Vendor negotiation

Anyone have any experience with negotiating with engine/middleware vendors? I find myself in a position where I am the person that has to make these decisions. I would rather give them as little of my hard earned budget as possible.

Will most of the larger ones (Emergent, etc) negotiate with you on terms? And are the publisher contacts some of them offer worth anything?

 

Yes they will negotiate. Especially if cash is on the table. Recently I negotiated about quarter million off one of the top engine licenses. You have to be willing to completely walk away from the table and go with their major competitor. We had to completely walk away from the table before they agreed to cut the price, which we still felt was too high, given the reputation issues they had, so we refused.

Put up the good fight. They are all competing for your money now...so make them compete or you will see your meager budget devoured while they dive into piles of gold like scrooge mcduck.

 

Speaking from the other side of the table... most game developers who buy middleware make the mistake of negotiating price first and foremost. This is short-sighted and will end up buying you low-quality stuff that doesn't do exactly what you need. Most middleware vendors can find sneaky ways to give product away and wring more money from you in later add-ons than you would have paid up front.

In general, if a customer of mine is fixated on getting the lowest possible price for a bit of tech, then it's almost guaranteed that the game they're working on is going to suck, and it doesn't benefit my company in the long run to be involved with such a game. In these cases, I personally prefer to not bother negotiating price with the developer... let them go haggle with a competitor of mine.

Everybody looooves them a discount. But if the negotiation stops becoming "How can we make the best game together" and starts becoming "How can I give you the least money possible" then I walk away. Caveat emptor.

Best way to negotiate with a middleware vendor is to have alternatives to a negotiated agreement. Every vendor has different feature sets and different support plans. Know what you're paying for. In general, select for a vendor that comes closest to the development style of your studio first, and figure price/IP issues separately.

Hire a middleware vendor the same way you hire an employee.

 

Oh, and test test test that software before committing any funds. Commit some programmer time to do a test integration of the middleware's eval SDK into your pipeline.

You don't want to be stuck near the end of your cycle with something that you spent a ton of time on, only to find it won't seem to work with one of your other core systems.

 

I think part of the problem is that it's easy to say "Hey I saved us X amount of money by my shrewd negotiation" and it looks good on a review if nobody digs in too much.

However, stuff like good support terms, allowing contractor access, being able to float licenses, discounts at certain thresholds, etc all have a lot of value. If overlooked, they can easily eat through any discounts and provide lots of paper pushing admin work for someone down the road.

 

I have just finished work on some major vendor negotiations and I think there is a golden rule. Make sure you have written down exactly what is you want the software to do. I know this sounds simple, but you need to have a checklist of what are the critical items and then what are the nice to haves. Then visit each vendor and see how many of those items get ticked.

Secondly you need to do a check on the company itself. When you get into negotiations you need to know about the financial security of the company and its immediate plans. i.e. is it about to be bought out by someone else.

You will need to make sure you get prority support. A guaranteed level of service usually via a SLA (Service Level Agreement).

You will need to look at compatability issues and how frequently the software is updated. Are the updates free as part of the contract or is it paid for on an adhoc basis.

If it doesn't do exactly what it is supposed to, is there scope for addons from the company. (This usually comes at a premium) however an off the shelf solution is exactly that. It will never do everything, but it needs to do enough.

This means you also need to manage your own companies expectations. Tell them it isn't a silver bullet but make sure you have built a good business case.

Also training. How much of it will you get, how much do you have to pay for future training.

Also ask for referals. Speak to other people to find out their experiences.

I hope you don't think I am teaching you to suck eggs, but believe me I have just spent a year on different contracts and it is virtually always the simple stuff that gets missed.