A Comprehensive Guide to Negotiating in the Gaming Industry

How does compensation at a gaming company compare to FAANG? How is pay structured and what do career options look like? How do standalone gaming companies like Roblox or Epic compare to in-house game development organizations at large firms (like Amazon Game Studios)? How do you get the best possible job offer in the gaming industry? In this article we will offer clarity into all of this and more, with a goal of helping you land your next gaming job with a top offer. 

If you’d like more help reaching an optimal offer outcome, you can sign up below to talk with one of our negotiation experts!

Table of Contents

Technical Roles in the Gaming Industry

Most gaming companies hire for similar roles to other tech companies, including FAANG, but in specific functions. These functions include game programming, game design, game art, and game production. Common positions within these functions are programmers, testers, designers, UI/UX designers, product managers, and producers. 

There are other roles, like artists and sound engineers, that won’t be covered extensively here but can be found at most gaming companies.

What are the Best Gaming Companies?

There are a few types of gaming companies: studios/developers and publishers. A studio or developer designs and creates the games, while the publisher markets and sells the games. Some companies handle both. 

Studios and developers include companies like Tencent, Roblox, Amazon Games and Amazon Lab126 (among other Amazon gaming organizations). If you’re interested in publishers, look at companies like Steam or Take-Two Interactive. 

A lot of the well-known gaming companies are actually both publishers and developers, including Activision Blizzard, Nintendo, Electronic Arts, Epic Games, Riot Games, Rockstar Games, Microsoft, and Sony (whose subsidiary is Naughty Dog).

Demand is rising for those in the gaming industry. According to an article from CNBC, the industry “expanded 26% from 2019 to 2021, reaching a record $191 billion in size.” Additionally, “[s]ales of video games have consistently grown since at least 2015.” Although the sector was expected to contract just a bit in 2022 (but still end the year ahead of pre-pandemic numbers), growth is expected to return in 2023 - sales are expected to reach $195 billion! This demand has led established tech companies to continue delving further into gaming with streaming services like Stadia and Amazon Luna. 

Compensation Structure at Gaming Companies

The way compensation is structured at gaming companies is not unlike that of other companies in the tech industry. A typical offer comprises the following:

• Base Salary
• Bonus
• Equity (RSUs or stock options)
• Signing Bonus

Base Salary

As with most companies, the base salary at a gaming company is what you receive on your paycheck each pay period. Base salaries are usually the least negotiable since they’re the most consistently paid out and the least variable part of total compensation. 

Annual Bonus

An annual bonus - also called a performance bonus - can be structured a couple of ways. Some companies offer a bonus based solely on the company’s performance (typically against revenue goals or other financials) while others pay out a bonus based upon company performance and individual employee performance. An average performance bonus target is 5-30% of an employee’s base salary, but unfortunately bonuses aren’t guaranteed payment. If performance is low (whether the company’s or yours as an employee), you could earn a low - or no - bonus at all. It’s worth being aware that some companies only offer bonuses for certain levels (or pay different amounts per level). 

Equity (RSUs or stock options)

Many gaming companies (but not all) offer equity just like other tech companies. This can be in the form of restricted stock units (RSUs) or stock options (ISOs or NSOs). There is typically a vesting schedule that determines when and how frequently stock is paid out to you. A common vesting schedule is an even 25% annual four-year vest (meaning that if you’re awarded $200,000 in RSUs, you would have $50k paid out to you each year for four years). While common, that’s not the only vesting schedule you may encounter. Amazon, for example, backloads equity vesting so you receive 5% in year one, 15% in year two, and 40% each in years three and four. 

The table below shows a quick comparison between RSUs and stock options.

If you’d like to learn more about the different types of equity and gather startup-specific equity negotiation tips, check out our blog post here.

Signing Bonus

A signing bonus may be added to an offer to make it more enticing and increase the total compensation while avoiding a more consistent payout (like increasing the base salary). Signing bonuses are not always included in the first offer, and are instead added later, once you’ve asked for more money or provided leverage. Because a signing bonus is paid out only once (or twice, if it’s a two-year bonus), it’s one of the easier aspects of an offer to add or increase. You should always feel free to ask for a signing bonus; the worst they can say is no! 

Do be aware that your offer letter may include a “clawback” policy, meaning that if you leave the company before a certain time period, you’ll be required to pay back the signing bonus either in full or a prorated amount. 

Royalties

Although infrequent, some companies pay royalties from a game to the developers who worked on it. Activision has been known for offering this to some teams and it can also be seen at smaller indie game developers.

Gaming vs. FAANG Pay Comparison

Although roles in the gaming industry are often highly technical and in demand, these companies are known to pay a bit less on average as compared to most FAANG companies. Because games are mostly sold directly to consumers at a lower price point, a company’s revenue is lower than that of an enterprise software company. 

