Following is an email I received on 12/21/2008:
When music is commissioned for a video game, how much does the composer/recorder usually receive for a major game? I know that it could vary hugely but lets say it was about 15 minutes of content (roughly 3 average length songs I guess) and the game was from one of the major publishers like EA or Ubisoft.
If you could give me some ranges that would be great!
This question is impossible to answer because you are correct -- it varies "hugely." Besides that, the deals are usually under an agreement that the terms will not be disclosed. The amounts vary greatly depending upon how much the game company wants a particular composer/recording artist, too. It's "what the market will bear" on the part of the music provider and it's "as little as we can get by with" on the part of the music licensor/purchaser. While some game companies like the idea of paying per minute of music, others will want music that fits the game, and the longer each piece the better. These others will want to pay "per song."
I wish I could give a better answer.