Unreal Engine, developed by Epic Games, has a business model that allows access to the engine for free. Here's a succinct breakdown of how the engine's pricing structure works:
When you download and use Unreal Engine, there are no upfront costs. You can create projects for free and have access to all the features of the engine. This includes both personal and commercial use.
However, when it comes to commercial distribution of products made with Unreal Engine, Epic Games traditionally had a royalty model. For game development, once your game surpasses $1 million in gross revenue, you would owe a 5% royalty to Epic Games on gross revenue after that point. This threshold provides developers with a generous amount of revenue before any fees need to be paid.
For other types of interactive experiences and applications (outside of traditional games), there may be different licensing terms and it’s best to consult the latest version of the Unreal Engine Licensing Terms for specifics, as they can change over time or vary depending on the nature of the project.
It's also worth noting that Epic Games offers custom licensing options for large enterprises or those who prefer not to pay royalties. These details are subject to negotiation with Epic Games and will depend on the scope and scale of the project.
If you're using Unreal Engine for educational purposes, it is completely free; Epic Games aims to support educational initiatives and therefore does not charge educational institutions or students.
To sum up, while the engine itself can be used for free, making money from an Unreal Engine-based product may incur royalty payments or require a custom license agreement.