> It's free until you make a million bucks USD, and only after that is it 5% gross, and only in quarters where you made more than $10,000 USD. So most folks never end up paying anything. There are no subscription fees or anything. To clarify, if you make a million bucks, and then one dollar, you only owe them five cents.
It sounds very fair to me, what are the general thoughts here?
The arrival of Fortnite Money has meant that Epic can afford to spend a lot more and charge a lot less for everything they do. They opened a studio in Vancouver and started hiring whoever they wanted from other companies, e.g. The Coalition, with starting salaries that made jumping ship a no-brainer for the engineers they were picking up.
For Unreal, I think it fundamentally comes down to:
1. We want to be the biggest and best game engine out there
2. We want everyone to use our technology if at all possible
3. The vast majority of our money is going to come from the top 1% of the huge players in game dev (CD Projekt Red, The Coalition) and not from anyone else
4. The more people who use Unreal to make games, the more Unreal devs there are in the world, and the more Unreal devs there, the more likely those huge companies (or potentially blockbuster indies) are to choose Unreal for their projects because talent is readily available (see point #3)
I spend money on Fortnite roughly every month. Extrapolate that to an insane amount of players and it's not hard to see that they're in an excellent position.
Creator payouts from building games and experiences within Fortnite builds loyalty and encourages further development from kids going, "Ooh, I have an idea for something."
Just as in game microtransactions, it doesn't matter how much or little the median person is paying, because all the profit is in the minority of very big payers / 'whales', so you optimize the payment structure of the small payments to ensure that they don't prevent you from capturing the whales.
If your game doesn't earn a million dollars, it doesn't matter to Epic, because all those (many!) tiny games in total don't earn enough that even a much higher pricing would move the needle.
However, if the low-end pricing structure means that one more (or one less) blockbuster chooses this engine, that makes all the difference, because they are going to pay the full rate out of the billion dollars they earn.
Just remember how many AAA or big name titles use Unreal as engine. Those can sell millions of copies at 60 per copy. And even if they have much better rate it is still probably half a million to millions a game.
With numbers like that, collecting a half-million dollars from even ten blockbuster games per year is probably not even worth the time and energy it would take; that would be 0.1% of their revenue, which, relatively speaking, is basically nothing. That whole business wouldn't even show up on the balance sheet.
FWIW basically no established game developer is using the standard terms epic provides. If you’re in a situation where you have a high degree of confidence you will owe Epic money it is worth reaching out in advance.
True, but I also imagine that Epic isn't bargaining down the rev share too low. Or, companies are fine paying 8 or even 9 figures upfront in anticipation of such success in a custom contract.
Technically if your game is not F2P Unity will still be much if your revenue i a couple if millions (even with their bizarre and convoluted per install pricing).
Also I don’t think they have that many people working on the engine (they have less than half the employee count of Unity) and it’s probably subsidized by Fortnite revenue to some extent.
in that regard I'm sure they will do the same with Unity. But Unity for the little guys that just a little bit too big suffer the most in this deal. At least Epic handles that edge case by letting those edge case devs keep the first million.
Tencent purchased a stake in Epic in 2012, years before the f2p mobile market took off.
Tencent isn't just a mobile game company, they are basiaclly Chinese Microsoft for how many parts of the industry they are entwined in in their home country.
Shame, Chaos Rings trilogy was 2/3 games out by that time and excellent premium games. Stardew Valley would come a few years later. Infinity Blade would also have been a spectacle if you were on IOS. And of course, various console ports. 2012 was probably the peak of premium mobile games for me.
>Also, they made their blood money on Asian markets not here.
sure, but Asia took a while to adapt to mobile as well. Tencent and Netease were still riding out the flash Web hype with stuff like MapleStory and Dungeon Fighter in the very early 2010's. Think it was also the tail end of MMOs too.
What happens when your business has a portfolio of products/services over multiple departments, spanning various platforms, and only one consumer mobile app uses Unity for an augmented reality component that's not a core offering (premium feature)?
But to answer your question, they are royalties on top of that one mobile app, not your entire revenue. If you distribute it for free, you might pay no royalties; if it somehow is tightly related to your main revenue-generating product then you’d sign a custom licensing agreement with them.
Epic is a highly profitable private company controlled by the founder. They have no incentive to mess with a business model that works; their margins are higher than Unity.
Unity has over 3x as many employees as Epic, much lower margins, is publicly traded, and they've been losing money hand over fist. Everything is subject to change until they make money, shut down, or are acquired.
It sounds very fair to me, what are the general thoughts here?