Unreal Engine Pricing Update: Epic Stays True to Promise, Maintains Favourable Terms for Game Developers

Epic Games has outlined its upcoming pricing adjustments for Unreal Engine, maintaining its commitment to game developers. At the Unreal Fest 2023 conference, CEO Tim Sweeney announced that Unreal Engine would introduce charges for non-video game uses. However, he assured that this wouldn’t affect game developers, a promise that has now been upheld.

Currently, game developers can utilize Unreal Engine for free until their product earns US$1 million in lifetime gross revenue, after which Epic takes a 5% cut. However, since non-gaming applications, like those in manufacturing, don’t generate video game royalties, Epic doesn’t profit from these users.

With the release of Unreal Engine 5.4 in late April, video game developers will retain the same terms as before, enjoying free usage until their revenue hits US$1 million per product, followed by a 5% royalty. Conversely, non-game industry companies surpassing $1 million in annual gross revenue will transition to a ‘seat-based’ licensing model, requiring an annual fee of US$1,850 per employee using Unreal Engine.

Epic clarified, “If you’re developing a non-game application licensed to third-party end users and relying on Unreal Engine code at runtime, you’ll need to pay royalties, similar to game developers, at a 5% rate for products exceeding $1 million in lifetime gross revenue.”

Epic’s decision to honour its promise brings relief to the development community, especially in contrast to Unity’s announcement of charges each time a game using its engine is installed. Despite Unity’s subsequent apology and attempt to amend these plans, many developers remain frustrated by the changes, anticipating impacts on their future projects.