So you want to make an Indie Game. You’ll need a game engine to power it. You could write your own, but that may not be your passion (and it will cost you far more in development time). You could use a free open-source engine, or you could purchase a commercial game engine. For this article, we’re going to focus on the commercial engines, namely the two most popular engines: Unity and Unreal Engine 4.
Both engines have different cost structures based on your game’s gross revenue. I’m going to try and break it down here in a simpler format. This is not financial advice, and I offer no warranty that my numbers are 100% correct. No lawsuits, please. The goal here is to help you make a decision based on some projections of what your game may earn, and therefore cost you in terms of engine fees. Everything stated here is in US Dollars, your mileage may vary.
Unity offers three tiers of product: Free, Plus and Pro. I’m going to ignore Free for this article. The Free version costs $0 (duh), and is a great prototyping tool, but I’m assuming that when you release your game you will want to remove the ‘Made With Unity’ splash screen which requires stepping up to one of the other tiers. Plus costs $25 per month (when prepaid for a year) and Pro costs $125 a month.
The main difference between Plus and Pro, as far as I can tell, is the level of support provided and access to greater multiplayer hosting benefits for Pro. For most indie games, I’m assuming the lower cost Plus is sufficient but will include both tiers on the charts that follow. Note that you are required to use Pro if your game earns more than $200,000 annually. Should that occur, I’m sure you’ll be happy paying a little extra for Pro.
Also note that Unity fees are structured per-seat. Meaning, if you have a small team of four developers using Unity, you must multiply your Unity license fee by 4. Unity terms of service do not permit co-mingled license types, so if one user requires a Plus or Pro license, all team members must use the same license tier. I’m not sure how well that can be enforced, so let’s just assume you’ll be honest about it. 🙂 Details
Unreal is a little more straightforward. The engine is free, provided your game earns less than $3000 per quarter. For all revenue above $3000, you’ll owe 5% in Engine royalties. Royalties scale with revenue, so the more you earn the more they earn. This 5% royalty is waved for games sold through Epic’s own store, since they already collect a store fee for each sale. For VR developers, the deal is a sweeter still. VR games sold through the Oculus store can earn up to 5 million in Gross Revenue before owing any engine royalties. Details
Revenue in these cost structures is Gross Revenue, or the actual money paid for your game by your customers. Not the money you earn from the sale after store fees. For example, if you sell your game in an online store for $10, and the store takes a 30% fee, the net revenue you’ll actually receive is $7. However, your Gross Revenue was the original $10, even though that full amount never landed in your bank account. For the Unreal and Unity license terms, they’re talking about the full $10 charged to the customer when calculating fees.
Costs based on game sales
So how do the costs break down for these engines? Here’s a basic chart showing your game’s annual sales across the bottom (in thousands of dollars. lucky you) and the engine costs along the side, in dollars.
First of all, a couple caveats: This chart is based on annual gross revenue. Unreal is charged quarterly, and Unity monthly. So what gives?
Unity is actually a yearly cost. Although they charge monthly, each user is locked in to a 12 month contract – so you might as well just consider it an annual cost, at least for your first year. In fact, the chart above is based on the discounted fee if you prepay the full year up front. Since you are locked in for 12 months, this is certainly the best option if you can afford the full payment up front.
Unreal charges quarterly, but for this comparison we’re also considering this an annual cost, so it takes $12,000 in yearly earnings before you’ll owe a royalty. In reality, that’s not strictly the case. If you have one strong quarter over $3000, you’ll still owe a royalty for that particular quarter.
So what does the chart tell us? Well, obviously Unity is a fixed cost, and Unreal scales with the success of your product. There are a couple interesting cross-over points, though. Your game will need to earn $18,000 annually before Unreal becomes more expensive than Unity Plus, and $42,000 per year before Unreal becomes more expensive than Unity Pro.
And keep in mind that’s only for one seat of Unity. If you are a small team of developers, those cross over points are much higher. The benefit for teams using Unreal is that their royalty is charged per game title, while Unity is a subscription fee per user. For example, let’s say you’re on a team of four developers, and you’re an honest business that wants to follow Unity’s rule of one seat per user, all at the same tier. Your game would need to earn $36,000 in order for Unity Plus to be the more cost-efficient choice, and $108,000 before Unity Pro was the wiser option. Anything less in sales and you’d save money by using Unreal.
