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Licensing and Royalty FAQ

Last Updated: Apr 13, 2018 04:12PM EDT
  1. How much do I have to pay for Unreal Engine 4?
    • UE4 is free to use, with a 5% royalty on gross product revenue after the first $3,000 per game per calendar quarter from commercial products. Read the EULA FAQ for more details. Contact us if you require custom terms.
  2. Are my royalties calculated from my gross or net revenue?
    • Royalties under the EULA are calculated based on gross product revenue.
  3. I’m a consultant. Do I owe royalties on consulting fees?
    • No.
  4. How often do I have to report and pay royalties?
    • Royalties are reported and paid on a calendar quarterly basis, and are due 45 days after each quarter end.
  5. Do I need to report royalties forever?
    • No, you only need to report royalties when you are making more than $3,000 per quarter from your product. If your game no longer is being sold, or no longer makes that amount of money, no royalty reports are due.
  6. Do I have to pay royalties if my game is free?
    • No royalties are owed when there is no revenue.  But in that case, free doesn’t just mean no up-front payment, but also no in-app purchases, ads, or other kinds of monetization.
  7. Do I have to pay royalties on downloadable content, in-app purchases, microtransactions, virtual currency redemption, and subscription fees, as well as in-app advertising, and affiliate program revenue?
    • Yes, all such product revenue is subject to a royalty.
  8. Do I have to pay royalties if I use UE4 to create a physical good that is not a game?
    • No royalties are owed on physical goods that do not contain embedded information (such as QR codes) which affect the operation of a UE4-based product.
  9. Can I create Unreal Engine 4 videos or streams and use them to generate YouTube ad revenue or Twitch donations?
    • Yes. You can earn advertising revenue or Twitch donations from Unreal Engine 4 videos and publish to YouTube. No royalty is owed on this revenue.
  10. What if my product obtains crowdfunding via Kickstarter or another source?
    • Royalties are due on revenue from Kickstarter or other crowdfunding sources when the revenue is actually attributable to your product. For example, if the user is required to purchase a particular funding package to obtain access (now or later) to your product, or if that package gives the buyer benefits within the product such as in-game items or virtual currency.
    • Here’s an example of what we mean by “attributable”: Assume you provide two tiers of offers, a signed poster for $20, and a signed poster plus game access for $50. No royalties are due on ancillary products like posters, so no royalty is due on the $20 tier. On the $50 tier, the user is paying for the poster with a $20 value, and that implies that the remaining $30 of value is attributable to the product. So, for each $50 tier sale, you’d pay a royalty of $1.50 (5% of $30).
  11. If I’m being paid to use UE4 to create a visualization of a future product do I owe royalties?
    • If your work is unique, custom, work-for-hire for a single customer, where that work is directed by the customer, then no royalties are owed on the work-for-hire fees.
  12. What if my project wins cash awards?
    • You do not have to pay royalties on award winnings.

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