Unity 5, Unreal 4, and Source 2: A Small Developer's Reaction

The announcements from the major game engine makers this week have been exciting to say the least. The new offers from Unity and Unreal, as well as the promise of Source 2, make it cheaper and easier than ever to dive straight into the world’s most prominent engines, but what does that mean for smaller developers?

From a business perspective, I don’t feel like much has changed - yet.

Abyssal Arts is currently using Unity 5 on both of our main projects, and there are no apparent benefits to switching with how far along we are. Unity 5 is great; it offers ease of use, support for a fantastic number of platforms, and we are used to it.

As a startup company with less than $100k in revenue (for now!), the biggest change for us is the introduction of the free “Personal Edition” with all of the Pro features enabled. With this, we can start testing on devices that would have previously required multiple Pro licenses for the features we are using and saves us several thousand dollars up-front. For us, and for the other small developers I’ve talked to, this is hugely beneficial.

For Unreal, I wonder how much of a change this really constitutes. Dropping the cost of the subscription will certainly increase their user base, but the 5% royalty stops me from being terribly enthusiastic. The percentage gave me pause even while the $19/seat fee was still in place. The royalty is perfectly justifiable - it’s a fantastic engine and the quality, efficiency, and visual power it provides will certainly be of immense value to any team that uses it, to which I can attest, working with a couple of teams that used it.

However, if an example studio of several people were going to build a game with stylized (but not fancy) graphics and hoped to earn $500,000 in revenue, the back-of-the-envelope math for the royalty may work out to something like:

$500,000 x 0.05 = $25,000

And that’s before the platform takes its cut; another third off takes the total down to $310,000 or so. If the $25,000 could have been used to pay someone’s salary, the engine costs may not be worth it.

The long-tail costs of Unreal could also potentially sting; if the game becomes a hit and suddenly does $5 million in revenue, that’s $250,000 instead of $25,000, whereas Unity would be a flat license fee. Chances are a small developer won’t be able to negotiate a non-royalty deal with Epic like a large publisher could, either. Even at $100,000 in revenue, the threshold at which Unity requires a license, unless the developer needs 4 Pro licenses, Unity is still more affordable than Unreal.

The opportunity cost of choosing Unreal 4 over Unity 5 in this case may not make sense in most cases for this fictional developer. There are also the two competing asset stores to consider as well (which will certainly evolve now that Unreal is free to download). If the developer could achieve the same revenue with Unity 5, holding development costs equal, Unity 5 comes out on top from a cost perspective.

But what about Source 2? It will apparently be completely free - no license, no royalty. I’m very excited about a free engine that focuses on enabling creators to build content for the games they love. Will Valve be taking a cut like in a similar fashion to an asset store/Team Fortress 2 items? Will it work exclusively with Steam, driving revenue growth for Valve by having more content for sale? With no other solid details to go on, anything at this point is speculation.

The one concern I have regarding Source 2, as eager as I am to see it, is Valve Time. A small developer, generally, cannot survive on Valve Time. Critical updates, new features, bug fixes - I believe that Valve knows what they’re doing and will do their best to service the engine, but at this point, it would be silly to commit any upcoming projects to using Source 2 because we have no idea when it’s coming out. If we knew it was similar enough to Source where one could start development there and port it, maybe it would be possible, but again: Valve Time.

With the likes of Unity and Unreal available now, only those who have access to Source 2 prior to its launch will know what it can do and what it will be like to use. Developers will early access will also be the only ones with experience working with Valve’s engineers until it becomes generally available (in my limited experience, their engineers really solid). I wish we were one of the lucky ones because I am extremely excited about the potential of user generated content, but until it is released, it’s nothing more than a nice idea.

It is a nice one, though: imagine an engine integrated into Steam that handles version control for you and your team - no more GIT troubles, no more wrangling .meta files, just everything integrated into a wonderful, easy-to-use, steel-grey interface. One can dream.

[Reblogged from the Abyssal Arts website. Feel free to get in touch with questions/comments over Twitter @Shibusuke. It would make my day! ;)]