Epic offers new 3.5% royalty to developers if they launch on Epic Games Store

Following the landmark 88-12 revenue split, Epic Games has kicked off yet another initiative in a bid to win over developers

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Epic wants more developers to launch their games on the Epic Store, and to make that happen, the company has announced a new robust program called Launch Everywhere that can reduce royalty rates from 5% to 3.5%.

There's some criteria, though, and we've included tons of info about the new incentive.

Epic Games Store general manager Steve Allison explains how this will work:

"To participate in this program, you'll need to ship your Unreal Engine game first or simultaneously on the Epic Games Store, on all platforms where you ship your game and where we have a store. This includes PC, Mac, Android, and in the future, iOS.

"And when you Launch Everywhere with the Epic Games Store, you benefit everywhere you launch your game. This means eligible games will get their rate reduction across all stores, including Steam, and all platforms where you offer your game, and that includes all consoles.

"This is a powerful incentive for you to activate all of the incredible Game Store opportunities and benefit everywhere."

Below is the Launch Everywhere FAQ listed on Epic's website:

If I release a game or other application subject to royalties, what do I need to do?

Before you distribute that product, you must give Epic notice of your intended distribution by submitting the Release Form.

Under the terms of the standard Unreal Engine EULA, you are generally obligated to pay to Epic 5% of worldwide gross revenue, regardless of what company collects the revenue. The 5% royalty is calculated on the amount over and above the first $1 million USD in gross revenue.

Effective Jan 1, 2025, the royalty rate may go down from 5% to 3.5% of earnings above $1 million USD if you ship your game on the Epic Games Store before or at the same time you release it on other stores.

Revenue generated through the Epic Games Store is also excluded from the royalty calculations where Epic processes those payments.

Royalty payments are due 45 days after the close of each calendar quarter. Along with the payment, you must send a royalty report on a per-product basis. For more information, see our Release page.

If I release my product on the Epic Games Store, would the 5% royalty apply to revenue earned from the Store?

No. Revenue generated from the Epic Games Store will be excluded from the calculations of the 5% royalty due for Unreal Engine where Epic processes those payments.

When you release a product on the Epic Games Store, you pay Epic 12% of the revenue earned and keep 88%. There is no additional royalty due for Unreal Engine usage where Epic processes the payments.

Additionally, starting Jan 1, 2025, if you release your product on the Epic Games Store before or at the same time you release it on other stores, you will qualify for a reduction on royalties due for Unreal Engine usage as per the 'Launch Everywhere with Epic' program, bringing the royalty rate down from 5% to 3.5%.

What is the 'Launch Everywhere with Epic' program?

Developers can qualify for a reduced Unreal Engine royalty rate for games that ship on the Epic Games Store before or at the same time as in other stores on corresponding platforms. Qualifying games will benefit from a royalty rate of 3.5% (instead of the 5% standard).

The lower royalty will apply to all platforms where the game is offered such as console, mobile, and/or desktop, as long as you are shipping on the corresponding Epic Games Store for that platform (should it be available).

The program starts on January 1, 2025 and applies to games launching on the Epic Games Store on or after that date.

What do I need to do to qualify for the 'Launch Everywhere with Epic' program?

The program applies to games that ship on or after January 1, 2025 and with the reduced royalty rate starting on the same date. To qualify, your game will have to meet one of the following criteria:

1. Ship exclusively on the Epic Games Store for PC, Mac, and/or Android.
2. Ship on the Epic Games Store first, before shipping on other stores on corresponding platforms (PC, Mac, and/or Android). This is inclusive of games participating in the Epic First Run program.
3. Ship simultaneously on the Epic Games Store, and other stores on corresponding platforms (PC, Mac, and/or Android).

Notes:

• We are temporarily waiving the requirement that you simultaneously ship your iOS games on the Epic Games Store on iPhones or iPads to receive the royalty rate reduction. This is because Apple currently imposes a commercially prohibitive 'Core Technology Fee' on apps that ship on stores that compete with their store. If this changes, we will give licensees a minimum of four months' notice.
• In addition, parity between stores is required; this is defined as content, feature, marketing, and post-release technical parity in the updated EULA.
• If a game that qualified in the past ever stops meeting all the criteria, the Unreal Engine royalty rate will return to the standard 5% rate.