The Business of Game Development - Contracts, Legal, and Finance

Making a game means more than writing code and drawing art. You have to agree who does what, who owns what, and how money flows. This post covers the business side: contracts, legal basics, and finance so you can protect your work, stay compliant, and keep your project and cash flow on track.

Why Contracts, Legal, and Finance Matter

Without clear agreements, you risk disputes over ownership, payment, or scope. Without a basic legal setup, you may face tax or liability surprises. Without tracking money, you can run out of cash or miss tax deadlines. Spending a little time on contracts, structure, and finance early reduces stress and cost later.

Contracts - What to Put in Writing

With publishers or partners

Scope – What they deliver (e.g. funding, marketing, porting) and what you deliver (e.g. build, IP license).
Revenue share – How sales or other revenue is split, when payments are made, and how they are calculated.
IP and ownership – Who owns the game, the brand, and any source code or assets. Typical for indies: you keep IP; publisher gets a license to publish and promote.
Term and exit – How long the deal runs, what happens if either side wants out, and what rights revert to you.

With contractors or freelancers

Work for hire or license – Either they assign all rights to you (work for hire) or they grant you a license to use their work in your game. Spell out which and for what deliverables.
Payment – Fixed fee, milestone-based, or hourly; when invoices are due and when you pay.
Scope and revisions – What is included, how many rounds of revisions, and what costs extra.
Confidentiality and credit – What they can show in their portfolio and how they are credited.

Pro Tip: Use simple, written agreements even with friends. A one- or two-page contract is better than a handshake when money or IP is involved.

Common mistake: Signing a publisher deal without understanding what happens to your IP if the game underperforms or the deal ends. Read the reversion and termination clauses.

Legal Basics - Structure and Compliance

Business structure

Sole proprietor – You and the business are the same. Simple, but you are personally liable and may pay more tax as income grows.
LLC or equivalent – Separates your personal assets from business liability and can simplify tax in some regions. Common for indies who earn revenue or hire contractors.
Corporation – More formal; useful if you take investment or have multiple owners. Often overkill for a first solo project.

Choose based on your region, revenue, and risk. When in doubt, a quick consultation with a local accountant or small-business lawyer helps.

Intellectual property

Copyright – You automatically own copyright in original code, art, music, and design you create. Registering (e.g. in the US) strengthens enforcement.
Trademarks – If you have a game name or logo you care about, consider registering it so others cannot use it in a confusing way.
Licenses – When you use assets, engines, or middleware, you are bound by their licenses (e.g. Unity EULA, asset store terms). Check commercial use and royalty obligations.

Compliance

Age ratings – If you target console or certain stores, you will need a rating (e.g. ESRB, PEGI). Plan for questionnaire or submission.
Privacy – If you collect player data (accounts, analytics), you need a privacy policy and may need to comply with GDPR, CCPA, or similar. Many stores require a policy before launch.
Tax – Report income and, where applicable, collect and remit sales tax or VAT. Keeping simple records from day one makes this easier.

Pro Tip: Keep a folder with contracts, incorporation docs, and key licenses. When you need to check something or hand off to an accountant or lawyer, it is all in one place.

Common mistake: Ignoring store and engine terms. Breaching a EULA or asset license can get your game removed or your account suspended.

Finance - Tracking Money and Planning Ahead

Revenue and expenses

Revenue – Sales (Steam, Itch, console, mobile), subscriptions, DLC, and any other income. Track by platform and month so you know what is working.
Expenses – Tools, assets, contractors, marketing, store fees, legal, and accounting. Categorize so you can see where money goes and plan taxes.

A simple spreadsheet or bookkeeping tool is enough for many indies. The goal is to know how much came in, how much went out, and what you owe in tax.

Cash flow

Payments from stores often lag by 30–60 days or more. Plan for that gap so you can cover expenses and pay contractors on time.
If you hire freelancers, align their payment terms with when you receive revenue (e.g. pay on receipt of store payout).

Tax and accounting

Set aside a portion of revenue for tax (e.g. 20–30% as a starting buffer; actual rate depends on your jurisdiction and structure).
Consider an accountant for annual filing and for advice on deductions, VAT, or structuring. One session per year can save money and stress.

Pro Tip: Revisit your numbers every few months. If revenue is below plan, cut scope or extend the timeline before burning through savings.

Common mistake: Treating all store revenue as profit. After platform cut, refunds, chargebacks, and tax, net is lower. Plan and budget on net, not gross.

Putting It Together

Contracts – Get written agreements with publishers, partners, and contractors. Clarify scope, payment, IP, and exit.
Legal – Choose a business structure, protect IP where it matters, and stay compliant with ratings, privacy, and tax.
Finance – Track revenue and expenses, plan for payment delays, set aside tax, and review cash flow regularly.

For more detail on contracts and legal for game dev, see our Business Side of Game Development - Contracts and Legal. For budgeting and resource planning, see our course on launching your first indie game and guides on game development business.

If this was useful, share it with other devs who are stepping into the business side of game development for the first time.