'There's no going back' as top game engines race to the bottom

'There's no going back' as top game engines race to the bottom
James Batchelor

By James Batchelor

April 15th 2014 at 3:00PM

Unity warns shift by Epic and Crytek to subscription models is irreversible

Three of the leading engine providers are now locked in a battle for the attention of small developers as new subscription models have brought them into direct competition.

At last month’s Game Developers Conference in San Francisco, Epic Games announced its Unreal Engine 4 is now available to all devs for just $19 per month – a move targeted at everyone from indie studios to “high-end Minecraft players” looking for a new creative outlet.

Shortly after, Crytek revealed its own CryEngine would be available for a monthly subscription of just $10.
Both business models bring Unreal Engine and CryEngine closer to Unity’s long-established offering of free technology for all developers. But, speaking to Develop in San Francisco, Unity CEO David Helgason was unfazed by these manoeuvres.

“Competition is interesting – it keeps things challenging, and it’s great for the customer,” he said. “The price of engines have been coming down a lot in the last year, and I think we drove a lot of that. It’s interesting that all the engines now have these very flexible low-priced models.”

However, the Unity boss did hit out at Epic’s royalty clause, which states that any Unreal Engine subscriber must pay back five per cent of any gross revenues generated through their games, whether that’s through sale price, in-game ads or microtransactions.

“Five per cent doesn’t sound daunting but what people often don’t realise is that many pretty good businesses only have ten to 15 per cent margins, so that could be pretty heavy on a company,” Helgason said.

“We really want to focus on helping them get extra revenue via things like Applifier and game ads. It’s better to have additional revenue than to be charged for it.”

EPIC CHANGES

Also at GDC, Epic Games co-founder Tim Sweeney told Develop that the royalty condition is not as sinister as people think, and that the Unreal firm will only benefit if developers do.

“We’ve built this model so that, with the royalty structure, we’re only going to succeed with this business if the companies that use our technology succeed with it themselves,” he said.

When asked how he felt now that his company had positioned itself as a closer rival to Unity, Sweeney said:
“We’re really impressed with the business Unity has built and the community they’ve developed around their products and services.

“Everything from the Unity Asset Store to the huge variety of games people are building with it – we’ve certainly drawn inspiration from that, and I really look forward to building on that and how Epic can go even further with an open development model, giving any developer all of the advantages we have when building our games.”

Commenting on the additional competition from CryEngine, Sweeney said it was inevitable that high-end tech would become more widely available for a lower price.

“The world’s changed,” he said. “Last generation, it was all about huge teams doing triple-A games development and other big projects. But now the indies are really taking over the world.

“You now see projects and teams of all sizes, often run on their own merits; it reminds me a lot of the shareware days where I started out in 1991. New distribution channels like the App Store and Steam have really democratised games development to the point where it’s simple, pure and driven by developers again.”

NO TURNING BACK

These announcements represent an irreversible shift in the engines markets, with the focus now primarily on making tech available for as low a fee as possible.

“We realise this is a permanent decision we’ve made about the future of Unreal Engine,” said Sweeney. “When a company grows more generous over time, everybody loves them, and when a company becomes stingier over time, they’re hated.

“But you know what? Since 1994, we’ve been doing licensing deals with companies throughout the industry where they get access to the game engine. Major triple-A developers and publishers have signed up for deals that involve paying royalties for the engine, and we think that’s the best way to build really good, long-term, enduring partnerships.”

Helgason adds: “There’s definitely no going back. We went to free and freemium four-and-a-half years ago, and we’ve been very happy with that model. Now people are following that. It’s not unexpected – I don’t know any industry where the pricing goes up.”