Revenue Share vs Equity

The short version

Revenue share gives you a percentage of what a project earns. It's a contractual claim on income. When the game makes money, you get your cut of it — and if the studio is later sold, you typically get nothing from that sale, because you never owned any of the studio.

Equity gives you a percentage of a company. You own part of the business itself. That can pay out through profit distributions, or through a sale of the company, and it usually comes with governance rights — voting, information, a say in decisions.

You can have either, both, or neither. What matters is knowing which one is being offered, because "you'll get 10%" means dramatically different things depending on the answer.

How they differ in practice

What you're paid from

Rev-share pays from project income, usually after platform cuts and agreed expenses. Equity pays from company profits or from a sale — a company can have revenue and still never distribute profit.

What happens on a sale

If the studio is acquired, equity holders share the proceeds. Revenue-share holders generally don't, unless the agreement explicitly survives the sale — which is a clause worth checking for.

Control and information

Equity often carries voting rights and a right to see the books. Revenue share usually carries neither, so you may have no formal visibility into the numbers your payment is calculated from.

Complexity and cost

Rev-share is a contract between parties. Equity means issuing shares in a legal entity, with company law, share registers and tax consequences attached. Equity is significantly more involved to set up correctly.

How long it lasts

Rev-share is usually tied to a project and may end when the project stops earning. Equity persists until you sell it or the company ends.

Risk profile

Rev-share pays if the project earns, regardless of whether the company is profitable overall. Equity pays if the company does well, even if one project doesn't.

Which one indie teams usually want

For a single game made by a team that came together for that game, revenue share is normally the better fit. The thing being created is a project, not a company, and tying contributor rewards to that project's income keeps the arrangement proportionate and simple.

Equity makes more sense when there's an actual ongoing business — a studio expecting to make several games, with shared infrastructure and a plan that outlasts any one release. In that case a contributor's stake in future work isn't well captured by one project's revenue.

A common and reasonable arrangement is rev-share on the current project, with equity reserved for the small number of people genuinely building the company. Problems start when the two get promised loosely to the same person and nobody records which was meant.

Questions

Someone offered me "10% of the game". Which is it?

Unclear, and that's the problem — ask. "10% of the game" could mean 10% of net revenue, 10% of the developer's share after the platform cut, or 10% of a company. Get the answer in writing before doing the work.

Can revenue share convert into equity later?

It can if the agreement provides for it, but that has to be written in deliberately — it doesn't happen by default, and retrofitting it once a company has value is much harder than agreeing it early.

Which is better for the person doing the work?

Neither is universally better. Revenue share is simpler, more likely to pay out on a successful single game, and doesn't depend on company profitability. Equity has more upside if the studio itself becomes valuable, and more ways to end up worth nothing.

Do I need a lawyer?

For revenue share on a small project, a clear written agreement between reasonable people is often enough. For equity, yes — issuing shares has legal and tax consequences that vary by jurisdiction, and getting it wrong is expensive to unwind. This page is general information, not legal advice.