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Unreal is completely free for up to $1 million in revenue. And at that point, the 5% royalty is very much a happy problem.


Lifetime royalty fee on any related worldwide gross revenue is a happy problem?


The question is about counterfactuals

If unreal cost money up front, would this have been built? No.

Unreal is saying: hey, we contributed to 1/20th of your success, because you could not have done this without us.

Thus, in the event that you're extremely successful, yes, you'll owe unreal a million dollars. But that's only because you made 20mm and keep 19mm for yourself.

That's an incredible bargain.


Shiny, that's why I thought you might've felt it fair, but couldn't have put it this well.


Surely better than this engineer having to pay $100k upfront which would likely mean he never made the game at all. 5% over a million seems pretty reasonable to me. I guess it'd be an issue if profit margins were thin, but that wouldn't be the case here.


Sure as long as we acknowledge that this isn't really free it's just deferred payment


But it is free up to $1mm in revenue. Anyone can go and download the engine and use it as much as they want free. It is really smart and honestly $1mm is a generous entry point to capture a royalty for everyone involved.


They could have just sold the engine, even a subscription is better than royalties. If my game sells more it doesn't cost Epic any more money.


You misunderstand the business model.

Unreal is like venture capital or a book advance (or the equivalent in music record deal)

Can you self publish? Sure, of course, have fun. But if you want the support and infrastructure of a company that understands the business of books, you take a deal and it is just like this: if a bunch of authors get book advances, that is generous to the ones who are unsuccessful, and they can only do that _because they capture the upside of those that are successful_.

Without that, you don't get advances for anyone.

So the point I'm making here: unreal provides variance reduction for all game publishers and yes that disproportionately benefits the ones who make under a million. But they're the ones who need the help!

And in exchange, if you're one of the lucky few, you pay a shockingly reasonable 5% in perpetuity.


I don't think it's a good analogy. You don't have to "self publish" (go without a game engine). You can choose a game engine, just a different one that doesn't require you to report your income etc.


Ok, then do that? The game you make will be limited by that choice. If those limitations are acceptable, then great!

My contention is that people can build more ambitious games that are more likely to make their creators rich if they use Unreal, and if the creators also think that they should use Unreal and if they don't they shouldn't.


I was replying to someone who said how fantastic it is that the guy was able to make it for free. I'm not saying it's all completely bad, again Adobe subscription model and past piracy tolerance allowed many people who couldn't afford their stuff to use it while paying less or nothing, just adding nuance about "free"


Of course! And I think it's fair to require people to be honest.

I just fundamentally disagree with this line of thinking:

> even a subscription is better than royalties

Royalties are a great business model that allows more creators to create. You can dislike it, but I genuinely don't know that this game would exist with a different business model, and I want it to be easy to make art (or other things!)

And while there were a bunch of interesting side effects of piracy (people who pirate more music were bigger fans of music and spent more later - correlation/causation questions obvs), I would strongly prefer that the easy thing to do (ie cheapest/lowest friction to get started) be legal


> I genuinely don't know that this game would exist with a different business model, and I want it to be easy to make art

I think the guy did it on enthusiasm and if he used say Godot he could probably have a pretty good result too, if less impressive visually. But you have good points, sure.


I know you’re trolling but come on. The entry price for what you are suggesting would never be obtainable for folks like this kid. You can absolutely negotiate pricing if you are a big enough studio but for hobbyist they let you use it for a royalty. It’s great because it opens it up for everyone. If they charged a fixed fee it would have to be at a very high price.


Not deferred payment for most devs as they do not reach the 1 million revenue


For "the best train sim ever made" they probably reach it.


Sure, and then he can afford it, because he's making over $1M/year revenue on this sim, and taking a very reasonable 5% off the top of that. So it blunts the profits a bit at that point, but it hardly seems like such a terrible thing at that point.


By that logic we should be OK with Adobe's subscription model. It makes it affordable to people who can't otherwise use it. Ultimately it means we can't own it (and just like we can't own UE, we owe Epic income reports for life).

I'm not saying it's a terrible model and it's great that games are made with it but let's be honest it's not all rainbows.


I don't know anything about Adobe's model - I have (pretty happily) never bought anything from that company. But the two are not very similar, and I don't buy the argument that you're trying to make - I think you're trying to bring in dislike of Adobe's model as an argument against Epic's, despite the two being pretty fundamentally different.

"it's not all rainbows" - I would also not let perfect be the enemy of the good here.


> I don't know anything about Adobe's model

You do, becaude I explained... It's subscription based. It's fundamentally the same because in both cases you don't own it. Epic's is just with the added element of freebie at first

weird how HN is up with pitchforks against that but OK with Epic's.


To be able to use this tech in the first place? I have no glue about business problems but this sounds far better then the 30% rip off by apple and Google app stores....


