Do i need to pay royalties if my games are free?

You’ll be required to pay royalties based upon revenue earned from your projects. This includes free-to-play titles that are supported by advertising. If you earn revenue from your game, then you’ll have to make payments to Epic based upon your earnings.

Furthermore, as others have noted, if you were to use Kickstarter or a similar crowd-funding website to secure funding, then you will also be required to pay royalties

This is set at the standard of 5% and is payable on amounts exceeding $3,000. That means if your title earns less than $3,000 per calender quarter, then you will not have any royalties to pay, as outlined below:

“Generally, you are obligated to pay to Epic 5% of all gross revenue after the first $3,000 per game or application per calendar quarter, regardless of what company collects the revenue.”

Additional information on releasing a game and paying royalty fees can be found here: https://www.unrealengine./release