Over the past year or so, Epic Games has been adjusting the way it does business. Much of the company's new focus has been based around a philosophy of helping developers to keep more of the money they make. First was the Epic Games Store, which broke from the traditional 30 percent revenue sharing model in favor of only a 12 percent fee. Earlier this year, the company launched Epic Games Publishing, which followed the same model. Full ownership of intellectual property, possible full funding, and a smaller than normal licensing fee.
This week, the company applied the same general logic to another aspect of its business: Unreal Engine. In 2014, Epic Games made the engine available to the public. The licensing fee was $19 per month and 5 percent of the product's sales. They adjusted that licensing model to only require the 5 percent after revenue of $50,000 and removed the monthly fee. This week, they made an even bigger adjustment. The revenue sharing threshold is now $1 million. This comes at an opportune time, as the company also released the first major demo of Unreal Engine 5.
When combined with the company's existing Epic Games Store perk of no licensing fee for Unreal Engine, there is a lot of potential for game development using the already popular engine. A small game developer could build a game without any licensing for Unreal Engine. They could work with Epic Games Publishing and get funding for the development of the game itself. The game could be released to the Epic Games Store, saving the licensing fee and minimizing the revenue cut. They could use all of the extra profit to then release to Steam, Xbox One, and PlayStation 4, only then paying the licensing fee.
This move is the final piece of the puzzle for Epic Games' attempt to create a complete ecosystem designed for indie developers to thrive. Considering the popularity of some indie titles, it could open a big business for the company - but only if they can attract the developers.