UE 5.6 project creation fails on Default.rc2 / rc.exe — exit code -1

Hey folks,

I’m running into a blocking issue when creating a new C++ project in Unreal Engine 5.6.
The project fails to compile during creation (at about 2% progress) with the following error:

[1/48] Resource Default.rc2  
Resource Default.rc2: Exited with error code -1. The build will fail.  
rc.exe command:  
.../Windows Kits/10/bin/10.0.22621.0/x64/rc.exe ... "../Build/Windows/Resources/Default.rc2"

Then it ends with:

Result: Failed (OtherCompilationError)

Some key details:

  • The failure happens during project creation, not after — specifically during the initial compilation step.
  • I’m on Windows 11 with Visual Studio 2022 (v14.38.33145) and Windows SDK 10.0.22621.0
  • I’ve completely uninstalled and reinstalled Visual Studio, manually cleaned registry leftovers, and reinstalled the full C++ toolchain, MSBuild, and SDKs
  • I also fully reinstalled Unreal Engine 5.6
  • I manually tested both rc.exe and cl.exe — they run fine from the command line
  • Environment variables look fine, system-wide PATH and INCLUDE are set correctly
  • C++ projects won’t build or open at all — even existing ones fail
  • Only Blueprint-based projects work fine

Tried:

  • Running UE and VS as admin
  • Rechecking Windows Kits path and permissions
  • Verifying engine installation
  • Rebuilding project files manually from .uproject
    Still no luck.

Would really appreciate any help or ideas — this has been driving me nuts!

Thanks in advance!

You can try forcing your SDK version in your buildconfiguration xml file

Your project path\Saved\UnrealBuildTool\BuildConfiguration.xml

<?xml version="1.0" encoding="utf-8" ?>
<Configuration xmlns="https://www.unrealengine.com/BuildConfiguration">
   <WindowsPlatform>
<WindowsSdkVersion>10.0.22621.0</WindowsSdkVersion>
</WindowsPlatform>
</Configuration>

5.6 compiles ok on vs 2022 (v17.14.5)