Are You Leaving Money on the Table? 5 Backend Royalties for Game Composers

Are You Leaving Money on the Table? 5 Backend Royalties for Game Composers

You’ve done it. You landed the gig. Your musici s going to be the backdrop for a massive new video game. You're imagining millions of players hearing your themes. Your soundtrack will climb the charts; a career of creative and financial success.

Then, you get the contract.

It’s full of terms like "buy-out," "in perpetuity," and the most dreaded phrase of all: "work-for-hire."

In an instance, the dream of earning long-term, passive income from your music seems to vanish. The truth is, the video game industry’s financial model is different from that of film or television. In most media, a composer receives backend performance royalties for every broadcast/stream. The standard video game contract is a one-time fee in exchange for all your rights. Forever.

This is the "work-for-hire" trap, and it's where most composers' financial journey ends. But for the most successful, in-demand composers in the industry, it's the beginning.

The six-figure game music composer salary isn't a single, massive fee. It's a portfolio of revenue streams. Successful composers have mastered the art of negotiating for the secondary rights. Secondary rights are payments earned from a work's use after its initial release. This includes sync for commercials, public performances, and resales.

You are leaving money on the table if you are only negotiation a creative fee. Secondary rights is "forgotten" money.

Today, we’re opening the vault. Here five “forgotten” backend royalties that professional video game composers always negotiate for.


1. The Standalone Soundtrack Sale Royalty

This is, by far, the most significant and forgotten revenue stream. Composers are often so focused on the in-game music that they forget about the soundtrack. The soundtrack is a commercial product.

The "Forgotten" Part: A composer signs a work-for-hire agreement, delivers the music, and accepts the fee. The game becomes a hit. The developer decides to release the Official Game Soundtrack on streaming services.l. The soundtrack album generates millions of streams and sells tens of thousands of units. The composer, who created the product, sees none of this. Why? Because the WFH contract stated the studio owns the master recordings and the compositions for all purposes.

How to Collect This "Royalty": In your initial contract, you must carve out the soundtrack as a separate item. The video game soundtrack revenue is separate from the creative fee for scoring the game.

The studio will almost always keep ownership of the master recordings. This is standard. Yet, you can negotiate for a royalty on net sales of the soundtrack album.

The Negotiation: This is a standard "ask" for any composer with a savvy agent. The conversation goes like this: "I understand the in-game music is a full buy-out. But, for the standalone commercial soundtrack, I'd like to be treated as the performing artist and receive a royalty."

  • The "Ask: Negotiate for a royalty rate of anywhere from 15% to 50% of the net receipts. This is from sales and streams the developer receives. A 50/50 split is very common for establish composers. It incentivizes you to promote the album to your own fanbase.
  • The Win-Win: This is an easy "give" for a developer. They are not in the record label business. By making you a partner in the soundtrack's success, they now have an enthusiastic advocate who will help market a secondary product that costs them nothing extra to create.

Don't let the soundtrack be an afterthought. For a hit game, the revenue from the album can eclipse your initial creative fee over time.

2. Performance Royalties from Marketing (Trailers & TV)

This is the most complex and misunderstood, royalty in the entire video game industry. It's the one area where video game performance royalties are a real and significant factor.

The "Forgotten" Part: There is a pervasive myth: "Video games don't generate performance royalties." This is "technically" true. Playing a game is not considered a "public performance" or "broadcast,". PROs like ASCAP, BMI, and SESAC do not collect royalties from game sales or in-game plays. Composers hear this, shrug, and assume performance royalties are off the table.

They are dead wrong.

The game itself isn't a broadcast. the multi-million dollar marketing campaign for the game is.

  • Every time the trailer airs in a movie theater (a massive payout)
  • Every time the 30-second TV spot airs during the NFL playoffs
  • Every time a "making of" documentary is broadcast on a TV network
  • Every time the trailer plays on a monetized YouTube channel (that isn't the developer's own)

These are public performances that generate royalties.

How to Collect This "Royalty": This is the one royalty you are always entitled to, no matter what your WFH contract says. You can sign away your publishing, but you cannot sign away your "writer's share" of performance royalties. This is a fundamental right of your PRO membership.

The problem is that this money isn't collected. It’s forgotten because of a simple lack of follow-up.

  • The Action: You or your representative must get a copy of the cue sheet for the trailer and for every TV commercial spot. The trailer house or the ad agency files this. You must ensure your name is listed as the composer, along with your PRO information.
  • The Catch: If you signed a full WFH, the game studio is now the publisher and will receive the "publisher's share" of these royalties. But you, the composer, will still receive your full writer's share direct from your PRO.
  • The Payday: This is not a small amount. A major trailer campaign can generate tens of thousands of dollars in writer's performance royalties. This is "mailbox money" that most composers don't even know exists. It's not a video game royalty; it's a broadcast advertising royalty that uses your video game music.

