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What do normal royalties look like?
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<blockquote data-quote="Gadget" data-source="post: 8894445" data-attributes="member: 23716"><p>I'm not an industry insider nor one who deals with royalties in real life, but here are a few observations:</p><p></p><ul> <li data-xf-list-type="ul">The OGL 1.1. Royalties are based off of total revenue, not 'profit.' This may make WOTC seem more greedy and evil (which they may well be), but this is actually good business practice. In the past, movie stars have been able to negotiate salary based on the movies' total revenue or profit. It was quickly found out that movie studios could become "creative" with costs and profit to make almost any movie show next to no "profit." The one example I have heard is the guy who played Darth Vader (the guy in the suit, not James Earl Jones) got a % of profit deal for Return of the Jedi and never really saw anything from it due accounting shenanigans. I'm not 100% sure if that is true, but it is illustrative how things can go in the business world, even if that is a different industry.</li> <li data-xf-list-type="ul">As I understand it (I could be wrong) it is only % of revenue <em>after</em> 750K, not total revenue, which makes it sting a bit less.</li> <li data-xf-list-type="ul">If this is still a high royalty fee (and it seems it is) it may be designed to to either: a) keep "big" products down, or b) encourage negotiating a separate license deal with WOTC directly on a case by case basis.</li> </ul></blockquote><p></p>
[QUOTE="Gadget, post: 8894445, member: 23716"] I'm not an industry insider nor one who deals with royalties in real life, but here are a few observations: [LIST] [*]The OGL 1.1. Royalties are based off of total revenue, not 'profit.' This may make WOTC seem more greedy and evil (which they may well be), but this is actually good business practice. In the past, movie stars have been able to negotiate salary based on the movies' total revenue or profit. It was quickly found out that movie studios could become "creative" with costs and profit to make almost any movie show next to no "profit." The one example I have heard is the guy who played Darth Vader (the guy in the suit, not James Earl Jones) got a % of profit deal for Return of the Jedi and never really saw anything from it due accounting shenanigans. I'm not 100% sure if that is true, but it is illustrative how things can go in the business world, even if that is a different industry. [*]As I understand it (I could be wrong) it is only % of revenue [I]after[/I] 750K, not total revenue, which makes it sting a bit less. [*]If this is still a high royalty fee (and it seems it is) it may be designed to to either: a) keep "big" products down, or b) encourage negotiating a separate license deal with WOTC directly on a case by case basis. [/LIST] [/QUOTE]
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