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Royalties if game is rented to company that sells admission

If a small game development company creates games that they rent to a vr amusement company who sells admission to play the games, are royalties paid on the money made on the rental fee or the money made on admission fees? Or both?

If it turns out to be both, or the company that sells admission to the game, that company do not us the software and would not agree to pay 5% of their gross. Which would mean that the small development company would have to pay the 5% of the gross which would be far higher than the money made in rental fees. So the outcome would be that the developers would be forced to used a different game engine and Unreal would not make any money whatsoever.

As I read the Eula, the ( not hypothetical developers ) would have to pay 5% of the gross for all profits the game made, regardless of whether the it was the developers who made the profit or the vr amusement company.

Product Version: UE 4.15
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asked Apr 11 '17 at 03:18 AM in Legal & Licensing

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Dumiatis
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2 answers: sort voted first

You are generally correct that the licensee is responsible for paying a royalty on all revenue regardless of who collects it. But you can imagine if this weren't the case then a publisher could just hire a company to make a game for them, the publisher refuses to take a license, and then Epic would get no royalty from the game revenue regardless of how successful.

I think the answer to your question is both - the rental fees and the customer revenue is subject to the royalty. The only exception to this is whether the usage falls into the category of amusement park rides (which is royalty free). You use the word "amusement" so I'm not sure. But note that arcade is not royalty free.

An alternative solution may be to take a custom license with custom negotiated financial terms.

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answered Apr 11 '17 at 12:02 PM

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atypic STAFF
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Yes you must pay royalties on the revenue. As far as publishers go, it has to be in your publishing contract that 5% goes to epic.

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answered May 01 '17 at 12:45 AM

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Mobfolios
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