Big publishers/game developers just negotiate a custom contract. But yes in general UE is more expensive then Unity but it also comes with a bunch of useful stuff like quixel mega scans for free if you are using the engine.

https://www.unrealengine.com/en-US/license

Not even big; I am aware of indie studios having unity source. It's not nearly as expensive as you might expect, but I'm not able to give hard numbers. :)

To underscore the sibling comment: at the point where a "% of revenue is millions of dollars" the company can easily afford to invest in an in-house solution if it's that important for their revenue goals. The tradeoff is hiring a sufficient number of skilled game engine programmers to make that work. It's not cheap.

They don't even need to do that. If they are large enough where it would become millions there is a different license for them that they can negotiate with Epic.

Note: it doesn't have a royalty

This is what CD Projekt Red did?

Just guesswork here, but I think they have an agreement that is cheaper and also includes CDPR engine developers contributing code back to UE that makes it better to use for open-world games.

In the UE5 Keynote it seemed more like a technical partnership than just CDPR licensing UE5 for a price.

Also it is not just making a game engine but you also have to build some kind of a editor, script/animation tooling, plug-in support, etc.

Basically if you are big enough that you can make your own engine the engine also has to be usable by non programmers making the actual content for your game.

Tools can be nearly as important as the engine. I've read several postmortems where the lack of good tools made the asset creation and testing pipeline take way longer than necessary, leading to delays and crunch to compensate.

Tiger Engine that Bungie uses in Destiny supposedly took hours to rebuild a level and didn’t do incremental builds or cache so fixing that one bad light on the map was potentially days of wait.

Still better than earlier versions of Frostbite Engine from EA Dice that took week if no cache was present and ran on server farm that took raw assets together with metadata and spit out final game assets.

>>U nreal licensing is crazy compared to Unity. A % of revenue is millions of dollars potentially

Sure but how many studios reach that level? And wouldn’t you agree that by then, having to pay that share of revenue would be, as the saying goes, “a great problem to have”?

IMO it makes more sense to focus on developer productivity because that drastically increases your chance of reaching those revenue numbers.

It's actually much better for indie developers because it's completely free to build and ship something and see if market wants to before worrying about subscription costs etc like in Unity.

You only pay for Unity if you already have >100K in annual revenue.

For Unreal from thier website - "A 5% royalty is due only if you are distributing an off-the-shelf product that incorporates Unreal Engine code (such as a game) and the lifetime gross revenue from that product exceeds $1 million USD; in this case, the first $1 million remains royalty-exempt." - much better than Unity's pricing. The > 100k annual only give you Unity Personal whereas you can full powered Unreal at much greater threshold.

https://store.unity.com/compare-plans https://www.unrealengine.com/en-US/license

Oh, I thought you were saying that you couldn't build something in Unity to test the market without paying for it.

So it looks like there is a break-even point in revenue per developer above which Unreal is more expensive. The question is how often studios hit that.