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Question - If I get someone to fund me while working on my game...

…And after it finished I publish it for free.
Do I still have to pay that 5% to epic?
Or is it relevant only if I sell my game?

Normally if you sell it for free, you don’t have an income of 3000$ per quarter so you won’t have to pay 5% to epic

And what if I’v got lucky and sponsers are willing to give me about 500,000$ ( I wish lol ) to build the game that will be published for free?

If your game is distributed for free, you won’t have to pay no matter how much money you will take for making it.
Epic games take a profit as you sell a game with** their engine**. Making a profit for making the game in their engine is up to you.

If someone is investing the money to make the game that will be given for free then there’s nothing that you have to pay royalty on.

But wouldnt create that a loophole: :confused:

I create a game while getting funded by a “friend”. After the game is finished, I give the game for free to my friend as a birthday present. (Im a nice guy, you know).
Then my friend starts selling the game. Since he has nothing to do with Epic, no royalties apply.
And because he is such a nice guy he gives me his brand new Ferrari. He sais he is too busy playing my game, so he doesnt have time to drive it anymore :rolleyes:
In short: One makes the game, the other get it for free and his profits then are “safe” from Epic…

Or did I miss something here?

That’s what others said, you pay if you’re selling. In this case, your friend.

But he does not have an agreement with Epic. Not even an account. How could Epic have a case against him…?
He did not agree to any Epic EULA and is not bound to anything…
All he has is a game and he does not have to care where it came from (was a gift).

If it is a gift, he can play it for free, he cannot sell it. If he goes on selling YOUR game that will mean that you have given him permission to do so as the copyright of the game is assigned to you, so automatically you are in charge of this situation so you’ll have to pay royalty(if the game succeeds).

Dunno if epic games will start looking who made the game though. If I was epic I would only care about WHO sold my game with MY engine and the one who is selling it will pay the royalty.

If its a gift he can do whatever he wants with it. :slight_smile:
Im not forced to put any restrictive license on my game, am I ?

Perhaps he would be responsible for Royalty Payments, but where do I have a fiduciary obligation to inform my friend about this… :smiley:
And even if so, then, instead of giving it to a friend who could make 5000 per quarter and thus be applicable for royalties, I give it to 5 friends for free, each making a 1000 per quarter.

In the end, I guess, it would be too much effort for just saving 5% (which is a very very fair rate), if one is barely above the threshold.
And if one make a 1000000+ hit, then the 5% are insignificant anyway.

I guess its justas Jay Wilbur said in a Twitch stream: “People only start looking wether they might have claims against you, once you are becoming successfull. Not before…” :slight_smile:

Playing with words won’t help you at court… It will be decided for you or your friend to pay.
And in final analysis you can’t gift something to someone and not informing him that “This gift I give you has restrictions made by it’s creator minding you want to sell it”. It’s as simple as that. It’s like I make an application then I sell it to you ok? Good that’s fine, now you can do what you want with it, but can you resell it as your own? No man, you’ll have to ask me and there I will tell you my restrictions… It’s simple logic…
Making a game with epic games engine doesn’t mean you entirely own the game, a part of it is epic’s as you make a game based on “a game” they made for you…

I would liken that scenario to kick-starter where it specifically says that you have to pay the royalty from the raised funds because even though it is only 1 person/organisation there is still someone paying for the game to be made.

FAQ Page

*What if my product obtains crowdfunding via Kickstarter or another source?
Royalties are due on revenue from Kickstarter or other crowdfunding sources when the revenue is actually attributable to your product. For example, if the user is required to purchase a particular funding package to obtain access (now or later) to your product, or if that package gives the buyer benefits within the product such as in-game items or virtual currency.

Here’s an example of what we mean by “attributable”: Assume you provide two tiers of offers, a signed poster for $20, and a signed poster plus game access for $50. No royalties are due on ancillary products like posters, so no royalty is due on the $20 tier. On the $50 tier, the user is paying for the poster with a $20 value, and that implies that the remaining $30 of value is attributable to the product. So, for each $50 tier sale, you’d pay a royalty of $1.50 (5% of $30).

Are any revenue sources royalty-free?
Yes! The following revenue sources are royalty-free:

Ancillary products, including t-shirts, CDs, plushies, action figures and books. The exception is items with embedded data or information, such as QR codes, that affect the operation of the product.
Consulting and work-for-hire services using the engine. This applies to architects using the engine to create visualizations as well as consultants receiving a development fee.
Non-interactive linear media, including movies, animated films and cartoons distributed as video.
Cabinet-based arcade games and amusement park rides.
Truly free games and apps (with no associated revenue).*

Honestly, if people spent as much time developing as trying to find hypothetical loopholes in the EULA, they’d all be millionaires by now, anyway.:rolleyes:

working is working
finding holes in EULA is not working

Btw has anyone made some money of his game over the internet in here? I wonder about taxes, does anyone actually let the country knew and pay taxes for it?

I’ve googled this before and the only reply I saw was to ask an accountant because it depends as in every country things are different

That can be the same thing.
I, for example, wonder about these things because i would like to have a similar EULA for my company.
So I wonder what I have to watch out for.

If you make the game for someone else and they sell it then they would have to pay royalties. Otherwise, they would not have the right to sell it.

There are a lot of different points in this thread and I won’t try to answer every single one of them. But to the main points:

If you are selling a game for free, there is no revenue.

If someone gives you money to make a game, there is no royalty on that money IF it’s a pure donation (i.e., they don’t get anything in return). If they get in-game access or benefit, it’s not a donation so there are royalties. Developer advances are not donations because they are recoupable against future sales.

You can give a game to a friend for free, and then if they sell it YOU owe royalties. The comments are correct that the friend is not Epic’s licensee - you are. In a more practical scenario, it’s a publisher rather than a friend. As Epic’s licensee, you the developer are responsible for royalties on gross sales of the game even if the publisher is the one actually selling it. Now the publisher could also be a licensee in which case they could arrange to cover royalties themselves, but that would need to be worked out.

Touching on another point, you are permitted to license your game under terms of your choosing (other than prohibited licenses like GPL per the EULA), but worth noting that restrictive terms can protect you from owing royalties on sales that you don’t control.

If I’ve missed a point you want answered, let me know.

Kinda off topic, but i’m interesting, how people manage projects when they are working online, like outsource, i’m talking about legal aspect of their relations. There are contracts in real world, how is that working online? And, how do you pay royalty to epic, do you provide the report from sales on steam or something?