In 2015, Epic surprised the game industry by dropping the monthly charge for its incredibly popular game engine and giving it away to anyone who wanted it: hobbyists, scientists, artists, architects, game makers.
It was a gamble, but not one based on just a gut instinct — and perhaps it was a gamble prodded along by Unreal Engine’s long-running competition with Unity and its own significant price drops. Tim Sweeney knew that Epic's 2014 decision to drop the typically upfront high cost of licensing a game engine and charge a monthly subscription fee instead had resulted in a spike in Unreal Engine use.
This second, bigger bet paid off too.
“Last year was our best engine year ever,” Sweeney says. “By a significant margin.
“Anybody who downloads the engine uses it under a standard license, which is a five percent royalty. But you can also talk to us and if you're going [for a] large-scale project — we have the ability to develop custom terms which typically involve negotiating a lower royalty in exchange for paying some money upfront.”
“Last year was our best engine year ever. By a significant margin.”
A limited form of Unity was made free prior to Epic’s announcement of a subscription approach to the engine. Following that move, Unity’s engine become completely free to developers making less than $100,000, and after that there is a flat fee.
Despite the competitive back and forth, it couldn’t have been an easy decision to make: essentially throwing away all the established fees on the chance that royalties would make up the difference.
The Unreal Engine, while maybe not as well known by players as Epic’s games, has always been the safety net for a company that likes to reinvent itself every half decade or so.
“The engine has been a stabilizing factor,” Sweeney says. “This technology and having so many partners. If we didn’t have the engine, we would have died. We would have died three times.”
For Epic to work, Sweeney says, it has to build games that make its engine better and release new versions of the engine, which allows it to make better games.
“The company has always been built on the synergy between developing games and technology,” he says. “The complexity to the technology we build is so high, it will be insane to try to build it and separate it from any game business, and we're always trying to push forward with the absolute capabilities of the hardware. I think that's what's defined Epic also historically.”
Fortunately for Epic, it turns out that making a 3D engine that anybody can download for free opened up a lot of doors for the company, doors even it didn’t realize existed.
“The Unreal Engine community were tight knit in the past,” Sweeney says. “Super hard core AAA developers used it to build major games and we knew that market well. There have proved to be a huge number of indies who are incredibly talented and even come from AAA backgrounds, many of whom are getting started for the very first time and are doing amazing things that would have traditionally flown under our radar.”
Ark: Survival Evolved
Take Steam megahit Ark: Survival Evolved, for example. The team behind that dino survival game was able to build an early version of the title in less than nine months using Unreal.
“It's made vast amounts of money for them and for us too,” Sweeney says.
While Sweeney says Epic knew that making the engine free upfront would attract a community of indie developers, what the company underestimated was how many of those developers would actually succeed at making awesome things.
“Ark is a real phenomenon and they weren't the only ones,” he says. “Rocket League has been heavily successful using Unreal engine. Psyonix, these awesome developers we've known for a long time, their company was in trouble and they had a small amount of time to make a game so they could pay their bills. Of course they did the logical thing, which was to build a soccer game that you play with cars, and it worked.
“There [is] an astonishing set of titles being built from the best and brightest in the industry. They are getting together and building larger teams and making bigger and better things than we could have ever expected in previous years.”
“It's made vast amounts of money for them and for us too.”
Kim Libreri, Epic Games chief technology officer, says that the bigger impact of the move to an engine that earns money through royalties is twofold: Developers have one less thing to pay for when they’re getting started, and those game-making dreamers in established studios see the successes and the low points of entry and decide it’s time to go out and do their own things.
“[Unreal Engine 4] is so easily accessible now that people that work at AAA studios and have a bunch of mates that they think are awesome can basically quit their jobs and, in a small amount of time, build something awesome and I think it gives them that belief,” he says. “They look at Rocket League and they look at Ark and think, ‘Wow, that could be us, too.’ Really kickass developers are like, ‘Screw it, I've always wanted to have my own games company’ and they get together and they make something amazing really quickly.
