So I’ve never tried to run Unreal on a computer without a gpu, and I know that they say you should have one, but how much would performance drop if you didn’t have a gpu?

you would have a performance drop of 1%

Since is like you have a game is simulated on UE4 Editor viewport to show what you are doing in your scene, GPU is a comfortable feature way to quickly move things in the editor and there are lots of actors. The more actors, the more the performance is affected. Several procedures in the engine requires a good CPU (with extra cores) to do things faster, like: compiling shaders, baking lights, compiling source code, but really I can’t thing a reason why you won’t have a GPU in your machine and do game development, unless it is not game development.

A lot of CPU’s have an integrated GPU, so if you don’t have a dedicated graphics card (like Nvidia) then you can use the integrated one if that’s there. Without a GPU at all you wouldn’t be able to do anything.