As frequently seen among other tech companies, the larger companies tend to pay more than the smaller ones. Some of the highest-paying game companies are Epic, Activision, Riot Games, and Roblox. Roblox and Epic specifically have reputations for being fairly competitive with FAANG companies. 

Offers from gaming companies such as Riot can be extremely competitive as well, for example, the base salary for a Principal PM at Riot can go up to $280k for the LA region. Additionally, to add some context about how competitive Roblox and the other larger gaming companies can be, we helped an IC5 Software Engineer at Roblox negotiate their total compensation to be over ~$800k (a mixture of base and equity). Note: this specific person did exceptionally well in their interviews and had very strong leverage going into the negotiations.

Another way to earn higher pay in gaming is by working for one of the FAANG-owned game studios like Amazon or Microsoft Game Studios or Meta’s Oculus. Working within the FAANG ecosystem in a tech role, you can expect to be paid similarly to an engineer or product manager who works on any other aspect of their software.

While average compensation may be lower than you’d find at a large tech company, the structure is similar and game companies have pay bands for each role and level. This means that the expected base salary, bonus, and equity will fall in line with a specific band per level - just like at any other tech company.

Gaming Companies' Negotiation Process

The process to negotiate your offer from a game company is not dissimilar than the process at any other company. You want to understand the makeup of the offer (which, if you’ve made it this far, you’ve already learned in this article!), know your own requirements and market data, and determine where you have leverage. 

To get a feeling for your requirements, dig into the market data and then think about the following numbers: 

Your Walk-Away Number: What is the lowest you would accept, with anything less causing you to walk away from the offer? This could be equal to your current salary or whatever is required to maintain your standard of living. 

Your Target Number: What would you be happy with? This number and the factors that go into it are different for everyone, but perhaps it’s a certain percentage increase from what you earn today, or maybe it’s the number that would help pay for something important to you (like a home or education). 

Your Aspiration Point: What would make you sign the offer on the spot? Start high and work your way down. Would you sign immediately for a million dollars? $900k, $800k, and so on? 

Keep in mind that the gaming industry assumes the people they hire are so passionate about games they’ll be open to lower compensation - and don’t sell yourself short even if you are deeply passionate about gaming. 

Where can you find market data? Try sites or apps like Team Blind, the H1B Salary Database, Levels.fyi, and Reddit (Glassdoor is often less accurate for technical roles). You can also search for job postings in states whose laws require companies to include pay ranges (Colorado, New York, Washington) - but be aware that some companies share ranges that are lower than their true budget, and others share ranges that are so wide it's nearly impossible to gauge what the role pays.

Once you have an idea of your ask, you need to think about what you can use as leverage. Relying on your past experience and education, your interview performance (if you know you knocked it out of the park), and any unique skills you bring to the table will be your best bet. You can also acknowledge competing offers if they are higher than this company’s offer. 

What you don’t want (or need) to use as leverage is your current compensation (unless it’s drastically higher than this offer, of course). In fact, you shouldn’t have to share this information at all. In some states it’s illegal for a recruiter to ask you for current or past salary, and even if it’s legal you’re never obligated to share. 

As mentioned earlier, it’s usually easiest to negotiate the variable pieces of the compensation package -  things like a signing bonus or equity - and companies often expect you to ask for a higher base, even if they’re less flexible there. But how do you actually have the conversation? 

Come into the conversation ready to discuss your leverage and your ask. By backing up your request with evidence (again, things like unique skills, proven experience, and market data) and make it clear what you would sign for. It feels nerve wracking, but it’s really as simple as saying something like, 

“Thank you again for sending over the offer details! I reviewed everything over the last few days, and based on what I’d need to walk away from my current company and the offer I have from [Company B], I’d be happy to sign with [Company A] today if you can get the compensation to [desired amount].”

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Remember that this company wants to hire you and it's in their best interest to do so. While a company may rely on a false sense of urgency to get you to reply quickly, know that you can take your time before making any final decisions, and you always have the right to walk away. Sometimes, walking away can even turn things around to your favor! One game developer went through an interview process to the very end, received an offer, and turned it down because he was unwilling to relocate for a role that didn’t pay what he hoped. A few months later, the company reached out again, but this time with a higher-level role on a different game - and threw in a bottle of fancy whiskey along with the offer letter they sent. 

More than likely, you’re reading this because you’re passionate about games and excited to take the next step in your gaming career. As thrilled as you might be to land a new role working on something you love, remember to advocate for yourself and ensure you receive the best offer possible. If you’re looking for more assistance, reach out to speak with one of our negotiation experts today!