Is this true???
Don’t quote me on this, but from what I understand, it is. I think it’s because you aren’t distributing binaries of the Unreal Engine for a price, and that’s probably why the 5% royalty thing applies to games instead of Film, simulations, etc.
The FAQ clearly covers this:
Pretty much if it is not interactive (i.e. user doesn’t interact with the product) it is royalty free. If you are still unsure, contact Epic and indicate what your product is and maybe provide some more information and they can tell you whether they will require royalties for it. You will need to be more descriptive than your title however.
On the home page/overview at the very bottom. It’s says…The 5% royalty starts after the first $3,000 of revenue per product per quarter. BUT…Pay no royalty for film projects, contracting and consulting projects such as architecture, simulation and visualization. What really confuses me is that it says they want, 5% of each product or per product of what I make. But no royalty for filming etc…???
How and where does this conclusion ends? I don’t want to get caught up in some Illegal scam.
Okay…that’s wise enough. But what do you mean, * I think it’s because you aren’t distributing binaries of the Unreal Engine for a price*??? Okay, so what about casting TV animes/animations and or comic books for profit??? I guess they would want royalty for that too, if not.
I think this might be a case for you posting your question on Answer Hub under the legal section.
*You will need to be more descriptive than your title however. *, My description is according to the sequel of the…Pay no royalty for film projects, contracting and consulting projects such as architecture, simulation and visualization.
Which I want more verification on that before I go splurging with something I don’t know very well about.
I tried using the answer hub and it don’t work.
SO if you make a movie using unreal and it sells a million copies it’s all royalty free?
Pretty much. 8-}
that seems a bit unfair then
Well, go make movies then 
Maybe that’s the idea, to make it a bit more attractive?
I think Epic’s mindset is, if the product is used for markets it’s not targeting, they aren’t too concerned about profits and would rather not hinder it’s chances to grow.
Marketplace. This is their other way of monetizing unreal! 
And it’s **** fine!
By The Way , I think there’s another interesting reason why unreal doesn’t ask for why royalties from movies & non-interactive media. Because they can ask for a custom upfront payment from big movie studios, who want to create movies with the help of the extra research, development & other high level services directly from unreal engine developers.
So they don’t have to worry about small & experimental movie studios who can do their work theirselves.