But my game will earn millions!
No, it wont. Let’s be honest. Indie games are becoming a dime a dozen. I’m sure yours is very nice, but a break out hit earning more than $50,000 per year is reserved for only a few indie titles each year. The real breakout hits. Meanwhile, more than 500 games are added to stores like Steam every month, and earn far less. This blog post, The Indie Post-apocalypse, shows the trend in new indie games is increasing dramatically each year while typical earnings per developer keeps dropping.
If you have released indie games in the past, you probably know what to expect from your game sales and can choose the best engine based on your projected revenue. For new developers, you need to do a little guesswork. Thankfully, No More Robots’ Mike Rose gave a little insight on this in his 2018 GDC talk on the subject. Based on the sales of all games on Steam last year, the median indie developer made $250 in their first month, and $625 in the first year of sales, based on figures from the start of 2018. So where does that fit on our chart?
Well, that’s a bit of a wake up call. You didn’t even make it to the first tick ($1000) in annual sales. At a rate of $650 per year, even a single seat of Unity Plus would take nearly half your gross revenue away. In fact, after removing the store fee (typically 30%) and the Unity license, you’d be left with $155 net income for the year. Congratulations on your mediocre success.
On the plus side, Unreal engine would have been free. In fact, you could have 10 times the revenue in game sales and the engine would still be free. Your net income for the year is now $455 after store fees. Still not great, but definitely better than if you had chosen Unity.
But my game is better than the median title on Steam!
Ok, that’s probably true. My own game, Skyling: Garden Defense, has done better than those sales numbers in most stores, and it’s definitely not a contender for game of the year (but it is fun. go buy it). Frankly, there is a lot of crap in most game stores pulling the average earnings down. If we ignore them in our sales projections, things do improve.
Mike Rose provides an estimate for sales of more polished games as $12,500 in the first month and $31,250 annually. That’s still very optimistic, IMHO. I can tell you my titles are nowhere near that income level, but I’m just a solo hobby developer. If you put together a team of artists and programmers to produce a polished game, let’s assume you can hit that figure. So where does that leave us?
Congrats on your hit! You pulled in $31,250 in gross revenue. If you used Unreal, you owe them about $963 for the year. Or, if your team of (let’s say) four used Unity Plus, you pay $300 x 4 = $1200 for the year. Unity Pro would have run you $6000 total for the team, nearly 20% of your gross income. Unreal was still the wiser choice, all things being equal.
So indie developers, especially bad ones, should use Unreal, right?
Well, yes. If cost is the only factor. You are more likely to keep more of your earnings using Unreal as your game engine than Unity’s Plus or Pro tiers. This is even more true as your team size increases, given Unity’s cost per seat. However, for a solo developer or a team of two, Unity can be the more cost-efficient solution for a hit game that can pull in decent sales. The risk is that if your game is a flop, you still owe Unity a year of subscription fees. Unreal only charges you after your game produces reasonable income, so it can be seen as the safer bet.
But there is a lot more to consider. We’ve based our projections on just one game. Can your team make more in a year? Then Unity starts to get more appealing. What about the engines themselves? Is Unreal or Unity the better choice for you or your game? They do have significant differences, after all.
As an example, I’m currently prototyping my next game in Unity. Why? Because I enjoy their tools, and my game relies on a feature (ArrayTextures) which Unreal does not currently support. I also find Unity to be easier to tinker with, given the sheer number of websites and YouTube tutorials that exist for Unity. Unreal is certainly catching up, but you’ll find more resources for learning Unity right now than any other engine on Earth.
You ignored lots of other engine options!
Yes, I did. This post was just to compare the top two popular, commercial game engines. There are more available, like Game Maker, Lumberyard and Cryengine. In fact, my game Skyling: Garden Defense was made in Game Maker v1.4, which cost about $500 for an unlimited license at the time. I used it over a period of several years to release games on multiple platforms, so that one-time payment was very cost-effective for me. The latest version of Game Maker no longer offers this as an option. There are also completely free, open-source engines like Godot that definitely deserve a minute of your time to consider.
Just get out there and make something. It’s worth it, even if it doesn’t produce an income.