The TRUE COST of Unreal Engine 5

Is Unreal Engine 5 free? How much does it cost to use? In this video, I'll give you the answers to these questions. I'll tell you if UE5 is free and also if and when you'll be expected to pay.
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[@Mdogg2005]

Worth noting: this is on a per project basis. So if you're an indie team working on several games, each game has to hit the 1 million USD mark to have royalties kick in.

[@GameDevAcademy]

That's a really important distinction that I didn't find in the literature from Epic. Where did you find this?

[@Mdogg2005]

​@@GameDevAcademy From their FAQ page: "A 5% royalty is due only if you are distributing an off-the-shelf product that incorporates Unreal Engine code (such as a game) and the lifetime gross revenue from that product exceeds $1 million USD; in this case, the first $1 million remains royalty-exempt." Additionally, they seemingly waive the 5% royalties if you sell the game on the Epic Games Store (ONLY for sales done through EGS, all other platforms retain the 5% royalties) Source: from their Epic Games Store publishing page: "Beyond the normal ease of shipping on every platform, there are no engine royalties for UE4-based games sold on the Epic Games store. If you’re using the default free license with a 5% royalty, for example, you won’t pay the licensing fees from your sales on the Epic Games store. Royalties from sales on other platforms would remain the same 5%." Finally, the royalties are only on gross revenue AFTER the 1 million mark. So if you have a game that made $1.1M, you only owe 5% on the 100k (which is only $5k). I am seemingly unable to post links here - that's why my comments apparently weren't going through. Just search for Unreal Engine FAQ and the Epic Games Store Publishing FAQ in Google and the first results are the sources.

[@GameDevAcademy]

Thanks for this

[@Mdogg2005]

@@GameDevAcademy You bet!

[@zin7500]

@@GameDevAcademy Their(1) first sentence is correct, but contradicted by the second one. You don't have to hit 1 million with each game your working on, before royalties kick in. They probably worded it poorly. The 1 million lifetime exclusion before royalties kick in, is per project. You don't pay any royalties for a project until you a) pass 1 million USD in gross revenue, and after that b) exceed 10k per calendar quarter. Royalties are calculated from gross earnings. There are other important figures to be aware of, such as how Epic calculate royalties based on any advance you get towards your project(e.g. from investors, such as a publisher). Since we're talking money, it's good to know that you're expected to do a bit of bookkeeping, and you'd want to do this from the start. Hiring somebody would be the ideal solution, but it'd naturally cost you some money. It's not only a contract obligation, but Epic can audit you. Solid bookkeeping will keep you from additional fees. I haven't read through the whole contract, but overall it seems like a good deal. You can find most of the information in their EULA or their FAQ(links below). But if we're going to be realistic about this. The most likely expense, and the largest one, would not be royalties(given the high bar). It'd be distribution. Epic seems to be one of the cheaper alternatives out there, at 12%. Steam would be the best purely market value, but they take 30%, just as GOG. unrealengine.com/en-US/faq unrealengine.com/en-US/eula/unreal (1) *"Worth noting: this is on a per project basis. So if you're an indie team working on several games, each game has to hit the 1 million USD mark to have royalties kick in."*

[@IMED_LAKEHAL]

thanks to you unity i am learning unreal from scratch

[@roanwa4712]

Same. 😂

[@Namesito]

i have to re learn C++ for this.

[@targashsensei7900]

​@@Namesitoliterally same thing

[@Reyajh]

I'm soo glad I didn't start my project yet (Just about to). All I have to do at this point is uninst Unity and DL/setup Unreal!!! I was nudged towards Unity but honestly, I always felt Unreal's engine is waay better... Can't wait to get started :)

[@aes0p895]

Perfect, and I love the intro. Finally someone who understands that we didn't just randomly click on a hyper-specific technical video lol.

[@AveryAct1]

🎉 I love this video was so concise and exactly what I needed to hear. Keep up the great work!

[@tonylittleton8549]

Unreal engine is great, I've been using it for 7 years, I'm always free to give tutorials if anybody needs them.

[@Ed-ealmighty]

I need someway to remember you

[@bt-ez3le]

do you have discord ^^ would be very happy with help

[@Ed-ealmighty]

@@bt-ez3le just downloaded it

[@chimichangadaily3094]

I want to make a zombie survived; 3d game thats kind of like the mobile game " extra lives' if you could make a tutorial on how to make something like that, that would be awesome

[@iggorr25]

Very cool info THX :) What about Vacuolation projects? Like houses, rooms, car VIZ projects?

[@Amelanduil]

One of my worries was Epic changing the terms of use for Unreal so that it has to be an exclusive for their platform, but honestly I'm not sure anymore if that'd ever happen.

[@Generalsiris]

That wouldn’t be smart on their part, considering how much of an impact steam has in the gaming industry.

