In a post on the Unreal Development Kit forums, Epic Games head honcho Mark Rein announced that the revenue threshold for UDK-developed games has been raised from $5,000 to $50,000. This means developers do not need to pay royalties on their games within the first $50,000. This is a boon for smaller developers, allowing them more cushion before having to pay out to Epic.
“We just wanted to let you know that we've raised the revenue threshold for UDK. Under the new rules you are not required to pay royalties on revenue earned from the use of UDK until that revenue exceeds US$50,000 which represents a 10-times increase over the previous threshold of US$5,000,” wrote Rein.
“We're really excited about folks making some amazing things with UDK and we realize that a lot of you are just started in the business so not having to pay royalties on your first $50,000 should help you get a financial footing toward building a quality game development business.”
Rein also cleared up some confusion for first-time developers about when royalty payments are activated.
“One thing some folks didn't seem to realize is that whether you sell your product through digital distribution (or a retail location) the company doing the sale to the end user (called the "retailer") takes a cut (typically around 30%) for their efforts. The price they sell it for is called the retail price. The amount of money they pay to you on each sale is called the wholesale amount. When you pay us royalties you pay on the wholesale amount, i.e. the money you actually receive,” he explained.
