11 KiB
Session 6: Equitable Economics
Welcome
Tag Yourself
Intro – 5 min
Last session you designed governance structures. Now we test them on the hardest topic: Money.
In traditional studios, financial information is hoarded. If the boss says we can't afford raises, how do you know that's true if you don't have access to the books? If you've been the victim of the sudden shuttering of a studio, you probably didn't see it coming, because you never saw the real financial picture.
Secrecy entrenches power. In a cooperative, we have the opportunity to bust this wide open.
Check-in – 10 min
Last session's homework asked you to discuss: What does financial sustainability look like for you personally? What would you need from this project?
Anyone want to share what came up in that conversation?
And think about what financial information have you never been allowed to see at work?
Part 1: Where money comes from – 15 min
We're going to talk about transparency and sharing in a bit. But we want to start with the good stuff!
Where does money actually come from for game studios and creative cooperatives?
Most sustainable studios don't rely on a single revenue stream.
Member contributions
- Member shares – equity buy-in when you join
- Member loans – members lending to the co-op, sometimes with interest
- Sweat equity – labour contributed before there's money to pay wages
Grants and public funding
- Arts councils – Ontario Arts Council, Canada Council
- Industry programs – Ontario Creates, Canada Media Fund, etc.
- Municipal and regional funds
- Project-specific grants
Revenue from work
- Publisher advances and deals
- Platform funding – Epic MegaGrants, id@XBOX etc.
- Client work and contracts
- Direct sales
- Crowdfunding
- Service/contract work – porting, QA, art assets, sound design for other studios
- Adjacent creative work – animation, writing, interactive installations
- Knowledge work – workshops, speaking, consulting, teaching
Investment and loans
- Impact investors (like Weird Ghosts and others)
- Co-op development funds (CWCF's Tenacity Works, regional funds)
- Credit unions and community lenders
- Traditional bank loans (harder to access for co-ops)
Adapted from Effective Practices in Starting Co-ops
This needs to be a collective and intentional decision. Developing and maintaining these streams require time and effort that can eat into your actual game development.
Coops have different capital options than traditional startups. Venture capital doesn't work for us – VCs want big returns on their investment and eventually an "exit" (sale), which conflicts with worker ownership. On the other hand, we have access to funding streams that prioritize social impact over profit maximization.
Cooperation among cooperatives is one of the ICA cooperative principles we talked about a few weeks ago. When you do take on client or contract work, consider prioritizing work with other coops and solidarity economy organizations. This is a way we can build a "trade network" that helps everyone!
So think about: What funding sources has your studio used or considered? What feels aligned with your values?
Part 2: Financial transparency – 15 min
Why transparency?
- Financial secrecy is a tool of control
- Open books = shared power
- When everyone understands the money, everyone can participate in real decisions
Basic practices
- Share monthly financial summaries with all members
- Open-book policy (anyone can see the full accounts)
- Make all compensation transparent (everyone knows what everyone earns)
- Plan budgets collectively – this practice is sometimes called participatory budgeting, where members have real decision-making power over how money is allocated
Tips for accessibility
- Use plain language – not everyone speaks accounting.
- Summarize number-dense spreadsheets ("we have 8 months of operating costs in the bank")
- Create space for questions. There are no embarrassing questions about money – most of us were never taught this stuff.
- Visual dashboards can help. Tools like CoBudget or OpenCollective make finances visible, or even just a shared spreadsheet
Tell the messy truth
Transparency isn't just internal. When you're doing public-facing work like crowdfunding, devlogs, community updates, try to be honest about struggles, not just successes. When the story gets ahead of the reality, slow down and catch up.
Common resistance
We have heard – what if competitors see our numbers?
But for real – what's actually at risk versus what's just discomfort? Most studios aren't competing on secret financial information. Is this fear really about vulnerability?
Resource: Seeds for Change – Finance
Part 3: Compensation models – 20 min
SO! How do cooperatives pay people? There's no single right answer, but whatever you choose should be transparent and collectively decided.
we have tools to help you try out these models at coop.love
Models to consider
Equal pay: Everyone earns the same hourly or monthly rate regardless of role.
- Pros: Simple, values all contributions equally, prevents hierarchy creep
- Cons: Doesn't account for different needs or experience levels
Needs-based: Pay is adjusted based on members' actual financial needs (rent, dependents, debt, etc.)
- Pros: Addresses real inequity, mutual care in action
- Cons: Requires vulnerability and trust, can feel uncomfortable to discuss
Role-based: Different rates for different roles or skill levels.
