Great interview with David Helgason - UE4 has had no impact on Unity

http://venturebeat.com/2014/05/09/c...-mobile-game-dev-services-interview/view-all/

 

...or so he claims.

 

I read that. It is very interesting, especially when they get to the following part:

GamesBeat: With their base price, they’re trying to undercut you.

Helgason: They actually went up in price, in a way. Now Unreal has a five percent backend, which arguably makes it the most expensive engine on the market. It doesn’t really matter. I won’t go into the math.

---

I admit that there are specific price points where one can make the case that Unity is cheaper, such as a single developer selling more than $100,000 worth of games per year. However, for nearly everybody else, UE4 is cheaper than Unity. For hobbyists, UE4 is massively cheaper. The 5% royalty is basically a non-issue for hobbyists. For large teams, UE4 can be cheaper, since Unity charges per seat for licensing. I really wish the interviewer had taken a moment to dig a little deeper on that issue. If Helgason really thinks Epic's prices went up, then he does not understand the situation.

 

No impact means no intersection:



... which would be hard to believe.

This guy has great fashion sense though

 

Fixed that for you.

 

You missed his awesome scarf in the article. So he is an expert in both scarves and collars.

 

Most interesting part of the interview for me

Question: What are your plans for supporting HTML 5 as a run-time?

Helgason: We started working on that quite a while ago. We announced it and showed it at GDC a couple of months ago, a Unity exporter for HTML 5 and WebGL. It’s running really well. It’s not perfect, but it’s going to be out in what we call a preview with our Unity 5, which is the next big release. It doesn’t have a date yet, but it’s getting really close. It definitely exists and it’s surprisingly awesome.

 

For some strange reason I am unable to edit my earlier post or else I would have edited the earlier one to add this as well.

The 2nd most interesting part

Question: The rumor a while back was that AutoDesk was trying to acquire you guys. Thanks for not selling, if that was at all possible.

Helgason: If I had a dollar for every rumor about acquisition, I wouldn’t be rich, but I could buy myself a really nice meal.

 

Funny thing is he says if he had a dollar for every rumor about acquisition..
Well, rumors can be true or false, he doesn't say it was a false rumor.

So we may never know.

 

You can have a really nice meal cheaply too, just an egg and some bread can taste really great.

 

I keep doing the maths for this and have no idea how you reached this conclusion. Take a studio of 100 employees (large studio) and some of them are artists, some are 'technical' and not everyone needs a seat, but assuming all 100 people in that team needed a seat then that's about 100 thousand pounds in brit money in unity seats for pc games. If you make two million pounds from your game (You really have to pray you make more than 2 million pounds with a studio of that size, imagine one year at a horribly low pay of 20,000 per employee, that's 100*20,000 = 2 million, so thats employment at degrading rates for one year covered by game sales), 5% of that is 100,000 pounds.

And Helgasson talked of enterprise deals for large companies.

Even in a worst case scenario i can't see a 'big game' being cheaper to a developer with U4 than Unity, unless you have an odd idea about how much money is involved in 'big games'.

 

I think the mistake most people are making in running these numbers is that Unity is $1500 for the base license only. Most Unity projects are going to be mobile so the licenses are $4500 each ($6000 when OpenGL comes out) so a studio needing 100 licenses would have to pay out $450,000 not $150,000. Now on top of that on a large project you are likely to go over at least one Unity upgrade cycle so you will wind up paying another $225,000 to upgrade your licenses. So the total would be $675,000. So if your game made $2,000,000 you would pay Unity 33% of that. Now on top of all that, if your game fails to generate any significant revenue (or the project is cancelled) you still paid out all that money to Unity, but Epic only makes money when you succeed.

 

Most people need all those licences (A 100 person mobile development studio)? The entire studio need a Unity seat? You missed the bit about enterprise arrangements?

 

This is different as with Unity you OWN your licenses and upgrades you paid forever. If you failed making selling your game, you could make 10 other games using your licenses , and sell these games as long as you want and make new games, all money will come to your pocket with no Royalties.
With UE4, you pay less, but Royalties are forever, if you are not success no deal, once you have success you will pay forever something.

 

Do it and i switch to EU4.

 

Only so long as your game earns over $3000 a quarter. And even then, if your game earns (say) $4,300 you only have to pay the royalties on the $1,300 - which is $65.

 

+1 That would honestly be the last straw for me...

 

If you are working on a project in Unity and have committed time and money to it then you are most likely in the short term stay with Unity. But once you have released your latest project then things might change, at least you will probably try out UE4 and compare it to Unity. I would expect that it's early days yet but the big crossover could happen when Unity 5 is released and developers have to compare the available engines and their costs.

