Epic relaxes indie royalty rates for Unreal Development Kit projects

No fees required until Unreal engine games pass $50,000 in revenue

Epic Games has altered the royalty system for use of its Unreal Engine, apparently intending to make rates easier on small developers.

Where previously developers using the 'free' version of the Unreal Development Kit (UDK) were required to pay Epic 25 per cent of net revenues once their game achieved $5000 in sales, the threshold has now been raised to $50,000.

The new deal will likely prove particularly useful to developers of iOS and other mobile titles.

Commented Epic VP Mark Rein on the firm's forums, "We realize that a lot of you are just started in the business so not having to pay royalties on your first $50,000 should help you get a financial footing toward building a quality game development business."

Non-commercial use of UDK is completely free, but as well as the 25 per cent cut for revenues above $50,000, Epic requires a $99 up-front fee if a project is to be offered for sale.

More details on the license are available here.

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Latest comments (25)

Jordan Woodward Level Designer, Codemasters Birmingham5 years ago
Pretty awesome news, that's a massive increase. Unreal is a very powerful engine and great for indie devs.

Edited 1 times. Last edit by Jordan Woodward on 23rd February 2011 10:26am

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Stefan Janke Gamedesign 5 years ago
Nice, for the start in this business. thx
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This will help everyone get a nice footing in the indie dev scene, whilst future enshrining Epics foothold in the engine market
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Show all comments (25)
Bob Chambers Studying Computer Games Technology, University of the West of Scotland5 years ago
That is an insane increase. Do UDK games tend to bring in >$50,000 in sales?
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Tris Browne Owner/marketing Director, AdWagon Co5 years ago
Exactly, they're strengthening their position in the engine market. Only makes sense. A great move though, might now consider it for our game.
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Nick Gunn 3D Artist 5 years ago
Fantastic news! Great that they're really helping the smaller developers and therefore the industry as a whole.
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Paul Taylor Joint Managing Director, Mode 7 Games5 years ago
Even with this increased allowance, 25% of ALL revenues from a title is still a gigantic amount for a small developer to hand over - it would certainly prevent us from ever considering using this. It discourages creative risk-taking which is what small studios are generally placed better to do.
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James Prendergast Research Chemist 5 years ago
Bob Chambers - Doubtful.... but then do Epic want everyone in the lead-up to industry becoming familiar with their product and framework? Or do they want that spread across multiple competing products?

It's a smart move.
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Holy fuc**** s***!!!
I'm glad this announcement came today.
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Mike Gamble European Territory Manager, Epic Games5 years ago
@Paul Taylor, remember that is 25% of gross developer revenue, that is the amount after the cut taken by the "publisher" be that Steam or whatever. Also bear in mind that on the first $50k you pay no royalty so say you recieve $70k revenue only $20k of that will attract the 25% royalty some $5k you keep $65k!

Edited 1 times. Last edit by Mike Gamble on 23rd February 2011 3:03pm

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Joe Schultz Director, ByDesign Games5 years ago
Not to be contentious, but seems more likely Epic is responding to the huge surge in popularity of Unity3D ( Also look at the timing of their entry into iOS support & the timing of release of UDK free, compared to Unity's announcements.

To say, Unreal had their chance to democratize development, but instead were more comfortable maintaining their high dollar per seat position & draconian license schemes and something better (for many users) came along.

So Unity saw the light and did some things better. That Epic should need to play catch up, well it's the natural way isn't it? :)

In short, Epic made Unity possible, and now that Unity is kicking butt all over the place, Unreal guys are playing catch up to the business model.

True that Unity doesn't (yet) have all the features of UDK (so it's a little apples-to-oranges), but it's fast gaining hold; in a short time, Unity already has the best workflow in the business, built-in Umbra occlusion, Beast light-mapping, asset store, cross platform development & deployment, iOS, Android, Wii, PS3 & XBox 360 support, option to buy engine source, an awesome community, and all with no per-sale royalty fees. Basically, you create it, you own it.

Just funny that few seem to understand (or want to understand) that Epic is playing follow the leader here...

