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They usually finance the development, sometimes by paying a videogame developer (the publisher calls this external development) and sometimes by paying an internal staff of developers called a studio. The large videogame publishers also distribute the games they publish, while some smaller publishers instead hire distribution companies (or larger videogame publishers) to distribute the games they publish.
Other functions usually performed by the publisher include deciding on and paying for any license that the game may utilize; paying for localization; layout, printing, and possibly the writing of the user manual; and the creation of graphic design elements such as the box design.
Large publishers may also attempt to boost efficiency across all internal and external development teams by providing services such as sound design and code packages for commonly needed functionality.
Because the publisher usually finances development, it usually tries to manage development risk with a staff of producers or project managers to monitor the progress of the developer, critique ongoing development, and assist as necessary. Most videogames created by an external videogame developer are paid for with periodic advances on royalties. These advances are paid when the developer reaches certain stages of development, called milestones.
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