Unreal Engine

Short description: Video game engine developed by Epic Games

Unreal Engine

Screenshot of Unreal Engine 4.20
Original author(s)	Tim Sweeney
Developer(s)	Epic Games
Stable release	5.3
Written in	C++
Operating system	Windows, Linux, macOS
License	Source-available commercial software with royalty model for commercial use
Website	www.unrealengine.com/en-US

Unreal Engine (UE) is a series of 3D computer graphics game engines developed by Epic Games, first showcased in the 1998 first-person shooter video game Unreal. Initially developed for PC first-person shooters, it has since been used in a variety of genres of games and has been adopted by other industries, most notably the film and television industry. Unreal Engine is written in C++ and features a high degree of portability, supporting a wide range of desktop, mobile, console, and virtual reality platforms.

The latest generation, Unreal Engine 5, was launched in April 2022. Its source code is available on GitHub, and commercial use is granted based on a royalty model, with Epic charging 5% of revenues over US$1 million, which is waived for games published on the Epic Games Store. Epic has incorporated features in the engine from acquired companies such as Quixel, which is seen as helped by Fortnite's revenue.

In 2014, Unreal Engine was named the world's "most successful videogame engine" by Guinness World Records.

History

First generation

A screenshot released by Epic of the first version of UnrealEd, displaying a graphical user interface written in Visual Basic

The first-generation Unreal Engine was developed by Tim Sweeney, the founder of Epic Games. Having created editing tools for his shareware games ZZT (1991) and Jill of the Jungle (1992), Sweeney began writing the engine in 1995 for the production of a game that would later become a first-person shooter known as Unreal. After years in development, it debuted with the game's release in 1998, although MicroProse and Legend Entertainment had access to the technology much earlier, licensing it in 1996. According to an interview, Sweeney wrote 90 percent of the code in the engine, including the graphics, tools, and networking system.

At first, the engine relied completely on software rendering, meaning the graphics calculations were handled by the central processing unit (CPU). However, over time, it was able to take advantage of the capabilities provided by dedicated graphics cards, focusing on the Glide API, specially designed for 3dfx accelerators. While OpenGL and Direct3D were supported, they reported a slower performance compared to Glide due to their deficiency in texture management at the time. Sweeney particularly criticized the quality of OpenGL drivers for consumer hardware, describing them as "extremely problematic, buggy, and untested", and labeled the code in the implementation as "scary" as opposed to the simpler and cleaner support for Direct3D. With regard to audio, Epic employed the Galaxy Sound System, a software created in assembly language that integrated both EAX and Aureal technologies, and allowed the use of tracker music, which gave level designers flexibility in how a game soundtrack was played at a specific point in maps. Steve Polge, the author of the Reaper Bots plugin for Quake, programmed the artificial intelligence system, based on knowledge he had gained at his previous employer IBM designing router protocols.

According to Sweeney, the hardest part of the engine to program was the renderer; he had to rewrite its core algorithm several times during development. He found the infrastructure connecting all the subsystems less "glamorous". Despite requiring a significant personal effort, he said the engine was his favorite project at Epic, adding: "Writing the first Unreal Engine was a 3.5-year, breadth-first tour of hundreds of unique topics in software and was incredibly enlightening." Among its features were collision detection, colored lighting, and a limited form of texture filtering. It also integrated a level editor, UnrealEd, that had support for real-time constructive solid geometry operations as early as 1996, allowing mappers to change the level layout on the fly. Even though Unreal was designed to compete with id Software (developer of Doom and Quake), co-founder John Carmack complimented the game for the use of 16-bit color and remarked its implementation of visual effects such as volumetric fog. "I doubt any important game will be designed with 8-bit color in mind from now on. Unreal has done an important thing in pushing toward direct color, and this gives the artists a lot more freedom," he said in an article written by Geoff Keighley for GameSpot. "Light blooms [the spheres of light], fog volumes, and composite skies were steps I was planning on taking, but Epic got there first with Unreal," he said, adding: "The Unreal engine has raised the bar on what action gamers expect from future products. The visual effects first seen in the game will become expected from future games."