“It eliminates the sort of conservatism that forces people to paint within the lines in a more contained environment.”
The timing seems fortuitous for a move to a royalty-only engine, but Sweeney says the company has been talking about doing this for nearly a decade. It took them until 2015 to finally roll out the idea because there was so much proprietary licensed code in the engine that they couldn’t give it away.
So instead, the indie revolution sparked with the help of a nurturing Unity Engine. Originally launched in 2005, Unity quickly became beloved by the indie game development scene because of its cross-platform support and low cost of entry. It wasn’t until now that Epic’s Unreal Engine seemed to be in the position to offer its own support to those up-and-coming game makers.
It’s clear that competition between Epic and Unity has helped everyone who uses either engine, both in the realm of available tools and cross-platform compatibility and in the cost of using those tools.
As entwined as the Unreal Engine is in everything that Epic does, it should come as no surprise that the studio sees it as one of the supporting columns of the company. It has evolved, even, past the role of safety net and now leads Epic’s move well beyond gaming into, essentially, everything.
“95 percent of all these different applications’ needs are the same thing.”
During last month’s Game Developer Conference in San Francisco, Epic hosted a panel about its engine and its uses outside gaming. The talk included NASA speaking about its use of the engine to create a sort of real-world holodeck, Walt Disney announcing plans to use the engine to create a Star Wars-themed experience for its theme parks and high-end British car manufacturer McLaren Automotive showing off how vehicle design and even sales are helped by the engine.
And that doesn’t touch on the Unreal Engine’s growing importance in the production of both feature films and television shows, including live shows.
The future, from Epic’s perspective, is Unreal.
Sweeney likes to explain why the Unreal Engine is used beyond games by pointing out just how similar the needs are for game development, architecture, vehicle design, film creation and, yes, even holodecks.
“You know 95 percent of all these different applications’ needs are the same thing,” he says. “They all need photorealistic graphics, rendering, environments and then a great authoring tool and pipeline to link them all together.
“What’s left is a five percent difference. Like architects need the ability to import data from AutoCAD, while designers, like auto engineers, need tools to produce their extraordinary high level of detail in real time. So there's a little bit of specialization but we're approaching this as one business, and not ‘how would an automobile empire look at this?’ It’s not 20 different segments. No, no, no, no, there are no market segments here. It’s one engine, one technology, one editor, one code base.”
And while the game industry has always been Epic’s bread and butter, it is minuscule when compared to the rest of the industries that could use Epic’s tools. Sweeney points to Autodesk, a multinational software company with revenue of more than $2.5 billion in 2014. It makes software for architecture, engineering, entertainment, construction and manufacturing industries. And even for the game industry, Maya is an incredibly popular 3D animation software tool, but Sweeney points out, gaming only counts for 10 percent of the company’s business.
“There's this giant set of people using 3D tech for real-world uses and that's all moving to real-time technology,” he says. “The really exciting thing here would be the interplay between the games industry and these other industries.”
VR is the stepping stone
I stand under a weathered stone archway, antlike in its looming presence. Through the archway I see a stone effigy to a bulbous, grey robot, its Popeye arms held akimbo as if in mid-stride. I turn my head to the left and see a stone edifice crumbling under a bright, blue sky mottled with cotton-ball clouds.
Beneath me I see the massive slabs of stone that make up the entrance, cobbles so big they could be used to form the sides of a house.
It’s not that the setting is big. It’s that I’m tiny, about the size of an insect.
I click an invisible button and a pair of stubby batons appears floating in front of me. With a quick adjustment, I grow to the size of a human and then flick open a menu on the top of one of the controllers. Pointing the second controller at it, I scroll through a selection of weathered stone columns and then select one with a click.
Outside of the VR experience, but still inside virtual reality, I spend 30 minutes fussing with the location: using the controllers to Spider-Man my way around the scene, shrink, rotate, enlarge, add and delete objects. The world is taking shape around me as I build it.
