Hello guys. Welcome back to another video. Is Unreal Engine 5 and no
longer free to use in 2024. In this video, I'm going to explain
the upcoming changes to the Unreal Engine 5 pricing and who will
be affected by this the most. So first of all, this originated from
the announcement that came from Tim Sweeney, the CEO of Epic Games at
Unreal Fest 2023 about last week, he gave a speech that essentially talked
and addressed the recent news that they laid off about 800 Epic employees. And And basically to summarize the speech,
he said that they expanded way too much. They hired too many people. And to be fair, they also bought a
lot of companies like art station, Quixel bridge, sketchfab, and they've
made a lot of their services free. So at the end of his speech, he
announced that they will be switching to a per seat license for unreal engine. And for those who are using unreal
engine for the automotive industry, that was unclear if this also applies
to things like film production, but he made it very clear that if you are
using unreal engine to make games. It will still be free to use, so it
won't be affecting game developers. Now, since he made this statement,
there has been more clarification on who this is going to affect. And in fact, Games From Scratch
reached out to Tim on Twitter, asking if the pricing change
would also apply to filmmakers. And basically, he replied to that tweet,
confirming that there will be a minimum. revenue threshold for commercial
projects, but it won't affect those who are indie filmmakers if you
don't meet those revenue threshold, or if you're a student or educator,
Unreal Engine will still remain free. So basically what this sounds like is,
the per seat license will affect Anyone who is using Unreal Engine, other than
game development, so whether that be the automotive industry, film, VFX,
live events, pretty much it's targeted towards those folks who are using the
engine who are not creating games. However, there's going to
be that revenue threshold. So that means that it's not going
to affect the small creators who are using Unreal Engine unless
you reach that revenue threshold. Also, if you are a student or educator, he
mentioned that it will still remain free. So that is the latest news that
we have on the pricing change. It's not going to affect game developers. Tim actually made that
very clear in his speech. But for all other industries that use
Unreal Engine, it seems like that minimum revenue threshold might be the case. Now, we still don't know what the minimum
revenue threshold is and what the Per seat licensing would cost per person,
but games from scratch basically made a video that breaks down the current Unreal
Engine licensing cost at the moment. So I think I'll link it in the description
below But here is the current license. We have the standard license, which is
the completely free to use Most people just use the standard license Because
you don't have to pay anything at all, but these other licenses, like for
example, this enterprise, you aren't required to purchase any of these,
like if you're a big company or a big film studio, you aren't required
to purchase this enterprise program. Basically, what these other licenses are,
are they include support from Epic Games. So what that means is you can reach
out to them and ask them for help on your project, or you can reach
out and get things like private training, all of this stuff for. I think 1500 per seat per year. So that's what these other licenses are. So most companies, they
don't even need the support. So they will just go with the standard
license, meaning they don't have to pay a dime for using Unreal Engine. So I think this pricing
change is more targeted at. And again, to be completely clear, this
is all other industries that use the engine other than game development. So I think going back to Tim's
tweet, he did mention a revenue threshold and we still don't
know what that threshold is yet. Now what we do know is this
change is coming in 2024. And the only thing right now
that we can do is probably speculate based on what we know. I mean, my thoughts on this is I could
see them having a revenue threshold for say, More than 100, 000 off of a film or a
project that you make, uh, that's targeted for any other industry than games. And then if you meet that revenue
threshold, you'll have to subscribe to some enterprise license that
you'll have to pay per seat per year. Now again, that's me just
throwing out numbers. I don't. Really think this will affect indies
because maybe you make a short film and it doesn't gross over a hundred thousand
dollars And also it's not going to affect people who are learning the engine. I mean epic has always had the We
succeed if you succeed mentality, which means that if you make a certain amount
say for example in the case of games If you make over a million dollars in
revenue only the revenue after that So after the million dollar mark Will
be subject to a 5 percent royalty. So really they only get a cut if
you succeed in selling your game. Now for other industries like film,
automotive, et cetera, they don't really have like a 5 percent royalty setup,
uh, in epics, EULA, as far as I know. So it's kind of been a freebie
for them to use the engine. So it only makes sense that they are. Updating, I guess, the pricing
structure of the engine to accommodate for big companies who are, you know,
sort of using the engine for free. And I mean, the main revenue
source for Epic Games has been the revenue from their game Fortnite. Their game engine profits, or the
money they make from royalties from other studios using their
game engine, is only a fraction of what they make in comparison to... All the revenue they make from their game
fortnite not to mention they took all of that profit and in the past years They
took it all and reinvested it into buying different companies like art station
sketchfab quixel And they basically tried to see if that investment would
pay off in the long run whether that be a boost of more users to the engine And
if that would boost their revenue and profits, but I think they underestimated
it and just try to expand and buy way too many companies all at once. And so now they're sort of,
you know, reevaluating their pricing structure and all that. So to summarize, these pricing
changes are going to be a. per seat license only if you
meet the revenue threshold. Again, this only applies to other
industries that use the engine for anything other than game development. These changes are coming in 2024 and it
shouldn't affect students or educators. The engine will still remain free. Overall, I think this is a pretty terrible
time to announce these pricing changes. I mean, in recent news with all the
Unity pricing changes, which they actually went back and updated those. So I think it's just a terrible
time to change your licensing when you have all these new eyeballs
focused on your game engine. Even if it doesn't apply to the game
developer side, I think it's just not the greatest time to release this news. But yeah, it's going to be interesting to
see where this will all take the engine. I mean, I've been using Unreal
Engine for nearly 10 years now. And all the way back since when
Unreal Engine 4 came out, it was actually a paid subscription. So you had to pay about 20
a month to use the engine. And I've been using it since, and all
the way up until they made it free. They added all these new features,
things like the filmmaking tools, the simulation, all that stuff. So it's really going to be interesting to
see where the engine will be in the next 10 years, whether or not this, uh, Percy
license will work out for Epic, but yeah, that is going to be it for this video. Let me know what you guys think
about this new pricing update down in the comments down below. Like I said, I really only think this
is going to affect big companies or corporations who are using the engine
who really don't owe any royalties or anything to Epic Games because of this
gap in Epic's licensing agreement. But yeah, that is going
to be it for this video. I just wanted to keep you
updated on the latest news. As always, I'll see you
guys in the next video.
