Question about royalties

[Riddlewire]

I know that the each console manufacturer receives royalties on each title sold from other publishers. Microsoft collects the total royalty fee, as they purchase all the hardware up front. Nintendo has a deal with ATI to share royalty fees, although I don't know the ratio. However, I know nothing about how Sony's royalty fees work. Can someone clue me in? And, since the PS3 appears to be such a large collaboration, will there be a shared royalty system for it? Or is Sony fully funding the R&D as well as the total cost of the hardware, and keeping the royalties for themselves?
I realize some of this may not be decided yet, but any information would be appreciated.

 

[ERP]

The royalties are collected from publishers when they order units, not when they sell them. So the console manufacturers get a royalty on every unit software manufactured, reguardless of whether they sit on store shelves or get dumped in the desert.

I very much doubt Sony shares it's royalties with anytone and I doubt that they will going forwards. It's too lucrative, for them not to buy out the rights to whatever technology they license upfront.

 

[London Geezer]

Another question, is it REALLY true that Sony gets a (tiny) percentage out of every DVD (and CD?) sold because they partly invented the format?

 

[Dave Baumann]

Another question, is it REALLY true that Sony gets a (tiny) percentage out of every DVD (and CD?) sold because they partly invented the format?

I might be wrong about this, but IIRC, Sony was backing the DIVX format rather than the DVD format. DVD came about through a consortium of different manufacturers.

[Edit] - Ugh. Good god. There's different groups expecting royalties:

EE-Times[/url]]The DVD6C licensing group, composed of Hitachi, Matsushita, Mitsubishi, Toshiba, JVC and AOL Time Warner, earlier this month laid out a plan to woo domestic Chinese manufacturers to the group's royalty scheme of up to $4 per unit. The 6C group offered royalty-free sales through Dec. 31 of this year to units built for the domestic Chinese market. The waiver is available only to manufacturers that sign a license before June 30. There is still no word on whether Chinese manufacturers will buy into the plan.

Get in line

Separately, the so-called 3C group — consisting of Philips, Sony and Pioneer — is also demanding that Chinese manufacturers begin paying royalties on DVD players. Any party that makes, uses, imports or sells products covered by the licensed patents is expected to contact both the 6C and 3C groups and pay them separate fees. Furthermore, because the DVD format uses the MPEG-2 video standard, another separate royalty must be paid to MPEG LA, the MPEG licensing authority.

Anyway, back on the topic a little. I've read somewhere that ATI recieves about $3 per Flipperchip produced and $0.60 per game copy sold.

 

[Riddlewire]

So nobody knows what kind of royalty system Sony uses for the PS2 (or the future PS3)? Don't we have some Playstation coders on the boards who might know?

 

[Sonic]

Sony doesn't really need to have royalties on its hardware. It manufactures all the chips as far as I know. Maybe Toshiba gets a cut for every Emotion Engine manufactured, but that's probably it. As for PS3, we'll learn all that stuff when the time comes for it. Whether IBM will have a big part other than the development of CELL has yet to be seen. IBM may charge Sony licensing costs for CELL but I'm not sure how that all goes out since Sony is helping out the development of it.

 

[passerby]

IBM may charge Sony licensing costs for CELL but I'm not sure how that all goes out since Sony is helping out the development of it.

Since IBM, Toshiba and Sony collaborated, it will be quite amusing if Sony has to pay IBM and Toshiba royalties for each CELL chip, and IBM has to pay Sony and Toshiba royalties for their own CELL product.

I think the most probable situation is that they do not need to pay each other for licensing(stupid statement, huh?).

 

[YeuEmMaiMai]

Dave,

Is that what they are paid for each chip or is that in addition to what they charge nintendo for each chip?

$3/chip seems pretty low if you ask me

 

[Qroach]

THat would be what they are paid for each chip. After all, ATI didn't fab the chips for Nintendo.