- Pros: Familiar, can help attract specialized skills
- Cons: Can recreate the hierarchies you're trying to escape
Hybrid approaches: Base rate + adjustments, or equal base with different hours allocated
Whatever model you choose, think about: What do we collectively believe is fair, and can we talk openly about it?
Activity – 10 min
In studio groups, discuss:
- What feels fair to you?
- What would you need to know about each other to decide on a compensation model?
- What conversations would be uncomfortable, and what does that reveal?
Share back with the group.
Part 4: Profit-sharing basics – 20 min
What is profit-sharing in a coop?
When the cooperative has surplus (revenue beyond expenses), how does it get distributed? This is fundamentally different from how corporations work.
Three types of money flowing to members
Wages: Payment for work performed. This is an expense, not profit-sharing.
Patronage returns (or "dividends"): Distribution of surplus based on members' contribution to the coop – usually measured by hours worked. This is what makes coops different: surplus flows to the people who created it, not to outside investors.
Member shares: Your equity stake in the coop. Usually a fixed amount you pay to join, returned when you leave.
Common approaches to distributing surplus
- Equal split: Divide surplus equally among all members
- Hours-based: Distribute based on hours worked since last distribution
- Hybrid: Some percentage equal, some percentage hours-based
- Contribution-based: Weighted by type of contribution (common in coops where some members bring capital, others bring labour)
When to distribute versus when to reserve
This is a values conversation!
- Build a reserve first. How many months of runway do you want before distributing anything? – there's no right answer.
- Distribute when you have genuine surplus, not just a good month
- Decide collectively if you want cash now or investment in the studio's future?
- Some coops allocate a percentage of surplus to a "collective account" for shared needs
Incorporation context
Cooperative legislation is provincial in Canada, so the rules depend on where you incorporate.
Ontario: Worker coops can distribute patronage returns to members based on their labour contribution. There's flexibility in how you structure this – you decide the formula in your bylaws.
Federal: You can also incorporate under the Canada Cooperatives Act, which has its own rules.
However you structure it, patronage returns flow to workers based on their labour – not to outside shareholders based on their investment. This is the legal mechanism that grounds worker ownership.
Discussion
Any questions about how this would work for your studio?
Part 5: Who owns what you make together? – 10 min
We've talked about how surplus flows to members. Buuuut, before you can share surplus you need to decide who owns what you're creating together!
In traditional studios, the company owns everything. Employees have no claim to their creative work. When the studio sells or shuts down, workers walk away with nothing.
Cooperatives can do this differently with explicit decisions!
Questions to discuss as a studio
- Who owns the game?
– the cooperative as an entity? individual members jointly? a mix?
– if the coop owns it, what happens to that ownership if someone leaves? - What about work created before the coop formed?
– if someone brings existing assets, code, or designs into the project, do they retain individual ownership or contribute it to the collective?
– how do you value those contributions? - What happens if someone leaves mid-project?
– do they retain any ownership stake in work they contributed to?
– can they take "their" assets (character designs, code they wrote) with them?
– what's the difference between leaving voluntarily vs. being asked to leave? - What happens if the studio dissolves?
– who controls the ip? can one member buy out others?
– what if you can't agree?
Not deciding means you're going to default to whatever legal structure you eventually incorporate under. Worst case scenario is realizing too late that everyone's expectations were mismatched.
A note on sweat equity
If you haven't started selling your game yet and members are contributing labour without pay, how does that translate to ownership?
"Sweat equity" is complicated. Some coops track hours and convert them to ownership stakes. Others treat all founding members as equal regardless of hours contributed. However you do it, everyone needs to understand and agree to the approach.
Use your Peer Support session to start this conversation. You don't need answers yet – just notice where you're in agreement and where you're uncertain.
Closing – 5 min
Financial conversations can be really difficult. They reveal vulnerabilities, and tensions about values, fairness, and trust. There's so much space for conflict to show up here.
In the next session, we'll build tools for navigating disagreement constructively.
Think about: Is there a financial conversation your team has been avoiding?
Homework (with Peer Supports)
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Discuss financial transparency – What financial information would feel vulnerable to share? What would you need to feel safe sharing it? What have you never been allowed to see at a workplace – and what would have been different if you had?
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Discuss compensation models – What feels fair to you? Where do you notice tension between "fair" and "comfortable"? What do you need to know about each other's situations to decide together?