“Mark Rein was always on my ass. 'Dude, you gotta get that into VR!'”
Finally, running out of time with this build of Epic’s Unreal Engine VR editor, I slip the HTC Vive mask from my face and blink in the dull light of an overcast day which falls through the nearby office window.
Building virtual reality inside virtual reality is less like visiting the chimerical spaces of Inception and a bit more like being at the center of your own little universe, literally.
The experience, on the surface, feels much more like playing than it does working.
I point this out to Mike Fricker, the technical director on the Unreal Engine team, and he agrees.
“We set out to build fun and intuitive VR world-building tools,” Fricker says. “That’s an unintended benefit.”
The decision to design a way for people making VR games to stay in VR while making them was born as a way to help the Bullet Train team on its work in that VR shooter, Fricker says.
But the concept and the desire for the VR in the VR editor has been floating around inside Epic ever since the first VR headset made an appearance at the company. That traces the original process of moving the engine into VR back about two years.
“Mark Rein was always on my ass,” Fricker says. “'Dude, you gotta get that into VR!’ He was like asking for it maybe three or four years ago, but it was two years ago that we started doing some prototypes where we realized that the engine can handle it.”
Epic designed the Unreal Engine to be a desktop application, not to function in a 3D world, so that was an open question. Once they knew it could be done, the team kicked off work on the real thing in early 2015.
A lot of the work was easier than the team expected it to be, but it still had to solve problems unusual for an editor. Like, how do you move around inside what you’re building? They landed on something that feels a bit like Spider-Man but has you grabbing the world and pulling it past you.
While the tool to drop into VR to create VR wasn’t released to the public until Epic’s GDC keynote last month, the team working on Epic’s flagship virtual reality demo has been building with the tool as long as it’s been around.
Bullet Train started out as an exploration of virtual reality. Tommy Jacob, lead producer on the game, says Epic knew it wanted to do something in VR and that it wanted to do a shooter both because of the genre’s popularity and Epic’s experience.
The game started as a city street with a table resting in the middle of the road. The table is loaded up with guns, and players can pick any of them up and shoot them.
“The focus from the very start was to make holding a gun in your hand feel extremely visceral, extremely comfortable and to build on that mechanic,” Jacob says. “We thought about how we could make shooting a gun more fun, more exciting for the player. That's when we started experimenting with the notion of bullet time and slow motion, catching bullets and throwing them back and things like that.”
But a VR shooting gallery isn’t where Bullet Train ended up. Instead it became a slick sci-fi shooter inside a train station. One that allows you to teleport around the station, grabbing guns, punching bad guys and shooting lots of guns. You can also slow time to grab bullets, snatch rockets out of the air or even deliver Oldboy-like melee combos that leave a pile of enemies in your wake.
“This was something that we knew that this could really take off, and we still feel that way. It could really happen this year.”
Epic’s shift to 4.0 also has a lot to do with Bullet Train’s existence.
“Around that time we realized we needed a VR team to make a first-class thing at Epic,” Jacob says. “We just went all in on it, like this was something that we knew that this could really take off, and we still feel that way. It could really happen this year.”
What’s strange is that Bullet Train remains a demo only with no plans to turn it into a title. It was useful in helping the engine team work out the kinks of developing a game in VR, but that seems to be the end of its usefulness.
Even that day, sitting across from me in a meeting room, Jacob says that they continue to polish the game, improve on it. But Epic has no plans for it beyond a demo.
That would sound unbelievable if it weren’t for the fact that this is actually Epic’s third VR demo. The others, which include being the titular hobbit in a scene with Smaug, the dragon from The Hobbit, aren’t just demos. They’re rarely, if ever, shown anymore. They were, in essence, a way to test some ideas and then packed away once they served their purpose.
While Epic doesn’t have a VR game to announce or release, that doesn’t mean the company doesn’t value what VR could mean for the game industry. Jacob says there are two sides to how virtual reality fits into what Epic is doing.
