New licensing of commercial game engines mark a shift in the industry

Just two days ago Epic announced that you can use their powerful Unreal Engine 4 with no upfront costs. And a 5% revenue fee is only collected when your gross is over $3.000,- per quarter. This used to be $100.000 per developer seat just a couple of years ago. One day later, Unity announced that they basically give away their engine for free with their personal edition. Only when your revenue/funding exceeds $100.000, you will have to pay. And today, Valve revealed that they will give their Source engine for free for developers. And although the exact licensing terms are a bit vague for the Source engine, it seems they are following Epic and Unity in this trend.

Obviously, this is very good news for (indie) developers around the globe. There are just no entry barriers anymore. It really represents a shift in the business model of commercial game engines. In the last years there has been a steady increase in released indie games. Most not very profitable, but some have become enormously popular, generating a lot of revenue. So it seems that these engines are betting on riding along with these trends. Thereby participating in some of the revenues in the long-tail, but also betting on benefiting from the next big indie blockbuster. Being a part of the ecosystem of the rising indie industry seems to be more important than short-term revenues in this regard.

These are exciting times to be a game developer!