Gaming No royalties on Unreal Development Kit until $50,000 in sales

[The Helper]

Last year, Epic Games—the developer behind games like Bulletstorm and Gears of War—revealed the Unreal Development Kit: a version of the ubiquitous Unreal Engine 3 that anyone could download, for free. Use it for educational purposes or to release a noncommercial game and you wouldn't have to pay a cent. Use it for a commercial game and you'd need to pay an upfront fee of $99 and royalties on any revenue greater than $5,000. Epic has now raised the royalty threshold quite a bit: now you don't have to pay anything until you earn at least $50,000.

"Under the new rules you are not required to pay royalties on revenue earned from the use of UDK until that revenue exceeds $50,000, which represents a 10-times increase over the previous threshold of $5,000," Epic's Mark Rein wrote on the UDK forums. "We're really excited about folks making some amazing things with UDK and 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."

The royalty percentage remains the same as before at 25 percent, but this still is a huge boon to small developers, letting them earn a solid amount of money before having to actually pay any significant fees. The royalties only apply to the revenue earned above the $50,000 threshold. Here's an example of how the new structure works in practice, straight from Epic:

A team creates a game with UDK that they intend to sell. After six months of development, they release the game through digital distribution and they earn $60,000 in the first calendar quarter after release. Their use of UDK during development requires no fee. Upon release they would pay US $99.99 for a Royalty Bearing license. After earning $60,000, they would be required to pay Epic $2,500 ($0 on the first $50,000 in revenue, and $2,500 on the next $10,000 in revenue). On subsequent revenue, they are required to pay the 25% royalty.

No royalties on Unreal Development Kit until $50,000 in sales

Epic Games has changed its licensing agreement for the free-to-use Unreal …

arstechnica.com

 

[Sevion]

The royalty is still astronomical compared to Torque Engine D:

 

[seph ir oth]

I muchly prefer Unity or Torque anywho.

 

[DarkRevenant]

Given how good UE3 is, a 25% royalty is very reasonable.

 

[Varine]

Torque sucks. We used that engine for a total of twenty six hours before I shut that down. The language wasn't very flexible, right off the bat I had to do fairly extensive modification to the source code, and the physics engine is horrible. I don't like Unity either.

We're using UDK because I happen to like it more than most of the others and id Tech 4 isn't released yet and my engine is another couple years off. However it's not the same as UE3; you don't have access to the source code, which limits your ability to integrate third party tools to DLLBind, which is actually pretty good but it doesn't have much, if any, access to things like the rendering pipeline.

Regardless this is good news. They must be taking a fairly heavy financial hit with this.

 

[DarkRevenant]

More people will use UE3. Really, they're preparing for the future. This is a very good idea on their behalf.

 

[FireCat]

Now that's one hell of a deal!

 

[Varine]

I think they're just releasing a binary version of their older engine since pretty soon I think they'll be releasing a new version of it. id's been doing basically the same thing forever, everyone is just copying them now.

 

[The Helper]

I think they're just releasing a binary version of their older engine since pretty soon I think they'll be releasing a new version of it. id's been doing basically the same thing forever, everyone is just copying them now.

Yeah but the Unreal engine is, well, Unreal I suppose!

 

[Varine]

Well it's a good engine. I like it a lot (obviously, given that my company is using it), I just mean to say that it isn't necessarily better than some alternatives that are available, it just happens to be fairly popular engine that people know about and have a lot of experience with and is public (as opposed to inhouse engines where third party companies will likely not be given the opportunity to license). And a lot of people see UDK and know of UE3 but really aren't sure what they're actually doing and get this weird mentality where UDK is the best indie engine ever. And take into account that, given that I think they're copying Carmack and id (who typically release everything open source when it's retired) it isn't that great (then again I'm like a Mac fan is to Apple, only to id, so pretty much everything sucks in comparison. The only difference being that things id makes typically are actually awesome). But the new royalties are pretty cool, it's unlikely most games will even make $50,000.

Does anyone know if they changed any other parts of the license agreement? Like, is the royalty still only on actually revenue or all generated profit now? I don't feel like going over it again right now.