Residuals and Leverage

Now with Add On!

SAG-AFTRA and Video Game producers aren't fighting over money. The battle centers around language.

Negotiations between SAG-AFTRA and the video game companies broke off late Wednesday night after the union rejected the companies’ final offer for a new contract. ...

The union has demanded that performers receive an additional full-scale payment for each 500,000 units sold, up to a maximum of four secondary payments if the game sells 2 million units.

The companies have steadfastly refused to include residuals as part of any compensation package, saying it would upend the industry’s business model. So in lieu of residuals, the companies have offered “additional compensation” on top of a performer’s regular pay depending on how many sessions were worked on each game. ...

The union countered with a nearly identical proposal that also maxed out at $950 in additional pay after eight session, but instead of calling it “additional compensation,” it called it a “residuals buyout.” ...

The companies, however, refused to call it that, saying it would be unfair to offer a buyout of something that isn’t offered to the hundreds of animators and programmers who develop the games. ...

This seems like a small thing, but the video game companies don't want the fleshy snout of "residuals" to shove its way under the tent. Once it's inside the rest of the animal will (eventually) follow. That, at least, is the companies' expressed fear.

This argument goes back to the forties, when the word "residuals" began to be bandied about inside the House of Labor. It took years for residuals to make their way into the contracts of entertainment unions, but today they're an accepted cost of doing business.

Could this ultimately hold true for video games? Sure it could, if SAG-AFTRA has sufficient leverage. Because leverage is what this negotiation is really about, not "fairness".

Add On: SAG-AFTRA announces:

SAG-AFTRA is striking the following video game employers: Activision Publishing, Inc.; Blindlight, LLC; Corps of Discovery Films; Disney Character Voices, Inc.; Electronic Arts Productions, Inc.; Formosa Interactive, LLC; Insomniac Games, Inc.; Interactive Associates, Inc.; Take 2 Interactive Software; VoiceWorks Productions, Inc.; and WB Games, Inc. The strike covers all games made by these companies that went into production after Feb. 17, 2015.

SAG-AFTRA members will picket Electronic Arts in Playa Vista, CA at 10:30 a.m. PT, Monday, Oct. 24. ...

And we'll soon see where this goes.