 

Apparently people aren't fans of autodesk around here

 

Perhaps a good deal. For some people that could be success and win over 3000$ a quarter , no Royalties means Epic have no insight on your business ,and you don't have to worry if you have to pay or not each quarter of each year. But indeed a game can sell a lot at beginning , and reach a maximum months, then this is decrease as a year passes and new games arrives, so indeed perhaps you have to worry about the sells only the first year, and UE4 would make sense even with Royalties.

A plus with Unity , is if you target lower hardware Unity keeps compatibility with 3D cards old from 2004, what is a strong point, specially for simple 3D indie games or using standard shaders. For UE4 i don't know if you can produce a simple PC game with simple lightening and shaders compatible with older PC and not only last two years ones ?

They baught Maya their main old concurrent to remove a serious concurrent, but they are more concentrated on 3DSMAX, Maya staying in the background in terms of bigger features. Buying Unity could lead to bad situation like some new AAA engine targetting bigger companies with Unity binded with 3DSMAX features, so you would need 3DSMAX to use Unity so overall pricing would jump a lot indeed.
As indie i don't know if there is small companies using 3DSMAX or alternative software but it is too much expensive for lonewolves.

 

Also why do people assume large studios buy Unity at the face value price? they really do not. Volume discounts can be substantial.

 

If a 100 person studio makes only 2mill, their software costs are the least of their worries.

 

This is the boat I am in.... I havent even bothered to look fully into EU4 or CryEngine simply because I have a project that is too invested in Unity. Once, I have finished, who knows what engine I'll be using. Hopefully, I'll stick to Unity since I'm experienced in it, but who knows....

 

If David said UE4 has no impact on Unity (being true or not) then lets see how it turns out for both UE4 and Unity in a couple of months.
Interesting battle is preparing! ^^

 

That's like saying Honda doesn't impact GM. Obviously they impact each other. They're competing for the same market share. If a team is using UE4, they arn't using U4 and Unity is not getting paid.

Honestly, after I launch my game, I'll probably play around with UE4 just to see how far it's come since I last played with the UDK (around 2010ish).

 

This thread has made me buy UE4, looks amazing.

I teach unity classes and UE4 has impressed me enough to try and add that as a class too.

 

Nobody left? Wow, denial much? Better check those stats again, when your users start completing their current projects.

 

If you're running a studio with 50 or 100 seats of Unity, you'd be talking to a sales rep, not ordering them in the web store.

In reality, when your budget and cashflow forecasts are in the multi-millions you're probably in a position where you can cozy up to any middleware maker and cut a nice deal, especially when there's no physical goods involved. It's all about getting business, and the same applies to Epic and royalty options. You can still get "last year's" licensing deals.

 

I put this "nobody left" only on the fact that maybe there are already projects in development, and is to late to switch over. But for next projects, this is discussable and there is where we can see if anybody switch.

 

My first post here. But I'm reading this forum for a long time.

I think that you guys missed some parts in UE4 agreements.
UDK was free with 15% royalties. What was cheaper than 19$ per month and 5% royalties. Why?
Because that 15% before was on your profit. If you EARN 10$ with one copy of your game, than on that goes 15%.
But, now it's 5%, but not on profit...there is a trick. 5%>15% in this situation.
For example, if your game cost 10$ and you need to pay royalties to your publisher, store on which you sell your game, and lot of other things. You can easily end up with situation that this 5% of royalties can lead you into negative profit. If all other royalties cut you under the 0.5$, epic goes on all 10$, not on 0.5$
So, think again if this marketing scheme works well for you.

I think that Epic pricing is better option for hobbyists only. And again, large companies don't want to pay royalties. So, I think that Unity is pretty cheap.



Sorry for my bad English.

 

I guess there's some lack of understanding that Unity is a much larger company with much more influence than nostalgia tinged 'indie unity'. You small timers (Maybe there's some big shots but lets imagine the majority are probably kinda smaltime) might not realise how insignificant you are, in the grand scheme of things as individuals, especially the ones getting all pissy at everything. You're not the main revenue stream as it's 'proper' business, LOTS of money is involved, your $1500 is a piss in the ocean, Unity don't care because the businesses they're catering to see it as pocket money, great tools and one off grab. These same companies would find that 5% a massive blow. It's millions! Millions and millions of pounds/dollars whatever involved. Unity has 400 people, how do they cater to every individuals whims in a userbase of maybe even over 100000 (Taking helgassons figures with a pinch of salt)

