For other films, marketing and distribution costs account for a large portion of the budget, which also affects the final income for the production company.
Some film producers and distributors like to sign performance-based agreements. For example, the producer might authorize the distributor with guaranteed distribution rights for a film at a price based on 1 billion yuan in total box office, allowing the producer to directly secure over 300 million yuan in guaranteed income.
The benefit of doing this is that the producer takes on less risk. Even if the film bombs at the box office and loses everything, the distributor bears those losses, while the producer can still securely get over 300 million yuan from the distributor.
However, if the film becomes a hit and exceeds 1 billion yuan, only a small portion of that additional money goes to the producer, with the distributor taking the lion’s share.
Of course, not everyone is eligible to sign such agreements. Often, only film series with famous directors’ golden reputations can receive such treatment.
But this also reflects a fact: in the film industry, distribution companies wield significant influence. For a film to be successful, substantial resources must be spent on promotion, so when it comes time to divide the profits, distributors certainly can’t be shortchanged.
If the distributor advances the film’s marketing and distribution costs, they will charge a distribution fee of 12-20% of the shared box office. If the distributor promises guarantees, buyouts, or advances production costs, this distribution fee will be even higher.
Many production companies don’t want to bear the marketing and distribution costs themselves to reduce risk, so a large chunk of the final box office revenue must be paid to distributors as distribution fees.
Many films may seem to perform well at the box office, but the production companies still lose money, precisely for this reason.
However, “Mission and Choice” was an anomaly—while it was a box office hit, very little money was spent on promotion!
When the distributor doesn’t bear the marketing and distribution costs, they can only collect 5-15% of the portion belonging to the producer-distributor as a distribution fee, which translates to merely 2-6% of the shareable box office.
This specific percentage would be adjusted based on the relative bargaining power between the two parties.
And with the successful experience of “Beautiful Tomorrow” and close ties with Shenhua Films, Fei Huang Studio obviously had greater bargaining power.
In other words, from the 1.5 billion yuan box office that “Mission and Choice” had earned, they could get at least 10% more than other films when it came to the actual revenue sharing!
At this level of box office, even one or two percentage points more could mean a difference of tens of millions.
Moreover, all these calculations were based on the current 1.5 billion yuan box office.
And the film was going to be extended for another 2 months!
Of course, according to conventional wisdom, even with a 2-month extension, the box office wouldn’t fluctuate too much. Getting an additional 5% of the total box office during the extension period would be considered good.
With a 1.5 billion yuan box office, the extension would add at most 60-70 million yuan.
This was because a film’s rise to popularity after release happens quickly. Within a month of release, those who wanted to see it would have seen it, and those who didn’t want to wouldn’t go see it. The box office supported by these “stragglers” wouldn’t be much, and theaters wouldn’t foolishly give it as many screenings anymore.
But the issue was that since “Mission and Choice” had no initial marketing and distribution push, it had more staying power. Its box office performance on the 30th day was still significantly above average, so the proportion of its extended box office was likely also better than other films.
This could easily mean millions more in box office revenue!
Moreover, the extended screening would maintain the film’s popularity. The higher the box office, the higher the record for domestic films would rise. Many domestic video websites wanting to purchase the film’s rights for their platforms would also offer more generous prices…
Pei Qian slumped in his executive chair, suddenly feeling a bit hopeless.
He had thought that with “Mission and Choice” ending its theatrical run, his hope was completely dead, which was why he had prepared to take a look at the box office and accept the cruel reality.
But after taking a look, he realized it wasn’t completely dead yet—it still needed to be cremated, and the crematorium was just starting to preheat!
“This is bad, the benefits for the 515 Gaming Festival were set too low…”
Pei Qian felt somewhat despondent.
The saddest thing in the world was thinking you had successfully completed your task and spent a large sum of money, only to discover that another large, unexpected sum was about to come in!
What could he do?
Pei Qian could only reopen the detailed rules document for the 515 Gaming Festival, considering how to make some remedies.
A gloomy atmosphere permeated the president’s office of Tenda Group.
…
Meanwhile, the scene at Longyu Group was completely different.
Zhao Xuming excitedly entered the meeting room and met with Eric.
“Good news!”
“The development team for ‘Eternal Hunter’ just announced that due to technical reasons, they’ve decided to postpone the game’s official launch until next month!”
Eric looked up from his work: “Oh?”
His eyes were also filled with delight.
Logically speaking, game developers delaying their release dates was very normal. Some delayed for a month or two, others for half a year—there was no upper limit.
A two-week delay like this wasn’t really big news.
But for Eric and Zhao Xuming, this was huge good news.
Eric chuckled: “They say it’s for technical reasons, but that’s probably just an excuse. After all, ‘Eternal Hunter’ has already gone through two rounds of testing without any major bugs, and the game was running quite well.”
Zhao Xuming nodded: “Exactly, they probably want to avoid us!”
“That’s perfect, we didn’t want to clash with them either.”
“Eternal Hunter” was an action mobile game developed with a massive budget. It had been promoted for several months with considerable fanfare.
Prior to this, the game had already undergone two rounds of testing, with overall positive reception and significant popularity.
The only problem was that the game’s official launch was scheduled for this Saturday, which clashed with the release date of the mobile version of IOI.
This had worried Zhao Xuming for a while.
Although he had absolute confidence in IOI mobile and believed it could hold its own against any competitor, a clash was still somewhat undesirable.
This was because there were only so many domestic channel partners and featured spots.
