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# Royalities question

Just a little confused about the royalties fee when developing a game with Unreal Engine 4, if I have to pay a 5% royalty fee from the profits of a game, is this just a one-time payment for the game or is this annually?

It’s quarterly (3 months). You pay 5% on any REVENUE above \$3,000 in that period.

EDIT: Sorry, I don’t know why I said profit. I know it’s revenue, not profit. I blame lack of coffee.

Not 5% of your profit, but your gross revenue - like for all platform holders.

**Example: You sell 1,000 copies for \$ 10 each **

= \$ 10,000

• VAT (e.g. 19% -> (10,000 / 119) * 100 ~ \$ 1,600)
= \$ 8,400 Gross Revenue
• Platform Holder Cut (e.g. 30% -> \$ 8,400 * 0.3= \$ 2,520)
= \$ 5,880
• **Epic Cut **(5% -> \$ 8,400 * 0.05 = \$ 420) it’s based on gross revenue (\$ 8,400), not after platform holder cut
= \$ 5,460
• Your development costs (e.g. \$ 2,500)
= \$ 2,960 (this is the base for further company or income tax calculations - to simplify just take 30% -> \$ 2,960 * 0.3 = \$ 888)