I mean, he's still going to be paying 30% to Steam.


> 30% rip off by apple and Google app stores

Sounds like a happy problem to me;)

By the way you don't only have to file a report for Epic whenever you release a game using UE, you also have to report them your yearly sales and calculate what income is "directly attributable to UE" for that game. For an ordinary small person, for whom you imply lifetime 5% off gross worldwide revenue is a "happy problem", this is way more involved (and prone to legal liability) compared to app stores. You will probably have to hire people well before the million mark to make sure numbers are OK and you don't accidentally owe Epic $$$$$.

I know which model I would choose. Probably the one where I raise prices by 30% and don't have to deal with anything else.


At the point where you have 1 million in revenue you for sure have an accountant even just to do your yearly business taxes. So reporting to Epic just becomes an extra hour of work to make the report.


Or not. I depends on the country and its tax system.


What is this insane argument. Now you are telling me it’s a burden of paperwork because reporting your revenue gets complicated?


I'm saying it's not a "happy problem":)


There is this high correlation with low quality comments and smiley faces, that and when people like to insult others and put a little winky face at the end.

You are simply making up nonsense. It is not a lot of work as most likely sales are being driven through a handful of platforms. Reporting is simple and no different than doing your taxes. It is very much a happy problem. Similar to having to pay more taxes. There is more burden but you are making more money.

Your argument is insane because Indonesia average income in USD on the high side is around $300. If you make $1mm USD, having to do some extra paperwork and pay $50k per $1mm of revenue is an awesome problem to have.


You're calling my argument insane, you're saying my comment is low quality, and imply I'm the one insulting. What is my argument then, in your opinion?


If that’s all you have to respond then you sir are the one with no argument. I have listed my points multiple times. All you keep saying is “they could offer it at a fixed price”. Well that price would be well above any hobbyist. It is kind of an insane argument. They have had fixed pricing before without royalty and usually that price is north of $1mm. Free + 5% is pretty amazing. There is enough competition in this space that you could always go elsewhere.


If you are a fan of royalty based business models, you can be that. What are you so upset about?


Classic now the “what are you upset about”. Sorry not upset here just love to push back on ridiculous people. Businesses are free to operate however they choose. There are other options in the market outside of unreal ( though they definitely have some of the best tech). 5% is incredibly cheap for small shops. Larger studios will negotiate better rates or potentially a fixed fee. You have still yet to support your argument.


If you get a million dollars in revenue as a solo dev, it's pretty much just winning the lottery. You've already spent all the working hours to make the game, so it's pretty much all profit at that point. What costs do you even have?

It's a free choice to use the engine, you can use another engine or make your own if 5% is too much for you.


> If you get a million dollars in revenue as a solo dev, it's pretty much just winning the lottery

You know it's not 1 mil per year, it's 1 mil over your lifetime


You typically only win the lottery once as well... It's 1 mil at the release date of the game and the following maybe 3-6 months. Game sales usually happen at the release date and then there's a pretty much insignificant "long tail" of sales.

Anyway, while 1 million isn't really enough to retire instantly, for sure it lets you retire 10-20 years earlier if you're just a little bit smart with money.


The vast, vast majority of indie game devs will not see $1m in revenue in multiple lifetimes.


Yeah, you also get updates to the engine, Steam's share is bigger, and you still keep everything else.

I would be okay with getting 75% of everything earned over $1M.


> you also get updates to the engine

They could sell the engine and sell new versions separately as one time purchase.

> I would be okay with getting 75% of everything

I'd be okay getting 70% from the start. That's not what it's about.


are people really balking at paying 50k on 1 million of sales? that is a problem i would like to have.

steam did provide the basic dev/hosting/sale/marketing platform.


Should unreal give away their work for free? What is your argument. They don’t take a single royalty until $1mm and 5% is not a wild number considering it’s making use of the engine.

Heck steam takes 30% which is much more egregious but factoring in costs of running steam, payment processing and the free marketing its almost always worth it.

Share a counter argument to how it should be please.


There's many ways that are better than royalties. Just sell the engine as a one time purchasec have a non-profit foundation where sponsors fund development, etc.


If they sold it as a one time purchase this kid would have never been able to use Unreal.


If Adobe sold their suite as one time purchase many creatives who can just afford a monthly subscription couldn't use it. Does it make it a great business model.


Sorry I don’t know what you are trying to say?


What are you trying to say? You can't even get the name of the company right. "unreal" won't give their work away for free. UE is a product, Epic is the company that develops UE.


Sorry I still could not understand your point about Adobe. Instead of getting defensive and attempting to deflect “what’s unreal?” in the context of unreal engine you should try to defend your position.

Edit: NM you are a new account. Shadow banned on my end. Enjoy!




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