Epic Games is switching up its royalties scheme, and making it so game developers building projects with Unreal Engine won’t owe Epic a cent in royalties on a game’s first $1 million in gross revenue.
While only announced today alongside a handful of other exciting Unreal Engine developments, the change-up is being implemented retroactively all the way back to the beginning of 2020 as well.
This means that developers seeing revenue from a game built with Epic Games’ Unreal Engine won’t need to fork over a 5 percent cut to Epic for commercial use of Unreal, a fee that previously kicked in once a game had earned $3,000 in gross revenue.
(Small update! Epic Games' marketing manager Dana Cowley has since noted on Twitter that the new license plan is both for Unreal Engine 4 and, once it's out into the world, Unreal Engine 5. Developers that made royalty payments to Epic Games during 2020 that would no longer need to do so under the updated plan can expect to see money back from Epic as it is "proactively issuing refunds for Q1 2020 royalty payments to folks this applies to.")
With this, Epic Games is forgoing a potentially large pool of income it would’ve seen under the previous royalty model in exchange for making its tools more attractive to smaller game development teams. In a similar spirit, and alongside today's big Unreal Engine 5 announcement, Epic has also opened up access to its own cross-platform online game tools to the wider game development community.
"We also can really help build up the industry as a group of companies that cooperate together and collaborate together to reach users, as opposed to fighting each other to...this is the worst term that's ever been invented in the history of the internet, to 'own the customer,'" explains Epic CEO Tim Sweeney in a recent chat on all these new developments with Gamasutra.