(I don't work for Unity3D, am just a happy user, one who has used UDK in the past)

Edited 2 times. Last edit by Joe Schultz on 23rd February 2011 3:25pm

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Arguably it's more "race to the bottom" than "follow the leader". Which frankly suits me fine, as long as it doesn't end with every decent middleware developer going bust.
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g Game Designer 5 years ago
smart move. Now that everyone in the AAA PC and console game biz knows the Unreal engine they want to open more and more to the small indie developer. It may seem that they want to compete with Unity and similar engines that focus on little games for portable devices but i don't think that's the case. The real investment in making accessible the UDK is that over the time they are making the Unreal Engine more valuable for potential big developers + indie developers will help them showcase what the engine is capable of.
It's sort of the next evolution in the mod community.
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Richard Flanagan Game Design 5 years ago
@Joe Schultz

That's exactly what went through my mind as well. I do like working in Unity, but there are aspects of UDK that I've always found appealing, but the down-the-road costs were just to intimidating - this definitely levels the playing field a bit (in a race where Unity was way ahead).
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Richard Flanagan Game Design 5 years ago
@Guido Franco

Good point too. I remember discussing with an Adobe rep their lax policies towards student/academic licensing - and their response is similar; get as many people using their software from the beginning (learning stages). With an entire amateur collective trained on their software, any larger studio would be nuts to try and force new tools... UDK is no different.
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James Johnstone5 years ago
Nice, im just learning UDK now, its so user friendly, justs need someone to give me some static meshes for my level as i cant model or rig yet -.-
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Thiago Attianesi Creative Director, Fan Studios5 years ago
Good News.
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Andrew Jakobs Lead Programmer 5 years ago
@Paul Taylor: If you think 25% of the net revenue after the first $60.000 and once $2500 after you reach $50.000 is much then you propably never spend any money on developing a rock-solid multiplatform game-engine, that'll cost you a lot more.. And there are always other license types (which mostly are even more expensive).. Remember that the UnrealEngine(3) is a very proven engine on multiple platforms with a lot of support and a lot of people already know how to work with it (which also means lesser costs of having to educate your crew)..
Especially as a startup I would be clapping my hands if I would even reach the $50.000..
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BigWorld Indie is available at for online PC & browser games, and charges a 10% royalty. Mostly for MMOs/massively online titles. Server-only support for consoles & iOS though.
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Matt Hackett Game Developer, Lost Decade Games5 years ago
> The new deal will likely prove particularly useful to developers of iOS and other mobile titles.

Notice that's it's 25% of all *revenue*, not profit. So say you release a game on iOS: Apple takes 30% and Epic takes 25%, suddenly an indie isn't even getting paid half. Ouch.
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Jeffrey Kesselman CTO, Nphos5 years ago
Unity is great... Until you want to do something other then what they decided you should do with their engine. Then the gratuitous sealing they did of their API classes and the lack of source code stops you dead in the water.

This removes it from the consideration of experienced professional game developers.
As for big world... I'm still waiting for any of the big name customers they have trumpeted over the years... Bioware.. Microsoft and such to ship... Which they won't since they all dropped the engine.

Edited 2 times. Last edit by Jeffrey Kesselman on 24th February 2011 2:24am

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Jamie Watson Studying Bachelor of Games & Interactive Entertainment, Queensland University of Technology5 years ago
this is pretty good but is the UDK still in beta? or is it been offically realeased yet?

i wonder if you can devlop a game in unity and transfer in into the UDK..

great news!
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Aravindh Subramanian Lead Technical Artist, SUMO Digital5 years ago
This is great news!!
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Peter Law Freelance Game Designer and Unity Developer, Enigma 235 years ago
@Jamie a quick look on the UDK site shows it's still in beta, last beta release was Feb 2011
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Jason Bolt5 years ago
Jeffery Kesselman: What do you mean, BioWare dropped the engine? They are still using UE3 for Mass Effect 3. Edit: Are you talking about another engine? To my knowledge BioWare never used BigWorld, they use UE3 for the Mass Effect series and their own proprietary engine for their other games.

Edited 1 times. Last edit by Jason Bolt on 3rd March 2011 8:09am

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