Everything you wanted to know about your revenues, payment terms and how you can get your money sooner.
Do you find yourself craving payday? It’s often the same feeling for a studio waiting for their own revenues to hit the bank. The more we talk to game studios, the more we feel the pain point of payment terms from the digital stores.
You name it, from Apple to Google, Facebook or Playstation to Steam – they are amazing platforms but when you generate revenues you have to wait a long time to get paid. We wanted to lift the lid on what the exact payment terms are by store, why that poses cash flow challenges, and what you can do to mitigate these problems.
To start with, it’s worth outlining the concept of payment terms and why it will impact you and your studio. Put simply, when you publish your game on a platform the revenues you generate go through the store to the platform in the first instance. This money is held and paid out periodically to you but it cant be accessed as and when you want. These stores have specific processes, terms and payment timetables. This in’t a surprise but it means you will have to wait a while for your money.
It is worth saying that almost any business in the world has to wait for their revenues to hit their bank account whether you’re a strawberry jam supplier to Sainsbury’s, a tyre supplier to BMW or a memory chip supplier to Apple. There are many reasons why sellers or suppliers have to wait to get paid. Those could be a) it is better for the counterparty’s own cash flow b) their accounting and finance systems just work that way or c) they’ve always done it like that and can get away with it.
On the flip side, Apple, Google, Playstation etc undoubtedly give game studios an incredible platform to distribute their game on and so that’s just something as a studio which is a cost of doing business. Or is it? I’ll come to this later (because we have a solution) but it’s worth knowing the rough payment terms by platform:
|Store||Days to Pay||Payout Date|
|Admob||25-50 days||21st of the month|
|Apple||45-60 days||Paid 1st-3rd of new month|
|30-60 days||22nd-26th of the month|
|25-50 days||20th/21st of the month|
|Microsoft||45 days||45 days after GO LIVE & then monthly|
|Oculus||30-60 days||Paid 1st-3rd of new month|
|PlayStation||2-4 months||20th of the month|
|Steam||31-60days||30th of the month|
|Unity||2-4 months||20th of the month|
(Each platform pays out monthly, so the earlier you generate revenues in the month, the longer you have to wait)
This all matters because once you have a live game, if the metrics are working then you absolutely need to move fast to capitalise on the strong momentum. If you could get access to your money now instead of leaving it at the stores you would be far better off. We estimate that by recycling your revenues back in to UA and marketing then your revenues would be almost 50% higher per month. Isn’t that worth looking in to?
Yes we’re shamelessly plugging our own platform here but we give you immediate access to your money for one simple fee and then you can do what you want with it. Hire that extra programmer, spend on that influencer campaign or get those extra creatives done. The way we do this is with SugarFlow (our receivable finance product) and it takes only 1 day to set up. Drop us a line to find out how it works.
To summarise, the digital stores have their ways of doing things and if you wait then you will have to fit in with their payment terms. But there are ways to unlock your revenues early and it could help you scale up faster than you thought possible.