EXCLUSIVE, UPDATE with SAG-AFTRA statement: An actors strike against the video game industry could come down to a dispute over single word — “buyout.”

Negotiations between SAG-AFTRA and the video game companies broke off late Wednesday night after the union rejected the companies’ final offer for a new contract. A federal mediator who’d been brought into the talks yesterday failed to bring the two sides close enough to make a deal. The main sticking point is residuals.

SAG-AFTRA’s board of directors voted unanimously Sunday to strike the video game companies if a deal isn’t reached by tonight at midnight PT. It said today after word came that talks had broken off that the companies’ latest proposal represents a “freeloader model of compensation” that the unions says “cannot and should not continue.” (Read the union’s full statement below.)

The union has demand that performers receive an additional full-scale payment for each 500,000 units sold, up to a maximum of four secondary payments if the game sells 2 million units.

The companies have steadfastly refused to include residuals as part of any compensation package, saying it would upend the industry’s business model. So in lieu of residuals, the companies have offered “additional compensation” on top of a performer’s regular pay depending on how many sessions were worked on each game, maxing out at $950 after eight session.

The union countered with a nearly identical proposal that also maxed out at $950 in additional pay after eight session, but instead of calling it “additional compensation,” it called it a “residuals buyout.” By calling it that, the union could make good on its promise to get residuals for video game performers for the first time ever.

The companies, however, refused to call it that, saying it would be unfair to offer a buyout of something that isn’t offered to the hundreds of animators and programmers who develop the games.

“It would be unfortunate for SAG-AFTRA to take its members out on strike over terminology and not money,” said Scott Witlin, the companies’ chief negotiator.

It would be equally unfortunate for the companies to force a strike over a single word.

“We had hoped this would be successful,” Witlin said, “but union leadership left mediation without providing a counteroffer. We urged union leaders to put the package to a vote of their membership, but union leaders refused.”

Here is SAG’s full statement today:

“This group of video game employers knowingly feeds off other industries that pay these same performers fairly to make a living. This represents a ‘freeloader model of compensation’ that we believe cannot and should not continue.

“In this industry, which frequently uses performers and understands the intermittent and unpredictable nature of this type of work, fair compensation includes secondary payments when games hit a certain level of success with consumers, not simply higher upfront wages. Secondary compensation is what allows professional performers to feed their families in between jobs.

“No matter what these companies are peddling in their press releases, this negotiation is not only about upfront compensation. It is about fairness and the ability of middle-class performers to survive in this industry. These companies are immensely profitable, and successful games — which are the only games this dispute is about – drive that profit.

“We have proposed a fair payment structure that enables the sustainability of a professional performer community. These employers have unreasonably refused that. The time has come to end the freeloader model of compensation and that is why our members are united behind this cause.”