Products that include a hardware component - royalty applies to hardware revenue too?

Hey folks,
Like many folks posting here I have some confusion about the licensing.
My company sells fully-cooked hardware solutions with server-racks of computers and motion beds and display systems and the like.

Some of those computers may be running Unreal - (if I manage to port over from Unity)

The wording on the licensing, though, is 5% of gross. That gross includes all the hardware - that doesn’t seem right. Has anyone done, like, software-as-a-line-item breakdown for royalty calculations?

Like … If a store sold a copy of a game alongside a PS5 … Epic wouldn’t get a cut of the PS5 sale.