Epic increases Unreal Engine royalty threshold

Even with all the noise and fuss surrounding the AAA launch of Bulletstorm today, Epic Games are still going out of their way for indie developers. The company has just confirmed that they are raising the revenue threshold for developers using the Unreal Development Kit to create their games.

Under the new rules, says Mark Rein, you will not have to pay royalties on your game until you’ve made more than US$50,000. Previously, that number was US$5,000.

Unreal Development Kit - UDK

Now even more appealing for independent developers

Mark continues on the [surl=http://forums.epicgames.com/showthread.php?t=764485]official forums[/surl]:

We’re really excited about folks making some amazing things with UDK and we realize that a lot of you are just started in the business so not having to pay royalties on your first $50,000 should help you get a financial footing toward building a quality game development business.

Mr. Rein is Vice President of the company, and he also took the time to explain a bit about product royalties for first-time developers. He focussed on the fact that retailers – both digital distribution (like iTunes) and brick-and-mortar locations (like game shops) – take a cut of the sale price (typically 30%, according to Rein). The amount of money you get from each transaction – the wholesale amount – does not include this 30%.

When you pay Epic Games royalties for letting you use their engine, you’ll pay a percentage of the wholesale amount, not the price you see in shops or online.

Clear as mud, right?
Short version: If you’ve developed your game using the UDK, you can sell ten times as many games before you have to pay any money to Epic. Hooray!

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