For instance, various mobile app marketplaces would negotiate with game companies in advance, allocating their best featured spots to games launching that month.
While IOI mobile could secure the best featured spots, “Eternal Hunter” would certainly get other good placements as well. This would inevitably split the player base, and IOI mobile’s metrics would definitely be affected.
But now, “Eternal Hunter” had wisely backed down!
Clearly, the people behind “Eternal Hunter” had also felt the pressure and decided that their chosen launch time wasn’t ideal. They decided to delay by two weeks to avoid the competition and ensure their game could enjoy maximum attention after launch.
Eric asked, “So now, none of the other games launching at the same time can compare to IOI mobile, right?”
Zhao Xuming nodded: “That’s right! Just a couple of days ago, I checked several app marketplaces. The other new games launching around the same time are all small productions that aren’t even in the same league as our mobile game—they won’t pose any threat.”
“I also looked at the few old games on the ranking lists. Tenda has several evergreen mobile games like GOG, ‘Hot-Blooded Battle Song,’ ‘Sea Fortress Mobile Version,’ and so on. But these games already have fixed player bases, so they shouldn’t directly compete with IOI mobile either.”
Eric was pleased: “Good, then let’s quickly arrange for the mobile game’s launch! Players have probably been getting impatient.”
Longyu Group had been promoting the IOI mobile game as a key project, almost to the point of overselling it. They had talked it up extensively at the previous press conference, and player expectations had already reached a peak.
If they continued to delay, player enthusiasm would gradually wane, which would be unfortunate.
Moreover, this was a critical period during Tenda’s “515 Gaming Festival.” If IOI mobile launched earlier, it could divert some of the attention from the “515 Gaming Festival” toward IOI mobile.
Zhao Xuming immediately went off happily to make arrangements.
After Zhao Xuming left, Eric took out his phone, opened the Shenhua App Market, and checked the popular new mobile games.
He didn’t doubt what Zhao Xuming had said, but he habitually wanted to take a look himself to feel more at ease.
Eric personally used a Pineapple phone, but for work purposes, he also had a Shenhua phone. After all, he was the IOI manager for the Greater China region, and Shenhua phones held a significant market share in the mainland market. The situation visible through the Shenhua App Market could reflect certain issues.
Suddenly, Eric’s gaze stopped at the top featured spot on the games page of the Shenhua App Market.
There was a game called “Fitness Battle” prominently displayed!
Eric was somewhat confused: “This kind of game gets the best featured spot?”
He browsed through the app market’s game rankings, including both free and top-grossing charts, but couldn’t find this game among the top twenty for the month displayed.
He then searched in two other app markets and found that “Fitness Battle” was indeed available there as well, but without the prime featured position it had on the Shenhua App Market. Its ranking on the top-grossing charts was also quite low.
“This game seems to have just launched today, so it hasn’t had time to climb the rankings yet.”
“It’s hard to tell whether it’s profitable or not at this point.”
“It seems to have some connection with Shenhua, as new games don’t typically get such featured spots unless the game company has significant influence.”
“From its current ranking, it doesn’t seem to pose a threat to IOI mobile.”
“I wonder if Zhao Xuming saw this game earlier? Maybe he didn’t see it at all, or maybe he saw it but didn’t pay attention…”
Eric initially didn’t think too much of it. After all, mobile game development was booming, with several new mobile games launching almost every day—nothing worth making a fuss about.
But when he casually clicked on the details page for “Fitness Battle” and saw the developer’s name, he instantly became alert.
It was made by Shangyang Games!
This was a critical period in the price war with Tenda Group, and Eric was highly vigilant. Seeing the words “Shangyang Games,” he immediately shed any dismissive attitude toward this game.
“No wonder the Shenhua App Market gave it such a good featured spot! They’re in cahoots with Mr. Pei!”
“With the user base of the Shenhua App Market, plus Tenda’s influence, this game might quickly climb to the top of the grossing charts…”
Eric was no fool; he instantly understood the dangerous implications of this.
Perhaps “Eternal Hunter” postponed their game launch not just to avoid IOI mobile but also to avoid “Fitness Battle”!
But what should they do next?
Should they also delay, like “Eternal Hunter”?
Eric quickly dismissed this idea.
On one hand, delaying would definitely clash with “Eternal Hunter,” which wouldn’t be easy to compete with. Instead, they would be handing over the market for the second half of the month to “Fitness Battle”—a lose-lose situation.
On the other hand, this was a critical moment during the “515 Gaming Festival.” If the game was delayed, how would players interpret it?
Either Finger Company was backing down, or Finger Company couldn’t keep its word and had project management issues—promising a launch date but then delaying.
Neither interpretation would be favorable for Eric!
After careful consideration, Eric decided to stick with the original plan—no delay!
If it were GOG mobile competing with IOI mobile, Eric would certainly lack confidence.
But “Fitness Battle” clearly seemed to be a casual game related to fitness, and it wasn’t developed by Tenda’s acclaimed game department but by Shangyang Games.
It would be too embarrassing if a MOBA game was afraid to compete with a casual game!
Moreover, while launching simultaneously carried risks, it also had benefits.
If IOI mobile could become wildly popular after launch, capturing significant public attention and completely overshadowing “Fitness Battle,” that would definitely be great news for the ongoing money-burning war between the two sides!
With this in mind, Eric didn’t notify Zhao Xuming about any delay. Instead, he stuck with the original plan to launch IOI mobile within this week.