Hello all. I need clarification first before I decide on a program to making games. I understand that 5% of revenue goes to UE4, which at first I did not like, but now I am OK with it. The one thing I am not sure about is if is just a one time thing (per game?) Or do you have to pay 5% quarterly? Thanks kindly for your help.
If I recall correctly, for every dollar you make over $3000 annually from your game (pre-profit, so anything you make from your retail prices before you take a cut), 5c goes to Epic.
So if you make <$3000 annually from your game, you’re not liable to pay royalties
*I’m not 100% on any of , but pretty sure these are the figures I’ve seen bandied around .
The 5% royalty is for a commercially released game, and you would give 5% of your earnings to Epic for each released game you have, but only occurs once the game is making money. Same thing goes for Kickstarter etc, you only pay 5% on earnings, so no you don’t need to worry about it while you are in development. So long as your game is earning money, you will need to pay the 5% royalty quarterly on each game.
Hope that makes sense… 
It’s due quarterly. If your profits are under a certain amount you don’t need to pay anything. I’m not sure what the exact amount is, I think it’s $2,500 a quarter.
Think of it way. You get to use an engine, that in the past required a minimum of about $500,000 to get into for use on 1 game for a 2 year development cycle including the maintenance fee, for almost free. $20 a month is practically free, look at the subscription price for Adobe Creative Cloud or Autodesk.
Yeah, for me $19 a month is nothing. I don’t care about that. Thanks to all those who clarified the 5%. Also, I have no experience making games, I don’t even know how to code:p. I like the look of Blue Print. That’s the main reason I am looking into UE4. So is my . Speaking of which, I am also looking for a program that does not limit my imagination. Hopefully UE4 is the one?
So let’s say for example:
In Q1, I make 5000 (Including cut). So 5% of that goes to UE4. I understand that.
In Q2, I make 4000. So 5% of that goes to UE4, and we do not add the 5000 on top of that from Q1, correct? It is whatever I make per quarter (not adding the previous quarter on top of that)?
5000-3000= 2000, so 5% of 2000 goes to Epic. I dont know how quarterly payments work though.
Btw, check out the Work in Progress and Released Projects sections of the forum to see what programmers, non-programmers and artists are able to achieve with UE4.
Yes to your last question, the results don’t “carry over” to the next quarter, it is 5% only on that quarters earnings.
EDIT: And BTW, Blueprints are awesome, I know how to code but would much rather test things out in blueprint than code, at least for now while I am getting to know the engine.
I guess I know which program I’ll be using then
I tried UDK, Torque, and Unity and couldn’t really get into them. Have done a significant amount of modding. Blueprints are simply amazing for game design.
With Kickstarter remember that any money from backers that goes towards pre-purchasing the game still counts as earnings. They are technically buying your game, after all. Any money paid that is “attributable” to the cost of the game will have royalties due.
The example I saw goes like : if one tier includes just the game for $30 then you owe $1.50 in royalties. If a higher tier for $50 includes the game, a t-shirt, and a poster then $30 of the $50 is attributable to the game (while $20 is attributable to the poster and t-shirt) so you will owe $1.50 in royalties for that backer as well.
Or something like that. Obviously, if you’re running a Kickstarter, you’d probably want to run your numbers by Epic to get clarification from their lawyers/accountants.
Are you sure about Kickstarter? What if the developer switches engines before shipping even an alpha to backers?
Yeah, I’m not sure about either. Kickstarter funds aren’t revenue received for the retail of a commerical game, they’re development funds provided independent of any tangible product. Nothing is stopping you pitching to Kickstarter with a UE4 based product and then deciding to spend the money on making a robotic egg-timer (besides all the hatred from your backers)
are more information about kickstarter (https://www.unrealengine/faq#billing):
"What if my product obtains crowdfunding via Kickstarter or another source?
Royalties are due on revenue from Kickstarter or other crowdfunding sources when the revenue is actually attributable to your product, for example if the user is required to purchase a particular funding package to obtain access (now or later) to your product, or if that package gives the buyer benefits within the product such as in-game items or virtual currency.
’s an example of what we mean by “attributable”: Assume you provide two tiers of offers, a signed poster for $20, and a signed poster plus game access for $50. No royalties are due on ancillary products like posters, so no royalty is due on the $20 tier. On the $50 tier, the user is paying for the poster with a $20 value, and that implies that the remaining $30 of value is attributable to the product. So, for each $50 tier sale, you’d pay a royalty of $1.50 (5% of $30)."
I think UDK was pretty awesome, the only thing making it hard to use probably was just the tedious involvement when coding (i.e. the need to compile the code each time you update it through launching the editor). It gave feedback pretty much like an IDE which was nice. I also liked that you didn’t need to hold down a mouse button when moving through the game world with WASD 
Its woth to mention that funding can also fall under the 5%.
Lets say your are running a Kickstarter.
1 And for the first donation you get a T-Shirt.
2 And second rank gives you a mug.
3 The 3rd gives you a cool In-Game Weapon.
4 4th Rank is A retail box of the game and all of the above.
So for any money you got for 1 and 2 is not subject to royalties.
But 3 and 4 are, since gives you game access/ a in-game item.