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I want to know about that 5% royalties that Epic charges for the Unreal Engine if I sell games above $3000.

What about if my game just made $300? Do I still need to pay 5% royalties to them? And how many times should I pay? For example, I made a game that was sold for above $3000 so I paid 5% royalties but do I still need to pay it again for the same game?

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  • \$\begingroup\$ Your questions about "why people are upset" and "the average amount" are subjective and not on-topic here, so I've removed them in order to clarify the first part of your question. \$\endgroup\$ – Josh Jul 29 '15 at 15:38
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The EULA states that you need to pay Epic 5% of the gross revenue attributable to your game. However you are exempt from this for the first $3,000.00 in gross revenue for each game per calendar quarter.

Note that gross revenue is not your profit. It is the amount of money generated by your game; if, for example, you sell your game on the iOS app store for $0.99, and you sell 4000 copies, that is a gross revenue of $3960.00 even though you actually see less than that due to Apple's cut. Epic's example is as follows:

The royalty is based on gross revenue from end users, regardless of whether you sell your Product to end users directly, self-publish via the App Store or any similar store, or work with a publisher. The following simplified example illustrates the application of the royalty to gross sales: if your Product earns $10 on the App Store, Apple may pay you $7 (having deducted 30% as a distribution fee), but your royalty to Epic would still be 5% of $10 (or $0.50).

As to your specific questions:

What about if my game just made $300? Do I still need to pay 5% royalties to them?

No. If your game has a gross revenue of $300 total, or $300 per quarter, you do not owe any royalties to Epic.

And how many times should I pay? For example, I made a game that was sold for above $3000 so I paid 5% royalties but do I still need to pay it again for the same game?

If your game has a gross revenue of $3001 in one quarter, you have to pay Epic 5% of the $1. If your game has a gross revenue of $0 the next quarter, you don't owe Epic anything for that quarter. The royalties are all based around a quarterly model.

You have to consider each game separately, not in total. If you have two games that move $3000 in a quarter, you don't owe any royalties. If you have two games that move $3001 in a quarter, you owe 5% of the extra $1 twice (one for each game).

It is also important to note that Epic considers in-app purchase revenue and ad revenue part of the gross revenue for royalty-computation purposes, so it's not only the initial sales of your game that factor in.

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  • \$\begingroup\$ thank you for reply and from what have you said it is clear I don't need to care about this royalties for some times because now iam still begineer and didn't sold any games yet and also iam single person developer so my game don't make 3000$ anyway . as one person told me it is not so easy to make larger amount for begineer , they usually make 100$ per year . and do I need to create another thread for that tw questions you removed? \$\endgroup\$ – nirmal Jul 29 '15 at 16:26
  • \$\begingroup\$ No, they wouldn't be appropriate here. You could ask them at a forum like GDNet though. \$\endgroup\$ – Josh Jul 29 '15 at 16:32
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The First $3000 is for only the developers, that is why it is free of royalty. But distribution fee or "Steam" royalty is not allowed in calculating Gross (Net) Product Sales Revenue. Here is an example of calculating gross revenue for a quarter of a year (the first quarter of the first year in sales life) given in the picture from this "Form" for tracking royalty dues.

Form Link: http://help.epicgames.com/customer/en/portal/articles/2313883-how-do-i-submit-a-royalty-report-for-my-ue4-project-?b_id=9727

It is only $50 due for the first quarter if "Gross revenue is $4000" thus "$4000 less $3000" or $1000 is the "Current Quarter Less $3000 (which is the allowed deduction per game)". More pictures to help you calculate.

enter image description here (Click on the image for larger view)

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