large VFX facility busy, so they have a lot of leverage when negotiating contracts and setting prices. Because that part of the film process can run offshore, VFX studios find themselves fighting for these contracts and/or accepting unadvantegeous terms. I remember him saying that film studios can strong arm a VFX facility to open in a place under heavy tax breaks, and they are expected to 'forward' the cost savings. https://vimeo.com/66487005 https://vimeo.com/66487005

ClimaxGravely 3y ago
Thanks for the info. That sounds like quite a rough situation. I guess games aren't really an analog despite being one of those creative/technical industries.

P_I_Staker 3y ago

I don't think it's a problem if the requirements are clear, the artist knows how much a work like it takes, and it's understood that it will be delivered as is; there might be some room for input from the customer, and some rework negotiated in, but you're not putting in unexpected new work. The scope doesn't change. When a product has been completed, with all negotiated re-work, the final bill is due, or you pay for more work. Intellectual property transfers after final payment. It doesn't have to be this hard.