They have changed Unreal 4 licensing - it is now free for trying out and development, 5% royalties on actual games.
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It’s still the 5% royalty on ALL income BEFORE tax, which is what puts me off.
It’s not just 5% of the profit you make…
Say for example you make an iOS game. Apple takes 30% of each sale, then there’s the costs of the apple developer account, any assets or art you purchased, any developers you paid to help you with the project… and you’ve got to pay all the relevant income taxes or business taxes on what’s left.
The trouble is UE takes its cut before all that. You could be paying them as much as 20% of your actual income in practice when you factor in the charges and taxes and stuff and if your costs are high you might be paying them royalties before you’ve actually covered your outlay and turned a profit. Plus, even a cut of the money you get from kickstarter funding or sponsorships would be theirs.
I’m just holding my breath for @nehon to finish Part 4 
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No thank you .
But it’s 5% of gross revenue per product made with Unreal Engine, not your whole company turnover, which to be fair I think sounds ok considering it’s a really good game engine and they deserve to get something for it.
The crowd funding bit is not too bad either, its 5% of any lowest tier that would give an end user access to the actually game as a result of backing.
You agree to pay Epic a royalty equal to 5% of all worldwide gross revenue actually attributable to each Product, regardless of whether that revenue is received by you or any other person or legal entity, as follows:
a. Gross revenue resulting from any and all sales of a Product to end users through any and all media, including but not limited to digital and retail;
b. Gross revenue resulting from any and all in-app purchases, downloadable content, microtransactions, subscriptions, sale, transfer, or exchange of content created by end users for use with a Product, or redemption of virtual currency, either within a Product or made externally but which directly affect the operation of the Product;
Gross revenue from any Kickstarter or other crowdfunding campaign which is directly associated with Product access or in-Product benefit (e.g., in a multi-tiered campaign, if an amount is established in an early tier solely for Product access, your royalty obligation will apply to that amount for each backer with the same access, but not on additional amounts in higher tiers based on ancillary benefits);
Your revenue from in-app advertising and affiliate programs;
Revenue from advance payments for a Product (from a publisher or otherwise); and
Revenue in any other form actually attributable to a Product (unless excluded below).
I will. Promise. I got busy lately with 3.1 coming.
About all this announcement…IMO that’s a very fair offer. And UE4 looks like a really great engine.
But I couldn’t stand the c++ shit 
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Now that’s the killer right there, I agree.
Yes, this is the key issue here. I think they are pushing programming-by-dragging-rectangles for a lot of basics, but obviously there is a limit to that. And it doesn’t really work for dynamic worlds, which probably a lot of people here are playing with.
But given it is free for playing around, I think it is a nice experience. Just going through the content example is an eye opener for some tricks which can be done reasonably cheaply for a great effect.
I agree.
Well I guess competition is a good thing 
When I saw this I thought fook! I had just paid for the subscription last week! ($19) xD. Checked my account and it’s been credited with $30 for the marketplace! woopie.
I was having a look at using another engine for my next project (I think it’s better to test out a range of them). I had a look at Unity first, but if you want any of the good features, you need to pay more upfront, and even then it didn’t impress me as much as the Unreal Engine.
You just need to look at some of the games made with it, to know the potential: Gears of War, Mass Effect, Devil May Cry, Borderlands, Fable, Tekken, Deus ex, Rainbow six, even Goat simulator haha, to name a few.
I’ve definitely been super impressed by what it gives you for free.
Btw they have something call the Blueprint Visual scripting editor, so you don’t even need to use C++ if you don’t want to; I have not tried using the engine properly yet though. Will probably give it a try in a few weeks and will report back. Also I think C++ seems to have a bad rep here. It is not as bad as you guys think, especially since it has had a reboot with a plethora of features coined “modern C++11/14”, making it easier than ever (I program using it for my day job, so anyone can use it really ;)). You don’t even have to manage memory yourself anymore!
UE actually has some nice libraries that make the C++ part quite clean. I still don’t like how much it expects you to write a game according to its own paradigms with Actors and all that. Its one of the reasons why you can tell UE games from others just by how they look and behave. Its basically like a FPS mod with access to the core code. Even Unity gives you a bit more freedom in that regard. Sure you can go down and use all the bits and pieces in a way that suits your idea of how to program the game but then you lose a lot of the built-in feature set.
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Unreal engine made their engine for free just so they can beat unity and cry engine , that’s all .
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I am very surprised of the amount of news coverage this received considering its just a 15$ discount.
Exactly o.O
Um… if I remember tax code for the U.S. correctly, this is considered as a business expense… thus, you don’t get taxed for the money that goes to epic.
All business expenses involved with producing a product is removed from gross, first. Then the remainder is considered taxable as income. So if the whole “before taxes” thing really bugs you that much… um… is it because you think that taxes are based upon sales only?
