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Unreal4 gross revenue

hello,

I made a multiplayer game and lets say I get 100k gross revenue from my game via advertisement and selling the game and I have 60k server costs to operate the game. Do I have to pay 5% from 100k or 5% from 40k???

thx

The calculations are made using the total gross revenue.

So, each quarter you’ll have to pay: 5% x (TOTAL_QUARTER_GROSS_REVENUE - 3k).

For example, if you made 100k in a single quarter, then you own EPIC: 5% x (100k - 3k) -> $4850

EvilCleric is right. Also, don’t forget that gross revenue includes the percentage online stores charge (usually 30%).

Wouldn’t it take into account, how much of your revenue he is taken from the product that uses UE4, there is ways around every thing

It’s also possible to steal items from grocery stores without paying for them. If you don’t get caught, it’s free!
Also, think of all the free cars that are parked at the side of the road, and all you need is a forklift to lift them onto a flat bed truck and you can take them home!

Given that the engine can be downloaded by anyone, and you could conceivably just “forget” to tell Epic about your sales, there’s obviously a bit of honor system involved, where dishonest people can hide in the dark corners.
If you do this in the US, and you have a reasonably successful game where Epic will discover you, you’ll likely have to pay more to the lawyers to defend yourself from the lawsuit, than it would cost up front just to give Epic what they deserve.

I’ve learned that it doesn’t usually pay to worry about all the bad things that COULD happen; instead focus on making sure the good things DO happen!

  1. 5% is nothing compared to the 30% cut Steam or any other store will take.

  2. It’s fairly easy for Epic to get a rough estimate on how many sales your game is making. (Steamspy for example).

not really what I was saying directly, but I can see how that statement is saying that,
if your trying to minimize what other people are taken out of your profit margin is very good way to run a business, I would say that Epic would spend some amount of money trying to pay as less Tax a possible, so are they stealing from what ever government they have to pay Tax too? its all relative

I haven’t read the terms and condition that much but a question is
if I own a studio, that studio is it’s own company that makes a game using UE4, then I set up anther company with a different director then I sell units of that game to the other company for $5, then that company sell to anther store for $30, witch percentage are epic going to get? is it the revenue from the company that made the game? it cat be the two, because that is double dipping,

If you own both companies then you’d pay 5% royalty on the $30. You’re not going to be able to funnel the game through a different company to avoid a 5% royalty and still get the profit, I’m guessing that would be some kind of illegal operation.

It is my understanding (I’ve dealt with in-house engines and it works this way) that you pay Epic 5% of ANYTHING your game makes and Epic is the top of the stack, for example lets say your game makes $100, you give Epic 5% (which is $5 in this case), then you give Steam $30, which is 30% of the original value the game made. As far as I’m aware percentages given to any middlewere/companies you use percentages are based on the original values made and not after operating costs. Now Epic lets you make your first $3000 per year without owing 5%, so once you’ve worked out how much you have to pay them, you take $3000 off.

If you have further questions I’d recommend asking Epic directly, just know that Epic asking for only 5% for allowing you to use their engine is absolutely amazing and only 10 years ago you’d be looking at 30% - 50% of your profits for a AAA game like Unreal Engine.

edit:
I need to add that you should also double check what plugins and middlewere your game uses and make sure you don’t need to pay them anything or come to any license agreements (a usual clause is that you include their logos in splash screens), check license agreements on each respective system, for example if you use SpeedTree do check that you don’t need to pay them a percentage of what you make. SpeedTree may have changed their licensing agreement since I’ve worked with it but it used to be the case that you had to include their logo in a splash screen and any credits and It’ll be safe to assume that this is still the case.

Yes. And what happens is that the government needs to raise taxes to compensate for the lost income, which hurts the honest people more than the dishonest people. I abhor this thinking, because it’s morally bankrupt.

Only to people who believe it’s OK to make themselves richer at other people’s expense. You can never legislate decency and morals, but society would collapse if human beings ONLY followed the law, and didn’t have a moral compass based on “society must still work if everyone does what I do.” Those who choose to ignore that second half of the social contract are a scourge on the Earth, and anything that rewards those people should be fought with fire, because they destroy what we all have. (See also: Tragedy of the Commons.)

