a contract is an agreement between two or more people or groups/parties. one party agrees to do something in return for a benefit from the other party . if one party outright breaks one of the agreements in a contract then this party can be taken to a court of law and sued. a contract must be looked at by a lawyer on both sides to see if all terms are not breaking any laws. parties will often Hire agents who have an understanding of the industry to settle terms between each other.
contracts are used in many industries, the video game industry being one of them. 3rd party game developers will often sign a contract with a publisher containing information about where the profits will be directed and how the profits will be shared as well as information on IP and asset ownership. this contract usually benefits the publisher more due to the majority of profits going to them but it also (if the game is successful) increases the reputation of the development team meaning they might get more publishers in the future or even become a 1st party to a publisher meaning definite work and more money. a developer may also use a contract to protect a IP because they believe in it and believe it will be profitable in the future.
A Non-Disclosure Agreement (often abbreviated to NDA) is a contract signed by a party which stops the party from given away shared confidential information or code to them to another party or to the public. If the information is not kept confidential, the damages will have to be paid in a court party. this is put forth to help protect the unique code and engines that the company’s programmers have created. if the information got out it would not just allow people to hack their games, but also would allow the companies rivals copy their game codes or even improve upon them.
examples of contract incidents of the past would be the “Team bondi vs Rockstar” controversy. Team bondi, according to old members, worked there employees to the bone, forcing them to work 12-hours a day. the way team bondi kept its workers from leaving was that they wouldn’t be credited at the end of the game if they decide to leave the company before hand (as legalised and agreed in the contract). By the time the game was made 100 people left or made redundant (possibly due to the work times being too much). Rockstar was ultimately disgusted by this and refused to work with them again. Not long after Team Bondi was liquidated in 2011
I believe contracts are important in any industry for it keeps a company safe from espionage and helps keep the world of business in order. Contacts can create bonds between companies and help create friendships between game developers and publishers. It helps keep game develops safe from over abusement from publishers contracts we used in ancient history and will be used for years to come.