Thursday, October 5th, 2023 Posted by Jim Thacker

Epic Games to start charging to use Unreal Engine for VFX

Recent VFX and animation projects created in Unreal Engine. Epic Games is to begin charging for the use of Unreal Engine in industries outside gaming on a per-seat basis next year.

Originally posted on 5 October 2023. Scroll down for new details of students and indie users.

Epic Games is to begin charging fees to use Unreal Engine for non-gaming work, CEO Tim Sweeney has announced.

Studios using Unreal Engine for non-games work, such as VFX, animation and visualization, will be charged a on a “seat-based enterprise software licensing model” from 2024.

The software will remain free for students, and for indie productions below a revenue thredhold.

Game developers will be unaffected, with the existing 5% royalty rate remaining in place.

Announced in the context of last week’s 16% staff layoffs
Sweeney announced the changes during Epic Games’ Unreal Fest 2023 conference, a recording of part of which was shared on X by Fortnite: Creative map maker Immature.

In the video, Sweeney discusses last week’s announcement that Epic is laying off 16% of its staff, along with the company’s current sources of income, which include licensing Unreal Engine.

While Unreal Engine is now routinely used as a real-time renderer or virtual production environment in industries outside gaming, including VFX, animation, commercials, broadcast graphics and visualization, Epic is unusual in that it currently does not charge studios to use it.

The firm does not charge royalties on any product that does not include engine code, like pre-rendered video.

Maya or Photoshop-style licensing to come in next year for offline use
That will change next year, with Sweeney revealing that Epic will be moving to a more standard “seat-based enterprise software licensing model” for industries other than game development.

Although the specific example he uses is automotive work, that would also affect other non-real-time uses like VFX, broadcast animation and architectural visualization.

Unreal Engine will become “a licensable piece of software like Maya or Photoshop”: both software applications with subscription-based pricing models.

Sweeney said that Epic Games has not decided on the exact terms, and that he was announcing the change in advance “for transparency”, but that the price is “not going to be unusually expensive, or unusually inexpensive”.

Updated 6 October 2023: Unreal Engine will remain free for students and indie productions even after the new licensing comes in.

In response to a question from Games From Scratch on X, Tim Sweeney replied that indie film makers will not be affected, commenting:

“There will be minimum revenue thresholds for commercial [projects], and student/educator use will remain free.”

Game developers unaffected
The changes “will absolutely not affect game developers”, with the existing 5% royalty rate on games that reach Unreal Engine’s revenue threshold remaining in place.

Sweeney commented that since the model was introduced in 2014, it has been reviewed several times internally, but only to discuss lowering the royalty rate – although he joked that the conclusion of the most recent discussion was, “No, we really need the money.”

Read Epic Games’ licence conditions for Unreal Engine for game developers and other users