UDK Royalty Threshold Raised to US $50,000.00

Jesse Moody

http://forums.epicgames.com/showthread.php?t=764485

Taken from the epic boards posted by Mark Rein himself:

Hi folks,

We just wanted to let you know that we've raised the revenue threshold for UDK. Under the new rules you are not required to pay royalties on revenue earned from the use of UDK until that revenue exceeds US$50,000 which represents a 10-times increase over the previous threshold of US$5,000.

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.

One thing some folks didn't seem to realize is that whether you sell your product through digital distribution (or a retail location) the company doing the sale to the end user (called the "retailer") takes a cut (typically around 30%) for their efforts. The price they sell it for is called the retail price. The amount of money they pay to you on each sale is called the wholesale amount. When you pay us royalties you pay on the wholesale amount, i.e. the money you actually receive.

Here are links to some examples that illustrate how UDK royalties work.

UDK Pricing Example 1.jpg

UDK Pricing Example 2.jpg

HonkyPunch

rasmus

woot

salman_fas

Now that's Epic

needs glue

Great news for everyone, look forward to seeing the results.

crazyfool

Thats awesome news, look forward to seeing more devs take on UDK now. It was a massive deterent before having a large amount of your wholesale profits going so early on after apple take their share etc. really good news

d1ver

I love you, Epic

fearian

That is just lovely

eld

It's nice that they raised it, but $50,000 can still be reached quite fast if we're talking a small sized team above just one man.

So within a few months of sales (considering the cost of the operation) you will be paying royalties, which means you'll lose 30% of your income after apple has had its way with it up til the day you stop using UDK.

So in the end, it's really nice of them, but in a bigger scope it doesn't change much at all since it's still not a per game basis.

conte

phoenix(small and middle gamedev) revives?
great news!

eld

perna wrote: »

Good news for small devs.

eld: Yes, it can be reached relatively fast, but they're only royalties.
You're not losing 30% of your income, you're investing 25% wholesale in UDK.
It wouldn't be reasonable to expect Epic to give you the engine for free and let you use it without any royalties.

What you're saying assumes that you're making ok money off of your product, and if you are, then the royalties are a reasonable part of the equation. You have to spend money to earn money; there's no way around that.

The $50k limit is there as an incentive for businesses to get started, not as some money-saving bonus in the long run.

Sorry, mixed up the numbers, meant 30% for apple and 25% for UDK.

I'm just wondering if it's really worth the 25% royalties in a marketplace where the choice of engine will not impact the sales as heavily as making a product that sells.

And as in the words you choose, you're not losing money, you're adding to the price, and that price will be higher than what competitors are putting on their similar products.

gauss

Given that I'm working on a UDK project (yeah yeah like everyone else here) this is very, very good news. Epic knows how to ever more fully cement their market share with both players and developers--this is good news.

Jesse Moody

You gotta think too. You don't HAVE to release on iOS devices only. You can release on PC as well.

Using UDK for PC and it's feature set blows away those of anything else in this price range.

You are getting a million dollar plus engine for super cheap up front. You spend your money making your game and if it tanks and you don't make anything than you aren't neck deep in debt for the rest or eternity.

It should help Indie Devs a ton and hopefully give hope to new start ups or guys that someday want to start something up.

eld

I don't disagree, UDK is amazing, and any experienced team will know what they're getting themselves into, especially if everyone is already used with the unreal technology. It becomes an obvious and very good choice.

For newcomers and 1-2 person teams though I wouldn't recommend it due to the fact that you can't even begin to utilize the things that makes it a more powerful tool than all the others, or even compared to writing your own simple game from scratch.

But especially when most still think it applies per game, Epic doesn't front that detail very much.

Richard Kain

This is especially good news for individual developers. You can make a decent living off of $50,000 annual. Being able to go up to that limit before needing to pay royalties is very good news.