I see so many forum posts looking for artists, or programmers to collaborate on a game project with no pay, but a promise of a percentage of the royalty once the project is published.

I was just wondering does anyone know of a case where one of these projects was successful - I mean where it actually made money and every one got rich?

The groups that appear on forums with no experience at all, overly vague yet massive ideas, usually no talent, no idea of the legal/business side of things... that's a complete mess that I'd advise people to steer clear of.

As for successes, there's a studio in the same building as me, League of Geeks, who have built their game using a well defined profit-sharing system. The core of their team are actual development veterans coming from other studios, they've sat down ahead of time and worked out all the legals of doing a profit sharing system, and then they've planned out all the work involved and assigned 'points' to different tasks. IIRC, when they're finished, they'll add up all the points, and then everyone gets a slice of the profits depending on how many points they've earned.
They're only in early access now, but they're looking on track to actually finish their game. At that point, I think they're planning to release their "point system" for other devs to copy if they like.

The groups that appear on forums with no experience at all, overly vague yet massive ideas, usually no talent, no idea of the legal/business side of things... that's a complete mess that I'd advise people to steer clear of.

As for successes, there's a studio in the same building as me, League of Geeks, who have built their game using a well defined profit-sharing system. The core of their team are actual development veterans coming from other studios, they've sat down ahead of time and worked out all the legals of doing a profit sharing system, and then they've planned out all the work involved and assigned 'points' to different tasks. IIRC, when they're finished, they'll add up all the points, and then everyone gets a slice of the profits depending on how many points they've earned.

They're only in early access now, but they're looking on track to actually finish their game. At that point, I think they're planning to release their "point system" for other devs to copy if they like.

Wow, that's quite an amazing game for an Indie studio

Wow, that's quite an amazing game for an Indie studio

There's a big difference between "indies" (independent games studios), and "indies" (groups of random people on the internet)

If there's an IGDA meetup in your area, go and see if you can meet these kinds of actual developers.

I'm lucky enough to share an office with something like 20 other indie companies, plus there's a hugely active IGDA group in my city (hundreds of people)... so in my immediate network I've met indies working on an MMO exploration game, a whole catalogue of choose your own adventure books, an arcade weapons racer, a car/tycoon simulator, a speed-run 3D platformer, a space trading MMO, amazingly successful mobile games, successful lone wolves, Syndicate-esque top-down tactics, a "minecraft-clone" shooter, co-developers of a dinosaur FPS, a quake-style arena FPS, and surely more I've forgotten to remember

Many of them are fairly recent start-ups with fairly small teams, which means there's a high likelyhood that the core team members on many of these kinds of projects are receiving shares in the company rather than actual money to begin with.

Thanks for the advice, Hodgman!

Yeah, I get the feeling that most of the successful collaboration projects were ones where the people involved already knew each other.

There's a big difference between "indies" (independent games studios), and "indies" (groups of random people on the internet)

This is the key that I've seen as well.

There is an enormous number of people --- including many of those in our forums, in Your Announcements and the Hobbyist Classifieds --- who have zero real chance of ownership having value. The most obvious key is that they are not legal entities with shares to give away. Just people who have a project created in a single afternoon followed up with an email that says "We'll split up the money and all be rich!"

There are a much smaller number of people who are attempting to build the first type of organization. They have business plans. They organize as a corporation. They get written contracts with people who want to contribute. The business plans include multiple projects, and each project has codified plans that include market research and plans that lead to profitability.

That group starting a business tend to be experienced individuals, often in their 30's or 40's, who will tend to invest quite a lot of their own money. Sometimes it is all their spare income from a day job, but also sometimes potentially including getting a mortgage or second mortgage on their home (one person or multiple people) to fund the business. This group will give up ownership shares, but only for those willing to make large investments or to provide critical work when there is no other means of payment available. Giving away ownership shares for this group is a decision made after much thought, and usually made reluctantly.

I've known and worked with a few who have done that. One I know retired about a decade ago after building a studio funded by getting three mortgages on his home (!!!), growing it to over a hundred people, and eventually selling it. Another I know started as a college professor, branched out with his ideas, and now employs about 150 people. Several I know started at igda meetings and such and had a few successful products, sometimes a small number of products, but never could build it into a self-sustaining business. One of my friends (his birthday today, in fact) had his startup bring in around a few hundred thousand dollars before it collapsed. Enough to support him for a few years, but never really transformed into a sustainable company.

That also describes most of the successful startups and small studios. These started as a handful of individuals or even an individual person, and through hard work, intelligent business decisions, and a lot of luck, grew into successful small studios, hiring one, two, then three, eventually five or ten people.

Through a magical transformation one day they suddenly transition from being considered a nobody hobby/"indie" group into being a real professional studio.

Yeah, I get the feeling that most of the successful collaboration projects were ones where the people involved already knew each other.

It seems the common thread is that the people, whether they know each other or not, are already experienced and professional in attitude and skill.

Merely knowing each other can complicate the already-complicated development process. There are dozens of threads on this forum about partnerships and agreements between friends and strangers that went sour. In my in-experienced opinion, someone needs to own and control the project, with the others being contributors, employees, or contractors.

I discuss my dislike of percentage-based payments in an unrelated thread:

[Promising percentages of revenue as payments] is one idea, and one I've considered, but it's not my preferred choice. It complicates things. In 10 years from now, if a single copy of one of my old games is sold, I still have to remember to give 10% to the composer, 5% to the writer, 15% to the two artists.

I could offer the first Y% of sales only for a specific time-frame (The first two launch weeks of sales, the first year of sales, etc...), that way it's not an indefinite budget complication but a short-term one.
Alternatively, I could offer the first X amount of profit earned goes to the composer, before I see any profit myself - and that seems reasonable to me, and appeals alot more.

But as the game developer, ideally it should be me taking the risk of the game, not the contractors. I shouldn't pay people with promises, but pay them out of pocket or not hire them at all - especially in an unpredictable market (indie game sales). If I don't have the money, I shouldn't buy the goods; if I need the goods and don't have the money, then I have to make due with the budget goods I can afford.

It's nice to partner up and work on games for fun! But we can't treat the business side of game development the same as we treat for-fun hobbyist projects, or we tend to get rather cavalier about it. When money gets involved, people (friends/family/strangers) behave differently.

When money is involved, then it becomes a business and the business side of things need to be treated more cautiously.