Schags
Bronze Knight of the Realm
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I've worked at five studios so far over 16 years and two of them I've gotten royalties off of sales, two I was working on projects that hadn't shipped yet but I did get a yearly bonus. It varies from company to company. Bonuses/royalties are used for retention probably like any other company out there that gives bonuses. Taxes on bonuses always seem like 45-50% but I might just be hating on the IRS. It's taxed enough to look at it and make you say wtf.Is this standard practice among AAA creators? Small dev shops too? Was this a thing of the past or is it still the working business model? If what you're saying is true, what is the reasoning? It's like a hybrid attempt of giving equity in a startup, but the value of startups grow, so you get smaller shares of a bigger pie - but with this model when you have a project that may cost 100 million with dev+marketing, so they give royalties to incentivize down the road? Is there a vesting schedule? Is there a threshold that box sales have to reach before you start earning your royalty? What would a royalty payout structure look like? 1% for the CEO, .01% for a junior developer? I can't believe this would be standard practice.
Also how would this be taxed, just like a yearly bonus? Do developers get yearly bonuses ontop of the royalty as well?
I don't know if that model is still setup at SOE, I left in 2006. I'm not exactly sure how the royalties were divided up being just an associate designer but I'm sure it was a trickle down effect considering some departments outside of development didn't qualify for it even though they technically worked on the project. What ever trickled down to me wasn't a huge amount and it was definitely based off sales because it was different every time. I would assume it was a small % of the sales divided up into a pool which was further divided up by your pay grade, those details never were explained to me.
FWIW, I've worked with developers that have told me they have never received a bonus before. So there really is no standard and it depends on the studio you work for.