Hacker News Reader

Comment by scott_karana | Hacker News Reader

It appears they've backed off on the royalties, too: originally, it was 5% of gross[1], and now it's 5% of gross after $3000 sales per quarter.[2]

1 https://www.unrealengine.com/blog/welcome-to-unreal-engine-4

2 https://www.unrealengine.com/blog/ue4-is-free

View on HN

That change happened about six months ago. It's quite nice, they don't even ask you to file any paperwork if your revenue is under $3000 for a quarter.

Does $3000 reset every quarter or it it a one-tune limit? Is it (gross - $3000) * .05 or gross .05 when the condition is met?

The phrasing is ambiguous, unless I'm missing some grammar rules. And no, I'm not asking out of pedantry.

>When you ship a game or application, you pay a 5% royalty on gross revenue after the first $3,000 per product, per quarter.

Not only does it reset per quarter, it is per product as well.

That seems pretty gameable (and who would be better at gaming systems than games devs?). "Oh, yeah, we made $2999 on Gem Clan Quest, then $2999 on Gem Clan Quest Super Deluxe Edition, and $2999 on the Gem Clan Quest Candy Kingdom DLC, which is more of a sequel really, so it's a totally different product..."

My guess is their not interested in the small fry and are looking for companies that earn hundreds of millions.

If a company was gaming this pricing creating 100 products each earning $4,000 (vs. $400k) they are saving $15,000 and are likely to hurt their business via customer confusion.

It may also be a case of people you don't want as your customer. I can only imagine that someone with this kind of attitude would use support resources very heavily if they had access to paid support. Maybe not to the tune of $15k, but who knows.

Doesn't necessarily have to be that high. It's more that they are trying to earn their revenue for actual game publishers of all sizes.

Other than the particularly small scale operations (someone's side project, etc.) if the product hasn't hit $3000 revenue in its lifetime, even small/medium sized business would be fairly troubled in the standpoint of sustainability.

It's an issue of not being able to compete with Unity any other way too. Small developers that gain experience with your engine sometimes become big developers, who are going to be used to your engine. Makes sense.

That does not scale really well, unless are really on the edge of this 3k. As soon as you start earning more, your users will be confused if you release 'new' product every month. Besides, I bet if you read full license, it will have proper legal rules there against this and other tricks you might come up with.

I think maybe this falls under the EULA?

"6. Records and Audits

You agree to keep accurate books and records related to your development, manufacture, Distribution, and sale of Products and related revenue. Epic may conduct reasonable audits of those books and records. Audits will be conducted during business hours on reasonable prior notice to you. Epic will bear the costs of audits unless the results show a shortfall in payments in excess of 5% during the period audited, in which case you will be responsible for the cost of the audit."

Yeah, but I think $3,000 is a small enough increment for them. You'd need to do this dozens of times for it to be a meaningful aggregate amount. And that situation should be fairly obvious and easy to police.

My initial reading is (gross - $3000) * 0.05, but I imagine they spell it out precisely somewhere.

There are more info here: https://www.unrealengine.com/eula

The after $3000 sales per quarter was implemented in April '14 but seems better communicated now. Tim Sweeney answered this himself in April.

https://answers.unrealengine.com/questions/15056/need-some-c...

I've always wanted to know how the 5% royalty is enforced.

Other, much lesser known, engines have attempted to do something of this sort by acting as an intermediary eg. publisher, planning to pay developers after they were paid by Apple. For obvious reasons that was immediately dismembered by the community.

The only way I can figure is they'll ask for an iTunes connect login so they can check on the numbers for themselves.

Speaking as a developer, it just sounds like something to be avoided from the start.

Lawsuits.

I imagine the revenue distribution would follow a power law here. So it would only really make sense for Epic to go after non-compliant "whales", where the unpaid royalties exceed the legal costs.

Also, the more profitable the project, the lower the non-compliance rate, probably. It makes little sense to defy the royalty agreement if you have a successful project.

I would phrase it "contracts" - which has the implication that if you violate the contract, you may be sued. Contracts are how just about everything is "enforced". I think that programmers tend to think that if something is required, we must have programmatic protections in place that ensure it actually happens. Most of the world does not work like that; they rely on contracts.

To handle noncompliers, they can get off of the various App stores with a simple DMCA request, no complicated lawsuits required, unless the developers appeal the take down, which probably involves a lot of "under penalty of perjury" lying.

Why would breach-of-contract have anything to do with the DMCA?

I assume cma is suggesting that the contract would allow Epic to revoke the license of anyone that failed to pay their 5%.

Once Epic exercises that right, any further distribution of the product would be a violation of Epic's copyright and Epic could file a DCMA takedown.

Because the developer doesn't own the copyright to the engine?

It's unfortunate that this model really only works for large developers serving broad markets like gaming.

Whereas if you're an indie developer writing image processing code for example, it is going to be hard to find infringers and harder to strongarm them into coughing up licensing fees.

I expect this has the effect of keeping source code behind closed doors that would otherwise be public.

They don't necessarily need to do a lawsuit. They could just shut down your UE subscription until you file the relevant proof of earnings.

You don't need the subscription to work with the engine, its a GitHub repository you can just locally clone.

So a state-of-the-art graphics library, a critical component to your new, moderately successful video game, doesn't deserve 5% of the revenue?

Yeah, if you think you can write your own alternative to Unreal Engine for less than (revenue-$3000)*0.05 per quarter, then by all means, you should do that.

Competion is a wonderful thing.

I can't build a decent car for less than the cost of a low end BMW. But, there are plenty of other companies than can.

So, the real question is what are the other options out there and I suspect there are few engines that can come close.

iDTech is no longer licensed for third-party use; only Zenimax properties can use it. CryEngine is available -- they have a $10 a month subscription plan that is royaly-free, but you don't get source code access like you do with Unreal Engine here. (They offer seperate terms for source access.[1]) Unity exists, but I don't think it's in quite the same tier as Unreal (although for some projects that may not matter).

[1] http://cryengine.com/get-cryengine

Perhaps not, as a graphics programmer, rewriting the rendering system is comparatively simple, enjoyable, and perhaps not worth 5% of a moderately successful game.

However, UE4 is much more than just a graphics library. I'd argue that it's editor alone is worth many times more than their rendering features. And IMO, it's trivially worth the 5% of revenue.

Writing a rendering system or this rendering system? I think you're underestimating the tech here. Could you match their real time global illumination, radiosity, physically based rendering, etc with good performance? I get the impression you'd need to go over like 100 different papers to even get a baseline implementation, without any clever optimizations, for a modern engine like UE4.

Yeah, any reasonably skilled programmer can write a pretty graphics engine as a hobby project, since that is the fun part of making an engine. It's all of the other boring stuff that is worth (arguably) more than 5%. Writing the resource management system and the editors takes a long time and a lot more effort and is not as fun or glamorous as writing a rendering engine.

Not to mention this is much more than a 3D rendering middleware.

Or, you know, pay the royalty you agreed to pay and stop being a thieving scum.

I would think they have some sort of enforcing mechanism. It almost seems like the $3,000 limit is a signal of the cutoff when it starts becoming worthwhile to pursue scum buckets.

Speaking as another developer, their terms sound incredibly fair.

I thought it was always after $3000

Deleted comment

Steam does not take 90% of sales.

Reply on news.ycombinator.com