The royalties thing always seemed like a dead end, because residuals aren't worth that much in gaming. I've taken royalties as payment for dev work, and as a function of how they work, the more people on the project, the more of the royalty pie you are splitting. The royalty money was so low I just walk if a royalty setup is brought up for anything involving more than like.. 4 people, because upfront pay is literally worth thousands of dollars more.
They were probably looking at like what, low 3-4 digit payouts on most projects outside of two game releases in a generation? Games have much shorter production and sales tails than media, just due to the nature of how they work. A movie can be easily replayed to audiences over and over again. A game requires matching and working hardware, which has like, 5-6 year windows at best on average. There's a reason the only money in royalties in gaming are if you are making engines, because they're more or less a near aggregate of all the competitor sales combined.