Harry Potter and the Sorcerer's Stone for PC was developed with the Unreal Tournament version of the engine using assets and environments from the 2001 film.

Unreal was noted for its graphical innovations, but Sweeney acknowledged in a 1999 interview with Eurogamer that many aspects of the game were unpolished, citing complaints from gamers about its high system requirements and online gameplay issues. Epic addressed these points during the development of Unreal Tournament by incorporating several enhancements in the engine intended to optimize performance on low-end machines and improve the networking code, while also refining the artificial intelligence for bots to display coordination in team-based gamemodes such as Capture the Flag. Originally planned as an expansion pack for Unreal, the game also came with increased image quality with the support for the S3TC compression algorithm, allowing for 24-bit high resolution textures without compromising performance. In addition to being available on Windows, Linux, Mac and Unix, the engine was ported through Unreal Tournament to the PlayStation 2 and, with the help of Secret Level, to the Dreamcast.

By late 1999, The New York Times indicated that there had been sixteen external projects using Epic's technology, including Deus Ex, The Wheel of Time, and Duke Nukem Forever, the latter of which was originally based on the Quake II engine. Unlike id Software, whose engine business only offered the source code, Epic provided support for licensees and would get together with their leads to discuss improvements to its game development system, internally dubbed the Unreal Tech Advisory Group. While it cost around $3 million to produce and licenses for up to $350,000, Epic gave players the ability to modify its games with the incorporation of UnrealEd and a scripting language called UnrealScript, sparking a community of enthusiasts around a game engine built to be extensible over multiple generations of games.

The big goal with the Unreal technology all long was to build up a base of code that could be extended and improved through many generations of games. Meeting that goal required keeping the technology quite general-purpose, writing clean code, and designing the engine to be very extensible. The early plans to design an extensible multi-generational engine happened to give us a great advantage in licensing the technology as it reached completion. After we did a couple of licensing deals, we realised it was a legitimate business. Since then, it has become a major component of our strategy.

— Sweeney, Maximum PC, 1998

Unreal Engine 2

Killing Floor was built in Unreal Engine 2.

In October 1998, IGN reported, based on an interview with affiliate Voodoo Extreme, that Sweeney was doing research for his next-generation engine. With development starting a year later, the second version made its debut in 2002 with America's Army, a free multiplayer shooter developed by the U.S. Army as a recruitment device. Soon after, Epic would release Unreal Championship on the Xbox, one of the first games to utilize Microsoft's Xbox Live.

Though based on its predecessor, this generation saw a notable advance in rendering terms as well as new improvements to the tool set. Capable of running levels nearly 100 times more detailed than those found in Unreal, the engine integrated a variety of features, including a cinematic editing tool, particle systems, export plug-ins for 3D Studio Max and Maya, and a skeletal animation system first showcased in the PlayStation 2 version of Unreal Tournament. In addition, the user interface for UnrealEd was rewritten in C++ using the wxWidgets toolkit, which Sweeney said was the "best thing available" at the time.

Epic used the Karma physics engine, a third-party software from UK-based studio Math Engine, to drive the physical simulations such as ragdoll player collisions and arbitrary rigid body dynamics. With Unreal Tournament 2004, vehicle-based gameplay was successfully implemented, enabling large-scale combat. While Unreal Tournament 2003 had support for vehicle physics through the Karma engine, as demonstrated by a testmap with a "hastily-constructed vehicle", it was not until Psyonix created a modification out of Epic's base code that the game received fully coded vehicles. Impressed by their efforts, Epic decided to include it in its successor as an official game mode under the name Onslaught by hiring Psyonix as a contractor. Psyonix would later develop Rocket League before being acquired by Epic in 2019.