So, don’t be a bad person; do the right thing from the beginning. Normal human beings wouldn’t even ask “how can I cheat EPIC out of some money when I couldn’t possibly have created my game without them in the first place.” If you try to weasel your way out of it, chances are that EPIC has more resources than you if you’re small, and that you have enough juicy profits to feed the lawers on contingency if you’re big. Even a sociopath could see the logic in this. Only a deluded sociopath would try to cheat on the license.

it not illegal, you still pay Tax on it, a company is it’s own person and who owns it can be a little hazy. if the second company is set up as a store then why not, it has it’s own agreement with the fist company it’s just on selling it, the agreement is with the fist company not the second, but how that looks with the agreement I don’t know, I guess what I am saying with this probably bad example is that Epics agreement would be water tight, there always a way to minimize how much to pay to people, and I will stress the word minimize, not saying don’t tell them or not at all or do anything illegal, its just a matter of getting the right advice, most in it’s just probably better to keep it simple, wither it’s cheaper to just pay Epic the 5% and try to work the numbers somewhere ells,

jwatte @ Goolge, apple, Samsung, and a host of many other company’s Pay little to no Tax in just about every country they sell in, and people eat up there products like free food, apple have been doing it for years the “unmoral thing”, yet we all hold Steve jobs in such high regards, they made a movie about how grate he is so…ummm, before we get al moral on every one we all support it, and epic would be doing it as well

The agreement doesn’t just apply to the developer, it applies to the product. I’d highly recommend against your risky ideas because it’s likely illegal to try and get around an agreement that way, you’re not the first person to think of something like that.

100% agree and maybe trying to find way around may be more expensive then just paying the 5%, there just seems to be a lot of people/ companies with there hands in your pockets taking money out to get there slice of the action, if it’s epic, steam, governments or other people, they want there share of your success, wether your product is success in terms of money made for you, it doesn’t matter, because they are taking it before you see it, theses people/company’s will take money from you or your company even you don’t have it, they will wave there contracts/ Laws in front of you demanding it, they don’t give a flying that you or your company is on the brink. the law is the law, and a contract is a contract, Pay pay pay, and when there’s nothing left they will fight over the scraps because… contracts, that why, they need to for there success, if not evil or anything, Epic wouldn’t sit around the table trying to screw every one (don’t Bit the hand that feed you), they do it for there success, everyone needs to do, Dog eat Dog LOL, wether you can find a way to pay Epic 4% instead if 5%, that is your diligence, that 1% might be what you need to succussed , or you can be “greedy” and make 1% for yourself, either way,

There’s a difference between people trying to take advantage of you and you owing money in return for using the product that you also agree to the terms to be able to use. The license terms for UE4 are very reasonable, you can make $12,000 a year without paying them anything, and beyond that it’s 5% which is almost nothing, whatever you make on a product the royalty percentage is not going to prevent your success.

yeah, it doesn’t have to be epic, not saying that it is unfair at all, but that 5% is 5% of your revenue, and 12,000 a year in revenue is nothing, you sell a game of $1 then that’s only 12,000 copy’s, one would hope that you would sell more then that, that 5% also is used as a deduction so you can pay less Tax if you make lots of money that is, not always a Bad thing, it works a long as you are making money, but if things go south it can bring you unstuck, I guess if anything people should get sound advise and plan plan plan, make shore the numbers stack up before investing in anything, then they should have nothing to worry about it, but I still say do your diligence with every contact you enter into,

I am still a bit confused about basing it on gross revenue as there might be situations where you are not able to get exact info from retailers about their revenue on your game and laws in many countries forbid you to dictate the price they sell at.

Let’s say I sell for 10k hard copies to an agent who sells them to 3 different retailers, who all set their own prices and have their own periods with offers and special prices.
Unless I somehow force all levels in the chain to report back every sale I have no chance of knowing the gross revenue.

If the agents takes their cut and the retailers theirs and every sale is reported back to me, I can imagine situations where 5% of the gross revenue will be the same as 200% of my own revenue, thus forcing me to pay more than I earn.

I might have misunderstood something, as hard copies are obviously happily sold in stores.
Maybe selling hard copies through agents and retailers is different form selling through the online shops for download?

Please enlighten me :slight_smile:

If you somehow end up getting only 2.5% of the revenue, you’ve entered one hell of a deal.

You have an agent? A hard copy of your game? If you get that far. You must have a blockbuster.
In no case. Should you ever pay more than you earn. Unless you hire an “Agent”, or publisher, and pay them up front, or get sued for making a copy of mario. If you sell one copy for $10. Epic gets 5% 50 cents. more than deserving. This would come before anything including costs, taxes, licensing fees, fraud, lawsuit settlement, or “Agent” costs.
If your game explodes to that much hype. I’m sure Epic would love to share some details about how they got paragon on disk at the local store. Just grab your agent, and head to there headquarters.
Worst case scenario. Game devs worst nightmare. Everyone asks for a refund because the game is ****. Please see.

I imagine Epic takes the 5% cut there in that situation.

You really think they don’t deserve 5% for the millions of man hours poured into the engine that makes your game possible?

What’s undeserved is steam taking 30% for basically nothing except hosting.