I couldn’t find anything about this in the EULA or on the forums.
Let’s say I make a UE4 game that has extensive modding support, comparable to Garry’s Mod or Cities: Skylines. The players could create custom content for the game either in-game or using the UE4 Editor. The custom player-made content would preferably be shared on Steamworks. Steamworks allows content creators to charge for their custom content. I’m not exactly sure about the details, but I think the revenue is split 3-way between Valve, the game developer and the content creator.
In this case who would pay what equity to whom?
I’m pretty sure I would have to add this revenue to my total revenue from the game and pay the 5% equity after $3k/quarter to Epic.
What about the content creator? Does it make a difference whether the content was created in-game or using the UE4 Editor?
The EULA does address modding in a sense in Section 1(b): “Any public Distribution which includes Engine Tools must take place either through the Marketplace (e.g., for distributing a Product’s modding tool or editor to end users) or through a fork of Epic’s GitHub UnrealEngine Network (e.g., for distributing source code).” So while you can distribute, or have distributed, mod content through Steam, distribution of mod tools needs to go through Epic.
But to answer your main question - revenue from mods counts as revenue from the game, so royalties are owed. Specifically, where you the game developer receives a cut of mod revenue, you are responsible for the 5% royalty on gross revenue for those mods. However, if you the game developer aren’t participating in mod sales (i.e., you don’t get a cut of that revenue), the burden of paying royalties on that mod revenue can shift to the mod creator (who must themselves be a EULA licensee in order to obtain the mod tools).
Do you know what happens when the revenue is split 3-ways (Valve, mod creator, me)? Unfortunately Valve doesn’t discuss the splits publicly, but I assume they take a share too. It is for instance known that Dota 2 mod creators receive 25%, the rest presumably going all to Valve. In the case of third party games, I assume the rest would be split between the developer and Valve.
In this case, would the developer and the mod creator both have to pay 5%? Or only one of us?
I think the best solution would be, if the developer paid the 5% from his share and the mod creator wouldn’t be bothered with it. I’m not trying to bargain, I just think modders shouldn’t have to deal with the paper work, when the developer already has to anyway.
How is UGC even achieved? Do you give them a plain project file for them to test their stuff in and send it to you? I would love to let people make their own maps and give it to their friends via copy/past install to a maps directory or something.