A specialized version of UE2 called UE2X was designed for Unreal Championship 2 on the original Xbox platform, featuring optimizations specific to that console. In March 2011, Ubisoft Montreal revealed that UE2 was successfully running on the Nintendo 3DS via Tom Clancy's Splinter Cell 3D. "The 3DS is powerful, and we are able to run the Unreal Engine on this console, which is pretty impressive for a handheld machine, and the 3D doesn't affect the performance (thanks to my amazing programmers)," said Ubisoft.

Unreal Engine 3

Screenshots of Unreal Engine 3 were presented by July 2004, at which point the engine had already been in development for over 18 months. The engine was based on the first-generation but contained new features. "The basic architectural decisions visible to programmers of an object-oriented design, a data-driven scripting approach, and a fairly modular approach to subsystems still remain [from Unreal Engine 1]. But the parts of the game that are really visible to gamers – the renderer, the physics system, the sound system, and the tools – are all visibly new and dramatically more powerful," said Sweeney. Unlike Unreal Engine 2, which still supported a fixed-function pipeline, Unreal Engine 3 was designed to take advantage of fully programmable shader hardware. All lighting and shadowing calculations were done per pixel, instead of per vertex. On the rendering side, Unreal Engine 3 provided support for a gamma-correct high-dynamic range renderer. The first games released using Unreal Engine 3 were Gears of War for Xbox 360, and RoboBlitz for Windows, which were both released on November 7, 2006.

Screenshot of the Samaritan demo

Initially, Unreal Engine 3 only supported Windows, PlayStation 3, and Xbox 360 platforms, while iOS (first demonstrated with Epic Citadel) and Android were added later in 2010, with Infinity Blade being the first iOS title and Dungeon Defenders the first Android title. In 2011, it was announced that the engine would support Adobe Flash Player 11 through the Stage 3D hardware-accelerated APIs and that it was being used in two Wii U games, Batman and Aliens. In 2013, Epic teamed-up with Mozilla to bring Unreal Engine 3 to the web; using the asm.js sublanguage and Emscripten compiler, they were able to port the engine in four days.

Throughout the lifetime of UE3, significant updates were incorporated, including improved destructible environments, soft body dynamics, large crowd simulation, iOS functionality, Steamworks integration, a real-time global illumination solution, and stereoscopic 3D on Xbox 360 via TriOviz for Games Technology. DirectX 11 support was demonstrated with the Samaritan demo, which was unveiled at the 2011 Game Developers Conference and built by Epic Games in a close partnership with Nvidia, with engineers working around the country to push real-time graphics to a new high point.

Unreal Development Kit

While Unreal Engine 3 was quite open for modders to work with, the ability to publish and sell games meant using UE3 was restricted to licenses of the engine. However, in November 2009, Epic released a free version of UE3's SDK, called the Unreal Development Kit (UDK), to the general public.

In December 2010, the Unreal Development Kit was updated to include support for creating iOS games and apps, followed by OS X compatibility in the September 2011 release. By 2013, it reported more than 2 million unique installations.

Unreal Engine 4

File:UE4Arch.com - Viennese apartment.webm In August 2005, Mark Rein, the vice-president of Epic Games, revealed that Unreal Engine 4 had been in development for two years. "People don't realise this but we're already two years into development of Unreal Engine 4. It certainly doesn't have a full team yet, it's just one guy and you can probably guess who that guy is," he told C&VG. Speaking in an interview in early 2008, Sweeney stated that he was basically the only person working on the engine, though he affirmed his research and development department would start to expand later that year, developing the engine in parallel with Unreal Engine 3. "In some way, we resemble a hardware company with our generational development of technology. We are going to have a team developing Unreal Engine 3 for years to come and a team ramping up on Unreal Engine 4. And then, as the next-gen transition begins, we will be moving everybody to that. We actually are doing parallel development for multiple generations concurrently," he said.