3. Performance Royalties from Live Concerts

Live orchestral performances of game music have exploded into a massive global industry. "The Legend of Zelda: Symphony of the Goddesses," "Final Fantasy: Distant Worlds," and "Assassin's Creed Symphony" sell out concert halls around the world.

The "Forgotten" Part. Composers sign their WFH contract in the early stages of development. They never consider the possibility of their music performed in a concert hall five years later. They assume the buy-out fee covers this.

But like a TV broadcast, a live concert is a public performance.

How to Collect This "Royalty": The mechanism is the same as for marketing royalties: your PRO. Concert venues pay blanket license fees to ASCAP, BMI, and SESAC. When a symphony performs your music, that is a performance that generates a royalty. You earn your writer's share.

The Negotiation: This is less about a specific contract negotiation and more about retaining your identity. PRO rights are non-negotiable.

  • The Action: You must ensure that even in a WFH, you are always credited as the sole composer of the music. The studio may own the copyright, but you are the author.
  • The Payday: When these concert tours happen, the tour producers submit their setlists (which function like cue sheets) to the local PROs. As long as you're credited as the composer, you will receive your writer's share. For composers like Nobuo Uematsu or Koji Kondo, this represents a massive, ongoing, global revenue stream.

4. Secondary Licensing (Sync-to-Sync)

Your create music for the game. But what happens when the music is so good that other people want to license it?

The "Forgotten" Part: A TV producer is working on a show for Netflix and wants to use your "epic boss battle" track for a chase scene. A film studio's music supervisor wants to license your "main theme" for a movie.

This is a secondary sync license (a "sync-to-sync"). Under a standard WFH, the game studio owns the music 100%. They can license it to that Netflix show, collect a $30,000 sync fee, and you would never even know.

How to Collect This "Royalty": This is a high-level negotiation. It is not an ask for a first-time composer. It's a must for established professionals. You must negotiate a percentage of any future sync fees for uses "out-of-context" (i.e., outside of the game and its direct marketing).

The Negotiation:

  • The "Ask": "I understand the in-game use is a buy-out. But, for any third-party licenses for this music in unrelated media I'd like to receive a 50% split of the sync fee (both master and publishing)."
  • The Win-Win: This is another easy "give" for the studio. They have no intention of getting into the sync licensing business. By giving you a 50% stake, they've now incentivized you (or your agent) to go out and pitch that music for other syncs. This creates a brand new revenue stream that the studio gets 50% of for doing zero work.
  • The Precedent: This is a very common arrangement in the trailer music world, and it is slow to adoption in the game industry. You are not only a composer; you are a partner.

5. Sheet Music & Merchandise Royalties

This revenue stream feels "old school" and is so granular that it's almost always forgotten in a big-money contract negotiation. For a hit game, this is a massive mistake.

The "Forgotten" Part: The game is a phenomenon. The main theme is everywhere. The studio strikes a deal with a company like Hal Leonard to publish "The Art of the Game: Official Piano Selections." They press a limited-run collector's edition vinyl with a bonus 7" of your theme. They create a music box for the collector's edition that plays your melody.

Under a standard WFH, you get nothing.

How to Collect This "Royalty": This is a standard "ancillary products" or "merchandise" clause. Like the soundtrack, you must carve this out from the main WFH agreement.

The Negotiation:

  • The "Ask": "For any ancillary products that are primarily music-based, such as sheet music (print or digital) or physical music-only merchandise like vinyl, I'd like to receive a royalty."
  • The Rate: For print music, a standard royalty is 10-12% of the retail price. For merchandise, you might ask for 5-10% of net receipts.
  • The Win-Win: Again, the game studio is not in the sheet music business. This is a non-core revenue stream for them. Giving you a piece of the pie is a simple way to keep a key creative partner happy, and it costs them nothing to do so. For a game with a massive following, this "forgotten" royalty can generate a quiet, consistent, five-figure annual income for years.

 

Conclusion: You Are a Partner, Not Just a "Work-for-Hire"

The financial reality of the video game industry is clear: the work-for-hire video game composer is the default. The fee is, and will likely remain, the primary source of income.

But your career's long-term financial health is not determined by that fee. You determine your career by your ability to look beyond it.

A composer who only negotiates their fee is a vendor. A composer who negotiates their soundtrack royalty, confirms their trailer cue sheets, and carves out a split of secondary syncs is a creative partner.

The true video game composer royalties are not automatic. They are earned, not on the digital audio workstation, but at the negotiating table, months before a single note is written. Start remembering what everyone else forgets.

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