[@Amelanduil]

@@Generalsiris many less smart things than that have happened in the industry, so I wouldn't know for sure, but yeah.

[@Generalsiris]

@@Amelanduil this is one of those obvious things. Not to mention I suppose they still want to spread as much as possible

[@Zripas]

Epic could simply do 1% discount (You paying less to epic for hosting your game. This is about that 12% payment) if you do create it with UE and make it exclusive on their Epic launcher. Win win situation.

[@richardparker3273]

Epic games is definitely more than fair with how they let you use their software. I never wanted to pay royalties so bad in my life as right now lol

[@avinashdeogam4318]

I think for attracting the artist, its now free. After habit of Many year , it will charge for subscription.

[@Rainer69]

Is that like a monthly fee or just pay once?

[@lakshaysingh5132]

if game is free to install but have in game purchases, What happen in that scenario?

[@GonziHere]

I'd say that Unreal costs most in time. It's slow to download, build, open level, cook the content etc. etc. That also translates for the need for beefy HW, good net and so on.

[@animalscrown9474]

Best teacher Please sir make a more video and ideas in maya i want to learn with you Good work keep it up.!

[@KeijiKaini]

What about Assets in the Unreal Store. What is usable for games and what not?

[@Amelanduil]

Case by case basis with each asset having its own terms and conditions?

[@ckdunahee4478]

it depends on the license on the asset or pack. If you buy the asset you can use it for whatever you like and if it is free, its the same thing very likely has an open license.

[@ckdunahee4478]

basically theyre all useable for games, but if its a free asset sometimes the creator forces you to add their name for use of the asset in a paid project. If you paid for it, you own it and can use it in anyway you want. Like for marketing and obviously selling a game with the asset in it.

[@august3777]

Does linear content also include and open world game?

[@GameDevAcademy]

Nope. That would come under games.

[@Crafterchen2]

short. concise. perfect.

[@GamingTherapy8890]

Do this 5% royalty charged every month or year ? Thank in advance

[@1XcysX]

A 5% royalty is due only if you are distributing an off-the-shelf product that incorporates Unreal Engine code (such as a game) and the lifetime gross revenue from that product exceeds $1 million USD; in this case, the first $1 million remains royalty-exempt.

[@GamingTherapy8890]

@@1XcysX yes I get that but confusion is. in which time frames that royalty will be charged after the required condition have met. Monthly quarterly or on yearly basis.

[@1XcysX]

@@GamingTherapy8890 It seems to be Quarterly(four times a year). This is an example I found: Royalty Amount Due is 5% of the “Total Gross Revenue: Current Quarter” once “Total Gross Revenue: Lifetime exceeds $1 million.” For example: If your product generated its first $3 million of gross revenue in Quarter 1, you would owe royalties of $100,000 ([$3 million - $1 million] * 0.05). On the other hand, if in Quarter 1 your product generated its first $500,000 in gross revenue and in Quarter 2 generated an additional $600,000 of gross revenue, you would owe no royalties in Quarter 1 and $5,000 of royalties ([$1.1 million - $1 million] * 0.05) in Quarter 2.

[@digitalboyx4012]

@@GamingTherapy8890 you pay royalties quarterly.

[@Reyajh]

I think to really answer your question you'd have to be a EULA Ninja, which I'm not, but just incase you're wondering, 5% is 5% no matter when it's charged and, after a year of 1 mil royalty free, if you're not ready to start paying, honestly then, I think you didn't do your homework...

[@cg.man_aka_kevin]

The software itself is free, but the GPU, MANNN! Even though the prize is going down drastically, but my wallet is still crying, LOL... So, I need to be patient. :|

[@GameDevAcademy]

I feel your pain

[@powerpc6037]

My question is: how do they know you earned over $1 million on a given project? Or do they just expect you to be honest and track it yourself and freely donate them money when you hit that $1 million line? I haven't made anything yet, tried to learn but it seems I suck at making textures/models/animations or basically anything graphical. :p

[@zin7500]

What you need to ask yourself is if you're willing to have a multibillion dollar company come after you when they realize you might be stealing from them. They'll likely find out eventually. If they can't find you in their registry of partnered users, they will inquire if you are partnered. Depending on how that goes, they'd may inform you of the legalities surrounding using their software for commercial purposes. You're expected to keep books of your business if you partner with them. They have the right to audit you as per the EULA. They'll pursue legal means if you refuse. One way or the other, they'll have a look at those books. The royalties are far less than any legal fees and restitution you'd have to pay. And knowing you're in the wrong, it'd be a dumb route to go. There's no statue of limitation on many crimes all of this would involve. You'd not only risk your reputation, but Epic will likely not do business with you again. You may have to cease all sales of the game. Your customers will wonder why and what happened. Word may leak as to why. I suppose you could cook the books, but depending on where you live, your tax records may be publicly available. A judge may otherwise order the records unsealed as part of discovery. Failure to comply would be a very bad idea. Epic would notice the discrepancy between the books you gave them and the public tax documents. Your behavior could be seen as fraudulent in some countries. If you somehow avoided paying taxes, you'd have the taxman coming after you. That's much worse, as not paying taxes may warrant prison time. A measly 5% royalty is not worth any of this. But yes, Epic will likely expect you to be honest. In the end it doesn't really matter if it's for the sake of honesty or self-preservation. *"My question is: how do they know you earned over $1 million on a given project? Or do they just expect you to be honest and track it yourself and freely donate them money when you hit that $1 million line? I haven't made anything yet, tried to learn but it seems I suck at making textures/models/animations or basically anything graphical. :p"*