In February 2012, Rein stated "people are going to be shocked later this year when they see Unreal Engine 4"; Epic unveiled UE4 to limited attendees at the 2012 Game Developers Conference, and a video of the engine being demonstrated by technical artist Alan Willard was released to the public on June 7, 2012, via GameTrailers TV. One of the major features planned for UE4 was real-time global illumination using voxel cone tracing, eliminating pre-computed lighting. However, this feature, called Sparse Voxel Octree Global Illumination (SVOGI) and showcased with the Elemental demo, was replaced with a similar but less computationally expensive algorithm due to performance concerns. UE4 also includes the new "Blueprints" visual scripting system (a successor to UE3's "Kismet"), which allows for rapid development of game logic without using code, resulting in less of a divide between technical artists, designers, and programmers.

I could say: 'I'm going to convert this pillar into a blueprint [in the Engine] and add some sort of trap to it.' It means I can really go in and start enhancing my world with interaction that just would not have been possible without a technical artist, a designer and a programmer and now any one of those three can do all of it, provided they have the assets handy. The fact that I can just go in and say, 'If you're within X distance of this thing, start to glow and take my distance to it, normalize it zero to one and then just lerp [linearly interpolate] between two different brightness values, so as I reach for something it gets hot'...that would have been something do-able but very difficult for anybody except a gameplay programmer. And he wouldn't have known how to set up the assets, but now any one of the three could do it.

– Willard, Kotaku, 2012

An Unreal Engine presentation at GDC 2016

On March 19, 2014, at the Game Developers Conference (GDC), Epic Games released Unreal Engine 4 through a new licensing model. For a monthly subscription at US$19, developers were given access to the full version of the engine, including the C++ source code, which could be downloaded via GitHub. Any released product was charged with a 5% royalty of gross revenues. The first game released using Unreal Engine 4 was Daylight, developed with early access to the engine and released on April 29, 2014.

On September 4, 2014, Epic released Unreal Engine 4 to schools and universities for free, including personal copies for students enrolled in accredited video game development, computer science, art, architecture, simulation, and visualization programs. Epic opened an Unreal Engine Marketplace for acquiring game assets. On February 19, 2015, Epic launched Unreal Dev Grants, a $5 million development fund aiming to provide grants to creative projects using Unreal Engine 4.

In March 2015, Epic released Unreal Engine 4, along with all future updates, for free for all users. In exchange, Epic established a selective royalty schedule, asking for 5% of revenue for products that make more than $3,000 per quarter. Sweeney stated that when they moved to the subscription model in 2014, use of Unreal grew by 10 times and through many smaller developers, and believed that they would draw even more uses through this new pricing scheme.

An Unreal Engine booth at GDC 2017

In an attempt to attract Unreal Engine developers, Oculus VR announced in October 2016 that it will pay royalty fees for all Unreal-powered Oculus Rift titles published on their store for up to the first $5 million of gross revenue per game.

To prepare for the release of its free-to-play battle royale mode in Fortnite in September 2017, Epic had to make a number of Unreal Engine modifications that helped it to handle a large number (up to 100) of connections to the same server while still retaining high bandwidth and to improve the rendering of a large open in-game world. Epic said it would incorporate these changes into future updates of the Unreal Engine.

With the opening of the Epic Games Store in December 2018, Epic will not charge the 5% revenue fee on games that use the Unreal Engine and are released through the Epic Games Stores, absorbing that cost as part of the base 12% cut Epic is taking to cover other costs.

Effective May 13, 2020, and retroactive to January 1, 2020, the royalty exemption amount is increased to US$1,000,000 in lifetime gross revenue per title.

Unreal Engine 4 officially supports the following platforms as of 4.27 (August 2021): Windows, macOS, Linux, iOS, Android, Nintendo Switch, PlayStation 4, Xbox One, PlayStation 5, Xbox Series X/S, Stadia, Magic Leap, HTC Vive, Oculus, PlayStation VR, OSVR, Samsung Gear VR, and HoloLens 2. It formerly supported Google Daydream and HTML5.

Unreal Engine 5

The cave system in the "Lumen in the Land of Nanite" Unreal Engine 5 demo was generated using real-world photogrammetry assets imported into the Nanite engine rather than detailed by hand.

