Epic Games Lowers Unreal Engine Royalty Fee to 3.5%

Epic Games recently announced that starting January 1, 2025, the Unreal Engine royalty fee will be reduced from 5% to 3.5%. This change is part of the "Launch Everywhere with Epic" initiative, which offers financial benefits for developers who release their games on the Epic Games Store at launch. This move is expected to help developers, attract more exclusive releases to the store, and shape the future of the Epic Games platform.

Benefits for Developers on the Epic Games Platform

For developers, the impact of the reduced fee is clear. A game generating $10 million in revenue would previously owe $500,000 in royalties, but under the new model, developers will pay only $350,000 — saving $150,000. For small and mid-sized studios, this means more resources for marketing, additional development, or reinvestment in future projects. It also allows developers to enhance the quality of their games, making their titles more competitive and potentially more successful in the marketplace.

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This cost reduction is especially beneficial for indie developers and mid-sized studios looking for high-end tools without the financial strain of higher royalty fees. By lowering the threshold, Epic is positioning Unreal Engine as an even more appealing option for those working on larger projects that generate significant revenue.

How the Reduced Fee Strengthens the Epic Games Platform

The royalty fee reduction is part of Epic’s broader strategy to make the Epic Games platform more attractive to developers. The Epic Games Store already offers a lower sales commission than many competitors, taking only a 12% cut compared to the 30% charged by most other platforms. Now, with the reduction in Unreal Engine royalty fees, developers can retain even more of their revenue, making it a financially sound choice to sell games through the Epic Games Store.

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This makes Epic’s ecosystem even more appealing to developers who want to minimize costs while reaching a large audience. With exclusive game releases and strong support for indie and AAA developers, the platform continues growing as a competitive option in digital distribution.

Epic’s Strategy and the Unreal Engine Store

Epic’s decision to lower the Unreal Engine royalty fee fits into its goal of making game development more accessible to a broader range of developers — from indie creators to large studios. By cutting costs, Epic hopes to attract more developers to its platform and strengthen Unreal Engine's position in the game engine market, where it competes with Unity and other engines.

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Additionally, the Unreal Engine store offers various assets, tools, and plugins to help developers streamline their workflows and improve the quality of their games. With the reduced royalty fee, developers using the Unreal Engine store can save even more when buying or selling assets like animations, 3D models, or complete environments, making game development more affordable and efficient.

Industry Implications

This reduction in the Unreal Engine royalty fee could have a significant impact on the broader game development industry. It might push other engine providers to rethink their pricing models to stay competitive. By lowering the cost of using Unreal Engine, Epic encourages more developers to experiment with its powerful features, potentially leading to more innovative and creative games.