These big companies do not give a F*** about a piddling price to them, i was talking to a fellow in a well known dutch studio on the matter and, well, he complimented me on my idea about using a smallish room full of unity machines and brainiacs who can socialise well and have them 'concept code' like you get concept art and said i should be having a firm talk with his studio (I still feel warm inside about it). Doesnt even have to be anything from the projects main drive or using any of the studios typical workflow, idea is to mash out prototypes for all manner of systems that might work in a game. Thats a great way to use unity right there, the editor is excellent (After 64bit anyways) getting things together is absolutely minimum fuss, it's drag and drop everywhere, you could consider an item on an asset store and purchase its POCKET CHANGE. Amplify 2 is coming soon at i think $400 dollars or so. If that delivers like ive seen talks on it delivering then thats a perfect example of the value you're getting

Unreal 4 doesnt have a working asset store does it? When it does it will be then that i start thinking about making assets, as i'd happily submit to both stores, but all these things in the store are piddling money to any developer of consequence in the Unity sphere. Theres a big blob in that sphere called 'tinkeres, hobbyists, researchers, very small time) and i really hope those who cant get pro are given a bumper surprise in the U5 release that put the really stupid things to not be available, available, it's dx11 world now (soon dx12), free's going to need some of that muscle.

And even with a few nice gifts to the free using community, the Pro version would be completely absurd not to buy for anyone serious about games, they aren't devaluing pro by giving free some advanced rendering abilities, you can go look at the feature differences from pro and free right now and see a lot of really cool stuff that could go in free and stuff that could hamstring many a serious commercial product without having pro, even before you hit 100k, and as described before, 100k doesnt get you very far, although at 100000k you'd pay 5000 to Epic, which is def going to get a couple of people Unity Pro seats. The numbers scale, i suppose they reach a plateau when you're at enterprise level

 

Very interesting ...
That's a very easy point to overlook.

 

3Denis, dont forget if you make less that 3k per quarter you pay nothing. All those percents have been discussed here in all aspects. Is all about pay in upfront or not.

 

Less than 3k per quarter? I'd hope so! Or they'd be taking the absolute piss. I have no idea why i'd find comfort in that target were i ever to make anything specifically to sell

 

This would be more costs management problem if selling the game 10$ your final income would be 0$ or not enought to pay 5% of 10$.

 

Yes. But maybe my example isn't good enough.
I mentioned only royalties that you need to pay to the publisher and store. But I forget to mention wages that you need to pay, rent etc.
With good costs management, you can end up with enough money to survive, but than come Epics royalties.

 

It's all cool, because that's not what he said.

What he said was:

He doesn't say what numbers he's referring to, so we can't really learn too much from it.

I was discussing this in another thread, too. There's actually nothing to argue about. It's very straightforward math.

If you look at license costs alone and rule out any volume licensing or other special deals, the tipping point is an engine-derived income of $100k per licensed employee, assuming Pro + iOS + Android + $500 per developer of Asset Store spend on the Unity side. If we want to nitpick, that's ignoring the $19 sub fees for UE4. (It also doesn't include marketplace stuff, but the argument for that being included on the Unity side is claims that Unity isn't "full featured" without it.)

 

It's not just epics, its apples, googles, steams, ad costs etc crushing your effort into dust

 

Could you illuminate what you were saying? I might be dense but i couldnt follow it

 

These companies working on huge projects, spending millions, negotiate custom licensing deals with whichever engine developer suits their needs. The 5% will never come into play with them; they just go after the best tool for the job.

 

This is the best comment on the thread. Assuming these companies arent stupid, they're buying exactly what they need to do what they need, they have a lot of money and experience to know this. Unity Boss Guy i'd imagine is confident because this isnt going to change, and why there will always be a place for both Unreal and Unity, its just the sad fact that you have to accept that you probably dont matter

 

It's about fixed vs. variable costs in a business.

With UE4, for every $100k you make you give Epic $5k. This is a variable cost.

With Unity, assuming you use Pro + iOS + Android licenses and buy $500 of engine features or tools from the Asset Store, you spend the same $5k for one developer. This is a fixed cost based on your team size, and is where the "per developer" comes from.

The UE4 variable cost starts out at far less than Unity's fixed cost, but depending on your engine-derived income it could be far higher. The tipping point where UE4 starts costing more is the where you're earning more than $100k per licensed developer.

For example, if I have a team of 2 people using Unity for iOS and Android and they make an app that makes $200k, my cost is $10k. If the app only makes $100k then my cost is still $10k, and if the app makes $500k my cost is still $10k.

