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Introduction

Unreal Engine is a powerful game engine that has gained immense popularity among game developers due to its capabilities in creating realistic and immersive environments. The engine comes with various features such as real-time rendering, physics simulation, animation tools, and much more, making it an ideal choice for game development projects.

Types of Unreal Engine royalties

There are two main types of Unreal Engine royalties:

Per User Royalty (PUR)

The Per User Royalty is a one-time payment made to Epic Games based on the number of users who will be accessing the game built with Unreal Engine. The payment amount is calculated as follows:

PUR $25 per user x Number of users

For example, if a game built with Unreal Engine has 100,000 users, the PUR would be $2,500,000 ($25 x 100,000).

Revenue Share Royalty (RSR)

The Revenue Share Royalty is a percentage of the game’s revenue that is paid to Epic Games. The percentage varies based on the type of license used and the duration of the license.

For example, if a game built with Unreal Engine generates $1 million in revenue during a year and the game developer has a 25% RSR, Epic Games would receive $250,000 in royalties ($1,000,000 x 25%).

Implications of Unreal Engine Royalties

The implications of Unreal Engine royalties can be significant for game developers. Here are some of the key points to consider:

  • Cost: Unreal Engine royalties can add up to a substantial amount, especially if a game has a large user base or generates significant revenue. This cost needs to be factored into the game development budget to ensure that it is financially viable.
  • Timing: Payments for Per User Royalty are made upfront, while payments for Revenue Share Royalty are made over time based on the game’s revenue. Game developers need to plan and manage their finances accordingly to avoid cash flow issues.
  • Ownership: When using Unreal Engine, game developers do not own the software or technology outright. Instead, they have a license that grants them permission to use the engine for their project. This means that Epic Games retains ownership of the engine and any associated intellectual property.
  • Flexibility: Unreal Engine offers various licensing options that cater to different game development needs and budgets. Game developers can choose from a free version, a paid subscription-based model, or a perpetual license with customizable royalties.