Quick answer: for games, Unreal Engine is free until a product earns $1 million in gross revenue over its lifetime. After that, Epic takes 5% of the gross revenue above $1 million.
- Most indie games never reach $1 million, so they pay no royalty at all.
- The 5% is on gross revenue, before store fees like Steam’s cut.
- If your game qualifies for Epic’s Launch Everywhere with Epic program, the rate drops to 3.5%.
How the royalty works
Think of it in two parts:
- The first $1 million a product earns is royalty-free. This is lifetime revenue for that product, not per year.
- Everything above $1 million pays 5% to Epic.
The threshold is per product. Two separate games each get their own first $1 million.
A quick example
Your game earns $1,200,000 in gross revenue over its lifetime.
- The first $1,000,000 is free.
- Royalty applies to the remaining $200,000.
- 5% of $200,000 = $10,000 owed to Epic.
At the 3.5% rate, the same game would owe $7,000.
“Gross revenue” means before store fees
This catches people out. The royalty is based on what customers pay, not what lands in your bank account after the store takes its share.
If a store keeps 30% and you receive 70%, the royalty is still calculated on the full 100%. Plan for it when you budget.
The 3.5% rate: Launch Everywhere with Epic
Epic offers a reduced royalty of 3.5% for products that qualify for its Launch Everywhere with Epic program, which is tied to releasing on the Epic Games Store alongside other stores. If a product stops qualifying, the rate goes back to 5%.
The exact conditions matter, so read Epic’s current terms before planning your launch around it.
Some stores have their own deals
Certain platforms arrange their own royalty terms with Epic. For example, Meta’s Horizon Store has offered royalty-free revenue for the first $5 million of sales on that store, for developers who opt in. Check the store’s developer documentation for what applies to you.
Do you have to report anything?
Yes, once your product starts earning, Epic expects royalty reports. The EULA explains when reports are due and how to submit them. Keep simple records of your gross revenue per product and per store from day one; it makes this painless later.
What the royalty doesn’t cover
- Not a per-seat fee for game studios. Games use the royalty model.
- Not affected by how many people work on the game.
- Doesn’t apply below $1 million, no matter how many copies you sell.
FAQ
Do I owe anything if my game makes $50,000?
No. You’re well under the $1 million threshold.
Is the $1 million per year?
No. It’s lifetime gross revenue for each product.
Does the royalty apply to revenue from all stores?
It’s based on the product’s gross revenue, with some store-specific exceptions and programs. Check the EULA and each store’s terms for the details that apply to you.
Do I pay royalties on plugins or assets I bought?
Assets and plugins you buy come with their own licence from the seller. The Unreal Engine royalty is about the product you ship, not the tools you used to build it.
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