Only a week after laying off nearly nine hundred employees, Fortnite maker Epic Games has announced that it will be changing the pricing model for its creation tool, Unreal Engine. The announcement was made by Epic Games CEO Tim Sweeney in a presentation at Unreal Fest 2023, where he also explained the layoffs, the company’s ambition towards Metaverse, and more.
The announcement at the Unreal Fest was captured by Fortnite Creative developer Immature and shared on X, formerly Twitter, and hints at a per-seat fee model, just like Photoshop’s pricing structure, but it is not for game developers.
Epic Games Changes Unreal Engine Pricing
The changes were announced on day one of Unreal Fest 2023, and they are only for non-game developers who are working outside of the game industry. Game developers will continue paying for a license based on a royalty model, and only developers using Unreal Engine in film, TV, automotive, and other industries that use the tool commercially will need to start paying the fee.
Tim Sweeney also claimed that the pricing would not be “unusually expensive or unusually inexpensive” and that it would be similar to subscription services like Maya or Photoshop on a per-seat basis. He mentioned how the company started facing “financial problems” about ten weeks ago, and this is why it had to take the measures it did to cut costs and focus more on Metaverse.
Also Read: Fortnite Adds Age Ratings for User-Created Content
Sweeney said that ever since Epic Games introduced the 5% revenue-sharing model almost 10 years ago, it has only wanted to lower the royalties. However, during the discussions, the only conclusion was, “We really need money.” While answering a question on X, Tim Sweeney stated that students and educators will continue using Unreal Engine for free.
He stated that “there will be minimum revenue thresholds for commercial projects” that will earn below a certain amount. However, the executive did not mention what the threshold would be. Tim Sweeney also talked about the Epic Games Store and said that Epic Games will continue to develop and support the store.
Epic Games Wants to be Transparent with The Pricing Model
Without taking any names, Sweeney added that there have been a lot of talks about “other engines’ royalties” in the industry, and he wanted to announce these changes for “transparency.” Unity’s pricing model wasn’t taken well by developers, as it would have charged a flat rate fee every time an app or game built on Unity was installed.
Unity faced backlash and heavy criticism, eventually backpedaling and announcing a new updated pricing model with an apology; however, it doesn’t seem to have done much good. Tim Sweeney said that Epic Games has been heavily funded by the earnings of Fortnite for the last six years, and this change is required for the company to do better.
Also Read: Epic Games Lays Off 900 Employees in Latest Hit to the Gaming Industry
Epic Games is not targeting game developers who mostly rely on Unreal Engine, and bringing a per-seat licensing plan for other industries is not too much to worry about, as long as these pricing changes do not exploit the developers. No specific date has been announced yet, but the model is to go into effect sometime next year, and it would help Epic Games improve revenue from its engine.
However, Epic Games’ way of cutting costs by laying off its employees doesn’t sit right, as it looks to do better and has high ambitions with Metaverse. Although reports say that the layoffs come with severance bonuses and health insurance support, it still doesn’t justify such measures.
What are your thoughts about the pricing changes announced for Unreal Engine by Epic Games? Do you think it will help the company get back on track financially? Let us know in the comments!
Source: Twitter
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