The Big Question

When you see the breathtaking graphics and immersive worlds created with Unreal Engine, it's easy to assume such powerful technology comes with an equally impressive price tag. After all, Unreal Engine powers everything from AAA video games to Hollywood visual effects and architectural visualizations with stunning photorealistic quality. This naturally leads many developers, students, and creators to ask: Is Unreal Engine actually free to use?

In this comprehensive guide, we'll provide a clear answer to this question, covering everything from downloading the engine to understanding the commercial terms, royalty structure, and common points of confusion. Whether you're a student, indie developer, or professional studio, you'll get the definitive information you need about Unreal Engine's costs in 2024.

The Short Answer: Yes, Unreal Engine is Free... But With Conditions

Yes, you can download and use Unreal Engine 5 (UE5) completely free for learning, experimenting, and even developing most commercial projects without any upfront costs.

However, there's one critical condition: royalties are due to Epic Games after your product achieves significant commercial success. This "success threshold" is the key to understanding Unreal Engine's unique approach to accessibility and fairness.

Deep Dive: Understanding the Unreal Engine Royalty Model

The Core Rule

Unreal Engine operates on a straightforward royalty model: developers pay a 5% royalty on gross revenue generated by products made with the engine, but only under specific circumstances.

The Threshold: $1 Million

The most important detail is the revenue threshold: royalties are only due after your product exceeds $1 million USD in gross revenue. This means your first million dollars per product is royalty-free—a significant advantage for indie developers and smaller studios.

What Counts as "Gross Revenue"?

Epic Games defines gross revenue as the total income generated from your product before any deductions. This includes:

• Direct sales of your game or application
• In-app purchases
• Subscription fees
• Advertising revenue directly related to the product
• Any other monetization specifically tied to the product

For the most current and detailed definition, always refer to Epic Games'official EULA for the exact terms.

What Doesn't Trigger Royalties?

Several important uses of Unreal Engine are exempt from royalties, regardless of revenue:

• Linear media productions: Films, TV shows, commercials, and architectural visualizations
• Consulting work and work-for-hire using UE
• Many educational uses, particularly in institutional settings
• Any product generating revenue below the $1M threshold

Simple Examples:

IMPORTANT ACCURACY NOTE: Based on Epic's current terms (as of May 2024), once your product exceeds the $1M threshold, the 5% royalty applies to the entire lifetime gross revenue, not just the amount above $1M. Always verify the current terms on the official Epic Games EULA before making commercial decisions.

What About "Free" Marketplace Assets & Quixel Megascans?

Many developers wonder if "free" extends to the vast library of assets available through the Unreal Engine ecosystem. This is an important distinction to understand.

Marketplace Assets

The Unreal Engine Marketplace contains thousands of assets, many of which are labeled as "free." However, "free" in this context means:

• You can use these assets without additional payment within Unreal Engine projects
• Most free assets cannot be exported for use in other engines or external projects
• Each asset has its own license terms that exist separately from the engine's royalty model

Always check the specific license for each marketplace asset you use, as terms can vary.

Quixel Megascans

One of Unreal Engine's biggest value propositions is free access to the entire Quixel Megascans library—a collection of thousands of photorealistic 3D assets, materials, and textures. Important points to understand:

• All Megascans assets are free to use in Unreal Engine projects
• Using Megascans assets in other engines or software may require a separate subscription
• This represents enormous value for Unreal Engine users, potentially saving thousands in asset creation costs

Are There Any Other Costs Associated with Using Unreal Engine?

While the engine itself may be free to download and use (subject to the royalty model), there are other considerations that impact the total cost of development:

Hardware Requirements

Unreal Engine is powerful, which means it needs powerful hardware to run effectively:

• CPU: Modern multi-core processor (8+ cores recommended)
• GPU: Dedicated graphics card with 8GB+ VRAM for optimal performance
• RAM: 16GB minimum, 32GB+ recommended
• Storage: Fast SSD with 100GB+ available space

These hardware requirements represent a significant indirect cost, especially for teams.

Paid Marketplace Assets/Plugins

While many marketplace assets are free, premium assets can range from a few dollars to hundreds:

• Character models: $20-200+
• Environment packs: $50-300+
• Special effects: $15-100+
• Advanced plugins: $50-500+

Team and Training Costs

For commercial projects, consider:

• Developer salaries/contractors
• Training and learning resources
• Production tools and software

Epic Games Store Distribution

If you choose to distribute your game through the Epic Games Store, note that this involves a separate revenue split (currently 88/12 in favor of developers), which is distinct from the engine royalty.

Who is Unreal Engine Free For? (Different Use Cases)

Unreal Engine's accessibility varies slightly depending on your use case:

Students & Educators

• Completely free to download and use
• No royalties for educational projects
• Special programs and resources available through Unreal Engine Education

Hobbyists & Indie Developers

• Free to download and experiment with
• No royalties until $1M in gross revenue
• Full access to all engine features

Large Studios

• Free to download and develop with
• Subject to the standard royalty model after $1M per product
• Enterprise licensing options may be available for specific needs

Filmmakers, Architects, Automotive (Non-Interactive Content)

• Generally royalty-free for the engine use itself
• Pay only for specific assets or plugins as needed
• Benefit from increasingly specialized industry tools

Brief Comparison: How Does UE's Model Compare?

To put Unreal Engine's licensing model in context:

• Unity: Has moved toward a per-installation fee structure for larger developers, while maintaining a subscription model for smaller teams
• Godot: Completely free and open-source under the MIT license with no royalties ever
• CryEngine: 5% royalty model with no upfront costs, similar to Unreal

Unreal's approach balances accessibility for beginners and small developers with sustainable revenue from successful commercial projects.

Conclusion: Free to Start, Powerful Potential

Unreal Engine truly delivers on its promise of being free to download and use, making cutting-edge game development technology accessible to everyone from students to indie developers to major studios. The cost comes only after you've achieved significant commercial success—when the 5% royalty kicks in after your product crosses the $1M threshold.

This model democratizes access to professional-grade development tools while ensuring Epic Games can continue investing in making the engine better. With Unreal Engine 6 on the horizon, there's never been a better time to download UE5 and start exploring its vast capabilities.

Remember: Always refer to the official Epic Games EULA for the definitive license terms before publishing any commercial product.

Frequently Asked Questions

Do I pay royalties if my game is free-to-play with ads or in-app purchases?

Yes, if your free-to-play game generates over $1M in gross revenue from ads, in-app purchases, or any monetization method, the standard 5% royalty applies.

Is the $1M threshold per year or lifetime?

The threshold is per product lifetime, not annual. Once your product exceeds $1M in total gross revenue, royalties apply going forward.

Do I need to pay royalties if I use Unreal Engine for client work?

Generally no. Consulting and work-for-hire projects using Unreal Engine typically don't trigger royalties for the developer. The end client may be responsible for royalties if they commercialize the product.

Is Unreal Engine 4 still free under the same terms?

Yes, the royalty model generally applies to both UE4 and UE5, though the focus has shifted to UE5 for new projects and ongoing support.

Can I use free Marketplace assets in a commercial game?

Yes, you can use free Marketplace assets in commercial projects within Unreal Engine, subject to each asset's specific license terms.