“There's the engine side where we feel very passionate about ensuring people that are using our engine have access to the best tools to work in VR,” he says. “That's a no-brainer. The other side is game development, with what we've seen in VR in the past year, particularly internally, because we're all very excited about what we've been able to achieve in Bullet Train.
“I think there's an obvious argument for the game side of Epic to embrace the VR and build something. What that is, I don't know. It's going to depend on what we think is important for Epic games moving forward. I don't think Epic has a game future that doesn't include VR.”
Throughout interviews with the people playing in and building in virtual reality, there always comes a time when they say to ask Sweeney what he thinks.
Unreal Engine VR editor as a Minecraft-like game? Ask Tim.
Bullet Train as a game? Ask Tim.
The future of VR inside Epic? Ask Tim.
Finally, I did.
“I think Minecraft is going to be the ultimate direction of VR, creating experiences that you can not only play as a participant but also contribute to,” Sweeney says. “That's exactly what our goals would be and our engine is all about. Right now it's being manifested through building our VR games, but the next step is to go much wider with this sort of thing. Not only building content but code and live objects that have accurate behavior in the world. That's all going to play out with VR in the next decade.”
And, Sweeney says, eventually Epic will likely build a VR game. Just look at its iterative process, he says. The team has been building bigger, better, more interactive demos. Each time those demos feel more like a game and less like an experience.
“I think Minecraft is going to be the ultimate direction of VR.”
“VR is a platform that is being nurtured right now,” he says, “that we expect will be central to the entire game industry, and we’ll contribute to it. So it’s fundamental to our future, and we’re putting an enormous effort into figuring it out as best as we can in our engine.”
Part of that process includes constantly iterating on the VR editing tool, something that is meant to increasingly democratize the game-making process.
“Right now the Unreal editor is still a true tool for professional content designers, but that's going to open up really quickly,” Sweeney says. “Minecraft has this funny attribute to it — the set of building blocks are so limited, an absolute expert creator's work isn't dramatically better than casual users’ work. That's not the case with Photoshop or 3D Studio, or the Unreal Engine. With these tools, if you have an expert come in, their work is orders of magnitude better than an amateur. So a huge initiative for us is to lower the gap in expertise that's required.”
That means creating smart objects, defining and building templates for things like a castle or a farmhouse, and setting up rules for those things.
“Then you, as casual content creator, you should be able to go and stretch the walls out and say there should be a turret here and a rampart there, and design the castle without having to model it polygon by polygon or draw the individual pixels of it.
“With that kind of approach, you have a great deal of specialization where pros can create object libraries that are modifiable and extensible and parametric, and then individuals can use them to build excellent real-world objects.”
“In 10 years we won't be sitting in front of monitors or smartphones or using keyboards or mice at all, but we'll be wearing something literally with the convenience and form factor of your Oakley sunglasses.”
Sweeney envisions a world where someone could make that castle template and someone else could pay the designer real money to use it in their own little slice of the “metaverse.”
“Then maybe you'd go and buy some furniture or build your own,” he says. “We're not talking about Epic running this business but about everybody in the world being able to collaborate to build things. Free experiences, commercial experiences, whatever, all the way from the Minecraft use case today to the professional game developers building professional games.”
Virtual reality is a big deal to Sweeney and to Epic, both because of the potential uses it drives with the engine and the potential games that can be created.
“I think it's a stepping stone to the future of the industry,” Sweeney says. “I believe we're in this long-term transition to augmented reality, that in 10 years we won't be sitting in front of monitors or smartphones or using keyboards or mice at all, but we'll be wearing something literally with the convenience and form factor of your Oakley sunglasses and that will have 8K displays per eye and it will be your window into both the real world and virtual world.
“That way everything from gaming to computing to professional work is all going to be completely rethought. VR is the stepping stone to that. Right now we're putting on this really big helmet and there's a bunch of really big cables that run to a computer. That's the starting point but, as with the smartphone evolution, the end point is pervasive technology that's in the hands of billions of people.”
Next: Making movies in Unreal.