If I did the same app with UE4 then my cost varies based on how much the app makes. If it makes $100k my cost is ~$5k (we're well under the tipping point here, so UE4 is cheaper). If it makes $200k then it costs me ~$10k (we're at the tipping point, so the costs are more or less the same). But if it makes $500k then the cost is $25k (we're well over the tipping point, UE4 is now far more expensive).

As you can see, there are pros and cons to that. The pros are that you don't need the money to get started and if you don't make money you don't pay as much, so there's lower risk*. They're unarguably good things. The main con is that if you go past that tipping point it'll cost you big time.

People who haven't crossed that tipping point will consider that con to be a "good problem" and not care - would you say no to $70k (after vendor splits ) if it came on the proviso that you had to give $5k to someone else? Hell no! That's still $65k you wouldn't otherwise have, where's the downside?

Flip the context, though - you're already making big, successful, high budget games and your batting average is already well over $100k per licensed developer**. Does giving 5% of that away sound good when you can negotiate a fixed price deal? Not so much. That doesn't make UE4 a bad deal, it just means that this particular offer isn't for you - it's time to have your producer talk to their business development manager and cut a custom deal.

If you're starting up then, even just thinking of finances, there's good reasons to go for either engine. But broad generalisations about one being cheaper than the other don't come into it.

If you're big then, even just thinking of finances, there's good reasons to go for either engine... but I highly doubt they're the public deals advertised on the websites.

With that in mind...

* This batting average is pretty much a requirement for any commercial game that takes more than a full-time year.

** But lets not forget that there's still the risk of everything else involved in setting up a game studio. Just like zombiegorilla is getting at, the license cost for one piece of software is only one factor in a business.

 

You didnt have to get that detailed! I knew all that, it was just unclear of what the outcome of your previous post was, maybe i need to learn the lingo better

 

Saying there is no impact is a bit short sighted. There is an impact but it may not be immediately obvious but almost all serious Unity devs will be considering or will have at least thought about UE4. Hell I bought a subscription of it just to play around with it (not had time though yet).

I also think that whilst the PC mobile platforms are what most people are developing for, lets not forget the console platforms. I can't go in to specifics because of the NDAs that I signed but UE4 vs Unity for consoles is a very interesting topic.

What Unity need to remember is that now new people will not always head directly to Unity, they have other options to consider and with the pedigree of Unreal and the lure of FPS of new developers I think in honesty many will at least start off in UE4.

 

We already know this isn't true, EVE Valkyrie switched and I know of probably about 50 developers who have switched or in the process. Whether or not this reflects on the numbers sheet I'm not sure, issue with perpetual licences are you can only compare from revision to revision and as UT5 isn't out yet I'm not sure what sort of analytics David is basing this on? If people are using subs they might be locked in, well for now anyway.

To a large company or medium development team Unreal 4 is more expensive, but it really doesn't matter for two simple reasons. A) You actually have to be able to make your game and release it in a decent state to earn any money AT ALL. B) Once you get to the point where you earn 5 Million out of it which is a 250K cut it doesn't really matter. You have been successful enough that you can negotiate royalty free for future releases. If you are already a company with a track record and a boat load of money, you will just negotiate a royalty free license anyway.

It's the option to have a low risk initial investment that counts. That aside it's not about the money, you pay for the tools you need to get the job done.. If we are talking A / AA or even AAA sector it's easy to figure out which one people are going to lean against.

 

Apparently we do matter to UE4. Their efforts to capture our affections have been unrelenting. One romantic gesture after the other.

 

Looks like its time for indie pricing.
EA has a discount, so they pay like 1200$ for pro, but indies have to pay 1500$. It seems to me that current situation looks unfair.
I`d like to have something like a 500$ price for those earning below 30k annual.

 

Didn't know that, very not fair indeed for indie and small companies, as not big company we should pay some ratio like 1/5.
Anyway UE4 is becoming a way for indies to have access to AAA tools and graphics, Unity can't ignore that fact.

 

Unreal has only been out for what, a month? I don't believe institutional inertia takes that short a time to kick in. We'll know better in six months how this will go. I don't believe it is wise to make any definite statements now, like Helgason does in that interview. It will take time for the pros to switch over; and when they do, the hobbyists and newbies will go to where the pros are.

 

I'm sure the large developers will still have the traditional Unreal Engine licensing options with fixed fees. And large developers will be able to negotiate special terms with Unity.

The impact of the $19/5% deal is not at the AAA end of the market.