Unreal Engine 5 was revealed on May 13, 2020, supporting all existing systems including the next-generation consoles PlayStation 5 and Xbox Series X/S. Work on the engine started about two years prior to its announcement. It was released in early access on May 26, 2021, and formally launched for developers on April 5, 2022.

One of its major features is Nanite, an engine that allows for high-detailed photographic source material to be imported into games. The Nanite virtualized geometry technology allows Epic to take advantage of its past acquisition of Quixel, the world's largest photogrammetry library as of 2019. The goal of Unreal Engine 5 was to make it as easy as possible for developers to create detailed game worlds without having to spend excessive time on creating new detailed assets. Nanite can import nearly any other pre-existing three-dimension representation of objects and environments, including ZBrush and CAD models, enabling the use of film-quality assets. Nanite automatically handles the levels of detail (LODs) of these imported objects appropriate to the target platform and draw distance, a task that an artist would have had to perform otherwise.

Lumen is another component described as a "fully dynamic global illumination solution that immediately reacts to scene and light changes". Lumen eliminates the need for artists and developers to craft a lightmap for a given scene, but instead calculates light reflections and shadows on the fly, thus allowing for real-time behavior of light sources.

Virtual Shadow Maps is another component added in Unreal Engine 5 described as "a new shadow mapping method used to deliver consistent, high-resolution shadowing that works with film-quality assets and large, dynamically lit open worlds". Virtual Shadow Maps differs from the common shadow map implementation in its extremely high resolution, more detailed shadows, and the lack of shadows popping in and out which can be found in the more common shadow maps technique due to shadow cascades.

Additional components include Niagara for fluid and particle dynamics and Chaos for a physics engine.

With potentially tens of billions of polygons present on a single screen at 4K resolution, Epic also developed the Unreal Engine 5 to take advantage of the upcoming high-speed storage solutions with the next-generation console hardware that will use a mix of RAM and custom solid-state drives. Epic had worked closely with Sony in optimizing Unreal Engine 5 for the PlayStation 5, with Epic collaborating with Sony on the console's storage architecture. To demonstrate the ease of creating a detailed world with minimal effort, the May 2020 reveal of the engine showcased a demo called "Lumen in the Land of Nanite" running on a PlayStation 5 that was built mostly by pulling assets from the Quixel library and using the Nanite, Lumen, and other Unreal Engine 5 components to create a photorealistic cave setting that could be explored. Epic affirmed that Unreal Engine 5 would be fully supported on the Xbox Series X as well, but had been focused on the PlayStation 5 during the announcement as a result of their work with Sony in the years prior.

Epic plans to use Fortnite as a testbed for Unreal Engine 5 to showcase what the engine can do to the industry, with the game brought to use Unreal Engine 5 in December 2021. Fortnite's Battle Royale mode received visual improvements via Unreal Engine 5.1 with the launch of Chapter 4 on December 4, 2022. The Matrix Awakens, a tie-in experience ahead of the release of The Matrix Resurrections, was developed by Epic to be a further demonstration of Unreal Engine 5 along with other technology that they had acquired over 2020 and 2021, including their MetaHuman Creator developed and integrated into Unreal Engine 5 with technology from 3Lateral, Cubic Motion, and Quixel.

Additional features planned for Unreal Engine 5 come from Epic's acquisitions and partnerships. The MetaHuman Creator is a project based on technology from three companies acquired by Epic—3Lateral, Cubic Motion, and Quixel—to allow developers to quickly create realistic human characters that can then be exported for use within Unreal. Through partnership with Cesium, Epic plans to offer a free plugin to provide 3D geospatial data for Unreal users, allowing them to recreate any part of the mapped surface of Earth. Epic will include RealityCapture, a product it acquired with its acquisition of Capturing Reality that can generate 3D models of any object from a collection of photographs taken of it from multiple angles, and the various middleware tools offered by Epic Game Tools.

