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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. :frowning: 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)
    = $ 2,072 Your profit

Which leads to…

Money in your bank account: $ 4,572
Platform Holder Cut: $ 2,520
Epic’s Cut: $ 420

Hope this helps.

@swagentrotz got us covered!

Okay thanks guys.