Confused in which situations I'll need to pay royalties

Community Community & Industry Discussion
1

  1. Suppose I have a game and a server, and it’s free to play, but you can buy items to change your appearance) and I exceed the 3000 per calendar quarter, do I have to pay? I guess so, but I’m not sure.

  2. Suppose I have a game and a server, and I want to create a third application like a voice/chat/launcher with some 3d, of course this is not the actual game, but an utlity
    but comes in the same installer as the game client, I’m I supposed to pay royalties if I get more than 3000$ in revenues from the game?

  3. Same as 2, except this chat/voice is not bundled with the client, ie I have 2 links in my website, 1 for the game, and another for this utility that is free. Do I still have to pay…

Thanks very much!

2

All of the above.

If you make a game in UE4, and use it to generate income in some way, you pay royalties.

3

If you have to pay to access something that you’ve made with UE4 then you would have to pay. So for example a game with in-app purchases would require royalties.
If you make a chat app with UE4 that can be downloaded for free and does not feature in-app purchases and you can use without paying for something else then you don’t have to pay anything (because complete access to the UE4 app is free)

4

An exception is linear content like videos and movies.

5

I am still a bit confused on this. So when do we pay and how much??

6

If you make money off of software made with UE4 and the software makes more than $3,000 in a quarter then you must pay 5% royalty on the amount above $3,000

If you use UE4 to make a video or an image you do not owe royalties (non-interactive media)

7

Isn’t that the same as 3)? [or 2) maybe]

In both cases, there’s no app purchase inside the chat application, only in the actual game (which is another software, another application.exe) which was made 100% without Unreal Engine4.

And if that’s true, I’m guessing the application shouldn’t be bundled with the game client, that’s why I said 2 links in the website, 1 for the game, 1 for the chat. Players wouldn’t need to download that chat software in order to play the game.

Sorry, I’m still heavily confused.

The reason why I’m asking this is because I have a semi working game, but it’s too soon to use UE4 since I haven’t ever used this engine.

So I would like to learn how to use it by making a chat application or smt like it, and once I’ve learned how to properly use UE4, then I would use it for the game as well, and pay royalties if I exceed the 3k$.

This is why 1) wasn’t so clear to me and still isn’t.
Some games require you to pay to access the game, or download it (app store).
Some games you can download it for free, and play as long as you want, but they also sell things inside the game (WHICH you are NOT required to buy to play the game, you can avoid that forever).

In my case, my game would be the 2nd type of game, which is why I’m asking.

Another (probably vage example):

Imagine I create a client map editor for WOW using UE4, and I give blizzard this app and they use it in their client.
Now suddendly they have to pay royalties for the money they earn with their WOW subscriptions? even tho it’s simply a map editor, but comes bundled with the game?
Or like I said, it cannot be bundled/packaged with the wow client in order for it to be free? or blizzard cannot release this app in order to be free?, ie I would have to release it?

I think what I eventually wanna know is how to create/integrate a free UE4 software with a game client that is not free.

/*
The way I see it things should be like:
If the map editor software comes bundled with the game client, and you sell the client as a whole (app store style), then you would have to pay royalties.
If the map editor software comes bundled with the game client, and you can’t buy anything inside the map editor, then you shouldn’t have to pay for the money earned with the game client.
If the map editor software is not bundled with the game client, and offered as an optional free software in the same company website, then you shouldn’t have to pay for the money earned with the game client.
*/

8

If the user has to pay something to access or use a UE4 app or to make in-app purchases within the UE4 app then you owe royalties.

If you have an installer for your game which users can download for free and the installer includes your non-UE4 game which features in-app purchases and the installer also includes a separate UE4 app that does not require any cost to use or access (it can be used separately) then you wouldn’t owe any royalties for the UE4 app since the UE4 app can be accessed and used for free.

9

No, this is incorrect.

If the UE4 application is used in any way to promote a paid product (for example, is a totally free download used to advertised a website / product that is paid for than royalties are still owed.

10

That is not correct, for example you can use UE4 to create images and videos and sell them without paying royalties. If what you’re saying is true then you wouldn’t be able to release demos for free without paying something since it would be promoting the paid game.
Besides that, in this situation it is a free product by itself included with a separate app. Whether the other app makes money or not doesn’t impact the UE4 app since you would be able to download the installer and use the UE4 app for free by itself (you could even not use the main non-UE4 app at all)

11

No, it is correct.

Images and videos don’t require distributing an application, so no royalty is paid. If you are distributing an application that is tied to a payment elsewhere (e.g. the game is essentially an advertising gimmick or whatever), then the royalty does apply. It’s essentially the same as offering the game for free on a website that has something like google ads on.

12

So the chat program is made with UE4. Also, its 100% free and not required.
The game was made using X program, costs 10$ (i made that cost up)

So, 1 (or 10,000) user(s) uses the chat thing, he makes $5,000. He owes 5% of $2,000 due to the chat program being used (since it was made in UE4, but, not the game itself). That is correct?

13

That’s what I’ve been lead to believe, yes - the ‘free’ UE4 application has been used to promote a paid service, so meets the royalty criteria.

Why someone would actually do that is another question.

14

For this situation that is not correct, since the UE4 app can be used without generating any income, whereas ads on a site will be active and generate income before you can use the app. Like I said, if what you say is correct then you wouldn’t be able to distribute a demo for free since it promotes a paid app.

15

That’s nonsense. Obviously the demo promotes the game, but you’re paying a royalty already because you’re making an income by selling a game.

16
17

Exactly like I was saying, the chat app is included in the installer and can be used by itself without using the other app, so there’s no revenue associated with the chat app.

18

Do I have to pay royalties if I don’t intend to generate revenue whatsoever? Like if my game is free with no in-app purchases.

19

…if you’re generating precisely 0 revenue, what do you expect to pay royalties on?