Unreal Engine 5 retains the current royalty model, with developers returning 5% of gross revenues to Epic Games, although this fee is waived for sales made through the Epic Games Store. Further, Epic announced alongside Unreal Engine 5 that they will not take any fee from games using any version of Unreal Engine for the first US$1 million in gross revenue, retroactive to January 1, 2020. Epic said in October 2023 that it would be changing the licensing approach for uses of Unreal in non-gaming applications such as in film and television production to a per-seat license.

Scripting

UnrealScript

UnrealScript

Paradigm	Object-oriented, generic
Developer	Tim Sweeney
First appeared	May 1998 (May 1998)
Typing discipline	Static, strong, safe
OS	Cross-platform (multi-platform)
Filename extensions	.uc .uci .upkg
Website	docs.unrealengine.com
Influenced by
C++, Java

UnrealScript (often abbreviated to UScript) was Unreal Engine's native scripting language used for authoring game code and gameplay events before the release of Unreal Engine 4. The language was designed for simple, high-level game programming. UnrealScript was programmed by Tim Sweeney, who also created an earlier game scripting language, ZZT-OOP. Deus Ex lead programmer Chris Norden described it as "super flexible" but noted its low execution speed.

Similar to Java, UnrealScript was object-oriented without multiple inheritance (classes all inherit from a common Object class), and classes were defined in individual files named for the class they define. Unlike Java, UnrealScript did not have object wrappers for primitive types. Interfaces were only supported in Unreal Engine generation 3 and a few Unreal Engine 2 games. UnrealScript supported operator overloading, but not method overloading, except for optional parameters.

At the 2012 Game Developers Conference, Epic announced that UnrealScript was being removed from Unreal Engine 4 in favor of C++. Visual scripting would be supported by the Blueprints Visual Scripting system, a replacement for the earlier Kismet visual scripting system.

One of the key moments in Unreal Engine 4's development was, we had a series of debates about UnrealScript – the scripting language I'd built that we'd carried through three generations. And what we needed to do to make it competitive in the future. And we kept going through bigger and bigger feature lists of what we needed to do to upgrade it, and who could possibly do the work, and it was getting really, really unwieldy. And there was this massive meeting to try and sort it out, and try to cut things and decide what to keep, and plan and...there was this point where I looked at that and said 'you know, everything you're proposing to add to UnrealScript is already in C++. Why don't we just kill UnrealScript and move to pure C++? You know, maximum performance and maximum debuggability. It gives us all these advantages.'

– Sweeney, Gamasutra, 2017

Verse

Verse is the new scripting language for Unreal Engine, first implemented in Fortnite. Simon Peyton Jones, known for his contributions to the Haskell programming language, joined Epic Games in December 2021 as Engineering Fellow to work on Verse with his long-time colleague Lennart Augustsson and others. Conceived by Sweeney, it was officially presented at Haskell eXchange in December 2022 as an open source functional-logic language for the metaverse. A research paper, titled The Verse Calculus: a Core Calculus for Functional Logic Programming, was also published.

The language was eventually launched in March 2023 as part of the release of the Unreal Editor for Fortnite (UEFN) at the Game Developers Conference, with plans to be available to all Unreal Engine users by 2025.

Marketplace

With Unreal Engine 4, Epic opened the Unreal Engine Marketplace in September 2014. The Marketplace is a digital storefront that allows content creators and developers to provide art assets, models, sounds, environments, code snippets, and other features that others could purchase, along with tutorials and other guides. Some content is provided for free by Epic, including previously offered Unreal assets and tutorials. Prior to July 2018, Epic took a 30% share of the sales but due to the success of Unreal and Fortnite Battle Royale, Epic retroactively reduced its take to 12%.

Usage

Video games

Unreal Engine was originally designed to be used as the underlying technology for video games. The engine is used in a number of high-profile game titles with high graphics capabilities, including Hogwarts Legacy, PUBG, Final Fantasy VII Remake, Valorant and Yoshi's Crafted World, in addition to games developed by Epic, including Gears of War and Fortnite. Polish game developer CD Projekt is also planning to use the engine after retiring their in-house REDengine; the first game to use Unreal will be a remake of The Witcher.

