A new UE4 user, need help getting clarity about royalty fee

[Galeon]

@FrostedPotato;666303

This information is not correct. It says you are exempt from until profits go above 3k
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Why it is not correct ?

The example is right about the 5% above 3000$ per quarter.

Q1
–January--------------- You sell 400 copies (400 x 10) wich nets you 4000 dollars.
–February-------------- You sell 450 copies (450 x 10) wich nets you 4500 dollars.
–March----------------- You sell 350 copies (350 x 10) wich nets you 3500 dollars.
Total profit: 12.000 dollars. thats 5% fee over 9000 dollars = 450 dollars

[Genova]

bumping this old thread, but there is something I couldn’t find information on : what about refunds? Does the royalty fee apply to sales regardless if they get refunded?

say you sell 10 000 copies of a game for 10$, you’ll then have $100K. Woot that’s fantastic. Then it’s the end of the quarter and time to pay Epic its 5% royalties fee : $5K. You have 95k in your bank account, that’s still awesome.
But something apocalyptic happens and 100% of the customers decide to get a refund. You have to pay back all of the $100K to the unhappy customers, but there is a problem, you already gave $5K to Epic.

Although it’s a very unrealistic scenario, is that how it works?

[darthviper107]

That type of thing isn’t going to happen, but you could very easily have a situation where someone buys a game right before the end of the quarter and then refunds it after, I’m not sure how Epic would handle that type of thing, it wouldn’t be a whole lot, my guess is that you should be allowed to adjust for that in your next quarter.

[Blue_man]

I have a question, do we need to send a report to Epic if we are making less than 3k. I haven’t made anything on my game because I only have a demo so I’m not sure if I should be sending reports.

[StrangerGwenn]

You should.

[Blue_man]

@Gwenn;730260

You should.

Found this in the EULA (super confusing)

Do I need to report royalties forever?
No, you only need to report royalties when you are making more than $3,000 per quarter from your product. If your game no longer is being sold, or no longer makes that amount of money, no royalty reports are due.

[Zeblote]

What’s confusing about it? It just says you don’t have to report royalties if you’re making less than $3000.

[Blue_man]

Because in another part of EULA it says that you have to start sending reports as soon as your game starts making money.

[StrangerGwenn]

Well, my bad, I’ve re-read the EULA and it does state that you should report revenue for each quarter that goes above the $3k threshold. So it would look like you don’t need to.

[Makan]

@Deckro

Thank you for clarifying this up for me, I have indeed missed that information. I have tried to click the link that is going to the EULA and the link wasn’t working for me, only the chinese/japanese link worked somehow. Again, thank you for this information.

About the last part you mentioned form the EULA; if your Product earns $10 on the App Store, Apple may pay you $7 (having deducted 30% as a distribution fee), but your royalty to Epic would still be 5% of $10 (or $0.50). I don’t want to argue about this or anything, but it does say (like Jezcentral mentioned) that it’s about revenue. This actually means that it’s money that a company get in their hands after selling a product or service. So it SHOULD be 5% from $7 not %10 because that is the actual revenue, if I’m not mistaken. Anyway It doesn’t apply for the first 3000 dollars, so that makes it a totally differant story.

I would just be like;

• I make a game and start selling it (lets say the apple store).
• I would create a seperate bank account so that all money coming in is just from that product.
• I would look how much money came into that bank account each quarter and pay 5% from that to Epic.

I have to say that Unity does this a bit more understandable. you just pay monthly for the use of their engine (pro) and you pay nothing else for the products you made with it, even if you earned millions.
You just have a monthly amount to pay for as long as you use their engine, so if your game is finished and you have no bugs/mistakes (wonder product) you don’t need the engine anymore and the payment stops. With unreal 4 it seems like you have to keep track of your product and the income you are getting all the time, making sure you have a complete picture of all the money trails.

I again want to thank you all for the help on this subject. I guess that if I have more questions about this in the future I could contact support?

If you sell 100K with Unity per year, you need to use the pro version, and Unity is really a raw game engine, you need to pay for lots asset to get it working IMO, but I agree the per calendar quarter can be a painful process!