Stephen Brenish
Revenue share disputes are one of the most common, and most avoidable, causes of studio conflict. Getting clear on who gets what before a game ships, in writing, with math that everyone has seen and agreed to, is one of the most impactful things a producer can do for team health and long-term business sustainability.
This calculator walks you through the full waterfall: platform fees first, then publisher or investor recoupment, then team splits. It won’t replace a lawyer, but it will give you a starting point for conversations.
How the Revenue Waterfall Works
| Platform | Standard Cut | Notes |
|---|---|---|
| Steam | 30% | Drops to 25% above $10M, 20% above $50M |
| Epic Games Store | 12% | Intentionally undercuts Steam |
| PlayStation | 30% | Console standard |
| Xbox | 30% | Console standard |
| Nintendo Switch | 30% | Console standard |
| App Store | 30% | Drops to 15% for subscriptions and developers under $1M annually |
| Google Play | 30% | Drops to 15% for subscriptions and developers under $1M annually |
Game revenue flows through several deductions before it reaches developers. Understanding each layer matters when you’re negotiating deals.
Step 1: Platform fee. Every distribution platform takes a cut off the top. Steam’s standard rate is 30% (dropping to 25% above $10M, 20% above $50M, but most indie games never see those tiers). Epic Games Store charges 12%, which was intentionally set to undercut Steam. Console platforms like PlayStation, Xbox, and Nintendo Switch all charge 30%. Mobile is the same: 30% on the App Store and Google Play, though that drops to 15% for subscriptions and developers under $1M annually. Whatever platform you’re on, this cut comes out first, before anything else.
Step 2: Publisher recoupment. If you have a publisher, their deal almost certainly includes a recoupment clause. The publisher recoups their investment (marketing costs, development advances, sometimes overhead) before the revenue share kicks in. This isn’t a fee. It’s them recovering what they spent. The real negotiation point is what counts toward recoupment. Advances paid to you should count. Marketing spend the publisher controls often counts. Sometimes they’ll try to throw in overhead, interest, or unrelated costs. Push back on those.
Step 3: Publisher royalty split. Once recoupment is done, the remaining revenue splits between you and the publisher at your agreed rate. A typical mid-tier publisher deal is 50/50 post-recoupment. Better-negotiated deals can be 70/30 or even 80/20 in the developer’s favor, especially if you’re bringing a strong IP or proven sales history to the table.
Step 4: Team split. Whatever’s left after platform and publisher gets distributed among your development team per their agreed shares.
Structuring the Team Split
The team split is where most internal studio disputes start. A few principles that experienced producers lean on:
Fix percentages in writing before revenue exists. Verbal agreements made during development become contested once there’s real money. A simple shared document signed by everyone involved is better than nothing. A properly drafted legal agreement is better still.
Account for the person who holds the Steam keys and bank account. Someone has to be the legal entity that receives payment from Valve. That person carries legal and tax obligations that pure revenue share doesn’t compensate for. Consider a small admin allocation (3-5%) off the top for the studio entity before the personal splits happen.
Differentiate contribution over time. A co-founder who worked full-time for three years and a contractor who did two weeks of music shouldn’t split 50/50. Revenue share should reflect total contribution, not just the fact of showing up. Use a time-weighted or role-weighted system that everyone understands going in.
Handle vesting for long projects. On projects longer than 12 months, consider a vesting schedule for equity or revenue share. Participants who leave early receive a prorated share of their eventual allocation. This protects contributors who finish the game from being diluted by people who left.
Publisher Deal Red Flags
The most common traps in publisher agreements that affect the revenue waterfall:
- Uncapped recoupment: Some contracts allow the publisher to count expenses that were never agreed upfront. Always cap recoupable expenses and define what qualifies.
- Recoupment from gross, not net: Recoupment should be calculated from net revenue (after platform fees), not from gross. Recouping from gross means the publisher is recovering from money that was never yours.
- Marketing fund recoupment: Be especially careful about publishers recouping marketing spend that you had no say over. You can end up in a situation where a publisher spends $500k on ads for your game, you sell $400k worth of copies, and you owe them money.
- IP ownership: The revenue share structure doesn’t matter if you don’t own your IP. Make sure the contract specifies that IP stays with the developer, regardless of deal outcome.
For any publishing deal above $50,000 in advances, hiring an entertainment lawyer to review the contract is almost always worth it. The fees are typically $1,500-4,000 for a contract review. That’s cheap insurance on a deal that could define your studio’s next several years.