I agree with @DannyJo. In my business experience, by gross calculations of revenue sharing is fairer than by net… mainly because of “Hollywood Accounting” practices, where agreeing to net calculated revenue sharing can actually make you OWE money to someone whom you’ve provided services.
As a businessman of 6 years, avoid someone talking about net revenue sharing unless it is understood that you are just tossing services into a non-refundable “tip jar” situation. They wouldn’t have to pay a dang thing to you if “Uncle Olly’s Gold Plated Shark Tank” (bought/used to provide an artist with hints on how to draw a cube) happened to sink the net part of the equation to zero or negative.
Yep, you’re right, in most countries you wouldn’t pay tax on the bit you pay to Epic. What I mean though, is in reality, stuff might break down like this (this isn’t accurate or based on real figures/taxes anywhere, just a rough idea):
App store sale: €0.99
Customer actually pays: €0.99 - TAX = €0.84
Apple deducts fee: €0.84 - €0.25 = €0.59
So after Apple and the tax man are finished taking their cut, your €0.99 app is down to €0.59 that hits your bank.
Then you’ve got to pay your income tax, company tax or whatever else on that depending on where you live… so let’s say for sake of argument you’re taking another 20% off there. The actual amount that hits your account might be €0.47 on a €0.99 sale.
Epic’s cut is based on the original €0.99 though, they don’t have to worry about the taxes and deductions you’ve paid. So for the €0.99 you’ve taken, they will still want their 5%, or 5 cents… so in practice they’re getting 10% of what you’re getting.
Where it would really suck though is on games where you’ve spent a lot on the development. Say for example you hire 2 programmers and an artist and pay them €40,000 each per year. Your game takes 1 year to make. You have €120,000 of debt at the end of it. Your game does OK and sells 200,000 copies at €0.99 on the app store. You only actually get somewhere around €120,000 after Apple deductions - we won’t include tax cos you can usually offset your costs against that. Your costs are covered but you’ve made no money. The trouble is, you still owe Epic €10,000.
I have to say though, I think it’s generally a good deal for indie devs who don’t have high costs they need to offset against profits. The percentage is quite low and with the quality of the visuals in their engine, it may well earn its percentage back in additional sales so it’s probably a good deal.
It’s a shame they are still using C++ although I have to say the Blueprints system seems pretty powerful from what I’ve tried so far - I’ll probably try making a game entirely in Blueprints at some point.
Well, it is a bit unfair if you are very successful. Because the more you are successful the more you pay…And you’d better have kept your 15$/month subscription.
Though they don’t take anything if you earn less than 3000$. Not to be unfaithful but I don’t believe a lot of indie games get past this amount. Especially on mobile. At least that let’s you the chance to fail at selling your game and not worry about the expenses on the engine.
That said…idk how they check how much you earned, how much you owe them, and on what time basis (you can sell a game for years on android and get past the 3k after several years). Thinking that it can be used all around the world and considering the differences in legislation that must be a freaking nightmare to collect the money…
EDIT : anyway …in short, if you are planning on being successful, you’d better stay with JME guys, it’ll just cost you a “hey, made a successful game, thanks” on the forum. (Also maybe Erlend stalking you for an interview )
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I guess it’s 5% of €0.84 like Apple and over €3000 / month
So if you sell your 200 000 copies in 2 months :
2 * (100000*0.84 - 3000) * 0.05 = 9 100
You gain €900 
vs your way
You should compare with how cost you to use an other engine home made or not (dev time, formation, addons,…) ?
It’s the responsibility of the dev to keep records of sales and calculate the royalties and send to Epic… and they have the right to carry out an audit if they think you’re cheating (and you have to pay for it). To be honest that’s the biggest thing that puts me off, because its a lot of extra paperwork
I think the gap visually between UE4 and indie engines like JME will close pretty quickly though… they’ve made a big impact with their nice looking PBR and lighting, but JME, Ogre, Torque and other open source engines are all working on that stuff already. I have faith we’ll be (almost) as pretty by the end of the year, and a lot more libre.
It’s funny that people are complaining about 5 cents on the dollar for the “whole underlying thing that allowed the game to exist”… but are perfectly fine with the 30 cents on the dollar to host your app in a store.
This is the easiest kind of royalty paperwork to do, anyway. number of games sold * purchase price * 0.05… everything else is much harder. If it’s going to be a revenue share at all then this is the easiest and most fair way for everyone involved. It goes in the same accounting column as the 30% to Apple, etc.
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The underlying truth It’s not funny, and it’s actually really sad: technical people get paid less than business people.
That’s a general axiom of modern capitalism.
You may skip the “app store moneytrap” and get 100% of the revenue… if only you manage to let your customer know that your store even exist… 
While at the same time the usual games “more of the same” get rereleased every years and make billions