[@virtualnk5825]

I'm still asking myself how does it work, you pay 5% per year? is it once? is it after the 1 million USD counting one fiscal year after you made 1mil? I know it's only 5% on the money after 1 mil but how does it work?

[@Reyajh]

Wow!!! The 1st mil free?!?!! I'd say that's very generous! But then, o' course, I'm not paying it :P Thanks for the fantastic clarifications!!! Appreciate your succinct delivery!!! -Cheers!

[@IRONFRIDGE]

Marketplace assets… they make from that serious Turnovers. So its clever but totally fair anyways.

[@ComanderJTC]

its a brilliant sales tactic that lets anyone have the potential to make big money or not struggle with as many expenses if you don't make big money giving as many tools and options to developers as possible creates more returns and less work if you only deal with successful games you don't put a burden on developers for expectations of time or paying for something especially if your not successful and if you are successful you both make big money and epic used to charge 10% cut it down to 5% as epic would not be the only expense a developer would face which makes a developer more likely to continue to succeed constant income from many successful games is better then large lump sums of money all at once for software from those who may not succeed its a perfect business model for long term success of more companies games and epic to make it easier and easier to create success more easily making more long term income I appreciate this as someone who wishes to develop games and to see advancement in games faster and faster to eventually get full dive.

[@Knuckles2761]

I love you for short answer in first 10 seconds.

[@GameDevAcademy]

I love you too buddy

[@vocalsync135]

I'm not worried about it but all this may change in 2024.

[@matthewshiers9038]

First reason why anyone would make their game engine free to use is brand power. The more prevalent you brand, the more recognisable it is, the more influence you have. Second reason is that, if they wanted to, Epic Games could probably change that deal. I would have to look through the license, but if it doesn't have "irrevocable" in it, Epic could do what Wizards of the Coast (WotC) couldn't. Here's what I mean: WotC didn't actually have much to claim as their own. You can't copyright or trademark game mechanics. WotC also doesn't have ownership over orcs or goblins or dragons or even the iconic Tarrasque -- that last one is a French mythological creature. Epic Games however, owns the engine - the collection of code that makes it work and that all projects using the engine rely on. If Epic declares that the engine now costs a yearly subscription like Microsoft Office or the Adobe Suite, it will be much harder for existing users to migrate to a different engine than it would to rework a DnD campaign to Pathfinder or some other system. A lot of time and effort would be spent reworking old code and assets to function properly with Unity or Godot (I think), and that's assuming that either of those engines even have a suitable alternative. Remember how BioWare devs struggled with the Frostbite engine while working on Anthem? One of the big reasons was that the engine just wasn't built to handle RPG-type games. It was great for racing games and (apparently) sports games (once upon a time), but there was no infrastructure in the code to support the vision that the studio had for Anthem. It basically had to be built from the ground up! So, yeah. Once you're locked in with a game engine, you're locked in with the company that controls the IP rights to that engine. There's nothing in business that's completely free - either it comes with strings attached, or if you're not paying for the product, you _are_ the product.

[@Reyajh]

Some good points. After seeing the shenanigans Unity pulled I feel, you just have to be ready to up and jump ship!!! Sorta, 'bake it in'.

[@Ed-ealmighty]

Well said

[@huyget]

So is free to make a game as long as you are not doing it for money .

[@767corp]

I don't know man, UE is open source, all its code is publicly available on github I don't get what point are you trying to make here.

[@GameDevAcademy]

I'm not trying to make a point. Some people don't know what UE costs etc. I'm just here to educate.

[@brunobordini7696]

This didn't aged so well! Now it's gonna be a paid software!

[@GameDevAcademy]

Are you confusing this with Unity?

[@brunobordini7696]

@@GameDevAcademy No! Unreal is going to be a paid software for 2024!

[@GameDevAcademy]

I haven't seen that.

[@brunobordini7696]

@@GameDevAcademy They changed it back to what it was before! It will only be paid to those who earn more than 1 million in games, VFX, etc. I think they saw that mess Unity made and changed their minds!