At this week’s Game Developers Conference 2015 in San Francisco, a strange thing’s been happening: Three of the biggest video game technology companies in the world just announced that they were giving away their game engines — the secret sauce that powers theirs’ and their licensees’ games — totally for free.
The move comes as competition to be the platform of choice for developers to build blockbuster video games, students to build cool projects, movie directors to build virtual worlds, and scientists to perform computer experiments. The engine is what runs behind the scenes, providing a framework for engineers to add sounds, characters, artificial intelligence, physics, and more. It’s totally invisible to the gamer, the viewer, or the user. But it’s big business.
Epic Games, perhaps best known for the 22-million-selling Gears of War series of Xbox 360 games, has licensed out its Unreal Engine to hundreds of other developers, who then use it to make successful games like Electronic Arts/Bioware’s Mass Effect series and the forthcoming Mortal Kombat X. It’s a significant source of income for Epic Games, which used to collect royalties of 25% of revenue for projects built using Unreal Engine that made more than $US50,000.
At last year’s GDC, Epic made waves by making the latest version of the Unreal Engine available to developers on a subscription model, with most paying around $US20 a month. Epic also opened it up for free to students.
This week, Epic went a step further by releasing it for free, with developers only having to pay a 5% royalty on any project that makes over $US3,000 in revenue for a quarter.
Epic’s main competition in this regard is Unity. Where Epic’s Unreal Engine has always focused on providing glitzy graphics-intensive experiences, Unity has drilled down on providing stable, reliable, affordable cross-device support for desktops, mobile, and even the Samsung Gear VR.
Unity followed suit with Epic by announcing the new Unity 5 game engine, for which it then also announced a new free subscription tier. As long as you have revenue or funding less than $US100,000, Unity will never collect any money from you. If you break that barrier, it’s $US75 per month or $US1,500 flat, with no royalties ever collected — a signifiant thing if you’re planning on building the next big iOS hit.
Unity and Epic also both make money on their offerings with marketplaces where developers can buy pre-made graphics and sounds to plug into the engine, cutting down on development time.
Finally, Valve Software, the famously secretive developer of the seminal Half-Life and Portal franchises, dropped a little bomb of its own with the announcement of Source 2, the latest version of the game engine that powered hits like Half-Life 2, Portal 2, Dota2, and basically the company’s entire output. And, of course, Valve is offering it for free, though true to form, details are scarce and we don’t know which pricing
While Valve has never had quite the same level of success at licensing its Source engine as the other two mentioned above, it’s still worth noticing when a company of its size and stature — its Steam digital distribution network makes it the iTunes of video games — makes such a move, especially in light of its recent VR efforts in conjunction with HTC and Oculus.
So why now? Easy: The slow rise of virtual reality, the mobile world, and the coming of age of the video gaming generations means that demand for game engines and app building tools is going to be higher than ever before.
Epic Games, Unity, and Valve Software all want to be the platform of choice for those who want to create interactive experiences, even if it means reeling them in by giving it away for free.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.