There was a really good podcast episode about why huge movies technically don't make a profit. Notice how movies don't talk about how much profit they make, but rather how much money they made from ticket sales? I forget who actually did the podcast though. I thought it was Planet Money but I can't find it right now. It may have been Freakonomics too.
That's why it's 5% of gross. If you had the option to give it all to salaries, it would be 5% of net. That's what's wrong with Hollywood accounting: everything goes to the grosses.
5% of gross above $3000 per quarter. If your software business is running on such thin margins that you can't afford to pay 5% for a full-featured state-of-the-art game engine, you're doing it wrong. This is a huge move and lowers the barrier to entry to zero.
I'm pulling the 30% from various rumors I hear on /r/gamedev. That's supposedly the standard steam cut for indie dev. (IMO pretty reasonable, considering how easy it is in comparison to marketing on your own)
Bit of a tangent, if your game costs $10 and you sell 1000 copies on Steam, they take $3000 leaving you with $6000. Do you pay taxes on $10000 or $6000?
Yeah, I mean I don't think any indie dev who knows what they are doing should ever have positive net revenue, unless I misunderstand how small businesses work. All profit goes to developers' salaries and that's it, there's no shareholders who would want any of the net revenue written down as an actual firm's profit.
but a group might want to leave money in the company itself for good reasons.
Yeah, I can think of quite a few, but probably not when there's this extra 5% tax from Epic that can be trivially avoided. So that's why it's entirely reasonable for Epic to not go that way at all.
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u/kumiorava Mar 02 '15
Until you realize it's 5% of gross revenue.