Is Unreal Engine Free? Royalties and Licensing Explained

Yes. Unreal Engine is free to download and use for making games, with every feature included. You only pay Epic a 5% royalty on a game's lifetime gross revenue above one million US dollars, and sales on the Epic Games Store do not count. This guide explains in plain words when the royalty starts, how to work it out, what is free on Fab, and the costs that come from somewhere else.

What is free in Unreal Engine

There is no paid "pro" version of Unreal Engine for game makers. Everyone gets the same engine. As of November 2026, all of this costs nothing:

• The full engine and editor, downloaded through the Epic Games Launcher, including every feature such as Lumen lighting and Nanite geometry.
• The source code, the human-readable code the engine is built from, on GitHub once you link your Epic account.
• Templates, sample projects and learning courses from Epic.
• Making, testing and giving away games. If a game never earns money, you never pay anything.

Epic makes money another way: it takes a share once a game becomes a real commercial hit. That share is called a royalty, a percentage of the money a product earns, paid to the owner of something you used to make it.

How the Unreal Engine royalty works

The rule fits in one sentence: you pay 5% of a game's gross revenue above the first $1,000,000 it earns in its lifetime. Each part of that sentence matters.

• Per game: every game, or "product", gets its own $1,000,000 allowance. Two games each earning $600,000 owe nothing.
• Lifetime: the allowance does not reset each year. Once a game passes $1,000,000 in total, the royalty applies to money above that line.
• Gross revenue: what players paid, before the store takes its cut. For example, a $10 sale in a phone app store means $0.50 of royalty (5% of $10), even if the store keeps $3 and you receive $7.
• Revenue of every kind: game sales, in-game purchases, DLC (paid downloadable add-ons), subscriptions, in-game ads, and crowdfunding money tied to the game all count. It does not matter whether you, a store or a publisher collects the money.

Worked examples: how much would you pay?

These examples use the standard 5% rate and assume each quarter earned at least $10,000 (more on that rule below).

Notice the Steam hit. Players paid $1,600,000, Steam keeps its usual 30% ($480,000), and the developer receives $1,120,000. The royalty is still worked out on the $1,600,000 that players paid. That is why it is wise to set aside a little money from every sale once a game gets close to $1,000,000.

What about the quarter in which a game crosses the line? Say a game has earned $950,000 so far, then earns $200,000 in the next quarter. Its lifetime total is now $1,150,000. Only the $150,000 above the line counts, so the royalty for that quarter is 5% of $150,000, which is $7,500.

What does not count toward the royalty

• Epic Games Store sales where Epic processes the payment. They are royalty-free and they do not count toward your $1,000,000 either.
• Quiet quarters. A quarter is three months of the calendar year. In any quarter where a game earns less than $10,000, no royalty is due for that game.
• Things that are not the game itself, such as T-shirts and other merchandise, paid work you do for others, and money from videos or streams about your game.
• Games that never ship. Learning, prototypes and projects you keep to yourself owe nothing.

Common myths about Unreal Engine's price

• "Epic takes 5% of every sale." No. Only revenue above $1,000,000 per game counts, and only in quarters where the game earns $10,000 or more.
• "Epic owns games made with Unreal." No. You own your game and everything you create for it. The license covers the engine, not your work.
• "The free version is cut down." No. Solo developers get the same engine and tools as big studios.
• "Free assets cannot go in a paid game." Usually they can, but every license is different. Some free assets ask you to credit the creator, so always check.

The 3.5% rate for Epic Games Store launches

Since 1 January 2025, Epic runs a program called Launch Everywhere with Epic. If your game comes out on the Epic Games Store at the same time as, or before, other PC stores, the royalty drops from 5% to 3.5%. The lower rate then applies to revenue from every store and platform, not just PC.

The Epic Games Store also takes no store fee on the first $1,000,000 a game earns there each year, and 12% after that (as of November 2026). Both programs have extra conditions and change from time to time, so read Epic's current licensing page and FAQ before you plan a launch around them.

Release form and royalty reports

The paperwork is light, but it is not optional.

1. Fill in the release form. Before you release a game that will earn money, Epic's EULA asks you to tell Epic through the release form at unrealengine.com/release. It takes a few minutes.
2. Keep simple records. Save your sales reports from every store. You will need them if a game ever gets close to $1,000,000.
3. Report and pay when royalties are due. For each quarter in which you owe a royalty, you report the revenue and pay within 45 days after the quarter ends.

The full legal text is the Unreal Engine EULA. It is long, but the royalty section is worth reading once, ideally with the adult who will sign anything for you.

Is Fab free? Assets, Megascans and MetaHuman

Fab is Epic's online store for game assets: 3D models, textures, sounds, animations and plugins. It replaced the old Unreal Engine Marketplace in 2024. Some of it is free and some is paid.

• Free assets: many listings cost nothing, and Fab regularly makes some paid assets free for a limited time. Once you claim them, they stay in your library.
• Quixel Megascans: on 6 November 2026 Quixel made its whole Megascans library of scanned rocks, plants and surfaces free to claim on Fab again. Quixel says it will stay free this time.
• MetaHuman: Epic's tool for realistic human characters is covered by the normal Unreal Engine license, so it is free for the same projects.
• Paid assets: under Fab's Standard License, the price tier depends on who is buying. The Personal tier is for buyers who earned no more than $100,000 in the last 12 months; the Professional tier is for those above that.
• Free assets with credit: some free listings use a Creative Commons Attribution (CC BY) license, which means you must credit the creator in your game.

Check the license on every listing before you use it, and keep a list of what you used and where it came from. Some listings carry a NoAI tag, which means they must not be used as data for generative AI. Fab's licenses and pricing page explains the tiers in detail.

Costs that do not come from Epic

Unreal is free, but making and selling a game still costs something. Plan for these:

Valve explains the fee on its Steam Direct page. If you want to sell a game, store accounts, tax forms and bank details all need an adult. For online games, our Unreal multiplayer guide covers which services are free.

Unreal Engine for films, apps and school

The 5% royalty is for games and other interactive products that people buy or use. Other uses work differently:

• Students, teachers and hobbyists use Unreal for free, for games and for anything else.
• Films, videos and renders (called "linear content") owe no royalty.
• Companies outside games that earn more than $1,000,000 a year, such as architecture or film studios, need a paid seat subscription. It has cost $1,850 per user per year since 2024; check the current price.
• Non-game apps sold to the public with Unreal code inside follow the same royalty rule as games.

How Unreal compares with Unity and Godot

Godot is open source under the MIT license and free forever, with no royalty at all. Unity has a free Personal plan below a revenue limit and paid plans above it. Unreal is free until a game succeeds, then takes 5% of revenue above $1,000,000. For most beginners, none of these will cost anything for years. Choose the engine that fits your game; our Godot vs Unity vs Unreal Engine comparison helps. If you are ready to start, follow how to make a game in Unreal Engine 5, and see what others built on our Unreal Engine indie games page.