Film and television

Unreal Engine has found use in film making to create virtual sets that can track with a camera's motion around actors and objects and be rendered in real time to large LED screens and atmospheric lighting systems. This allows for real-time composition of shots, immediate editing of the virtual sets as needed, and the ability to shoot multiple scenes within a short period by just changing the virtual world behind the actors. The overall appearance was recognized to appear more natural than typical chromakey effects.

External video

Industrial Light & Magic - The Virtual Production of The Mandalorian

Among the productions to use these technologies were the live action television series The Mandalorian and Westworld and the animated series Zafari and Super Giant Robot Brothers. Jon Favreau and Lucasfilm's Industrial Light & Magic division worked with Epic in developing their StageCraft technology for The Mandalorian, based on a similar approach Favreau had used in The Lion King. Favreau then shared this technology approach with Jonathan Nolan and Lisa Joy, the producers for Westworld. The show had already looked at the use of virtual sets before and had some technology established, but integrated the use of Unreal Engine as with StageCraft for its third season.

Orca Studios, a Spanish-based company, has been working with Epic to establish multiple studios for virtual filming similar to the StageCraft approach with Unreal Engine providing the virtual sets, particularly during the COVID-19 pandemic, which restricted travel.

In January 2021, Deadline Hollywood announced that Epic was using part of its Epic MegaGrants to back for the first time an animated feature film, Gilgamesh, to be produced fully in Unreal Engine by animation studios Hook Up, DuermeVela and FilmSharks. As part of an extension of its MegaGrants, Epic also funded 45 additional projects since around 2020 for making movies and short films in the Unreal Engine. By October 2022, Epic was working with several different groups at over 300 virtual sets across the world.

Other uses

Unreal Engine has also been used by non-creative fields due to its availability and feature sets. It has been used as a basis for a virtual reality tool to explore pharmaceutical drug molecules in collaboration with other researchers, as a virtual environment to explore and design new buildings and automobiles, and used for cable news networks to support real-time graphics.

In March 2012, Epic Games announced a partnership with Virtual Heroes of Applied Research Associates to launch Unreal Government Network, a program that handles Unreal Engine licenses for government agencies. Several projects originated with this support agreement, including an anaesthesiology training software for U.S. Army physicians, a multiplayer crime scene simulation developed by the FBI Academy, and various applications for the Intelligence Advanced Research Projects Activity with the aim to help intelligence analysts recognize and mitigate cognitive biases that might affect their work. Similarly, the DHS Science and Technology Directorate and the U.S. Army's Training and Doctrine Command and Research Laboratory employed the engine to develop a platform to train first responders titled Enhanced Dynamic Geo-Social Environment (EDGE).

Awards

The engine has received numerous awards:

• Technology & Engineering Emmy Award from the National Academy of Television Arts and Sciences (NATAS) for "3D Engine Software for the Production of Animation" in 2018
• Primetime Engineering Emmy Award from the Television Academy for exceptional developments in broadcast technology in 2020
• Annie Award from ASIFA-Hollywood for technical advancement in animation in 2021
• Game Developer Magazine Front Line Award for Best Game Engine for 2004, 2005, 2006, 2007, 2009, 2010, 2011, and 2012
• Develop Industry Excellence Award for Best Engine for 2009, 2010, 2011, 2013, 2016, 2017, and 2018
• Guinness World Record for most successful video game engine

Legal aspects

The state of the Unreal Engine came up in Epic's 2020 legal action against Apple Inc. claiming anticompetitive behavior in Apple's iOS App Store. Epic had uploaded a version of Fortnite that violated Apple's App Store allowances. Apple, in response, removed the Fortnite app and later threatened to terminate Epic's developer accounts which would have prevented Epic from updating the Unreal Engine for iOS and macOS. The court agreed to grant Epic a permanent injunction against Apple to prevent Apple from taking this step, since the court agreed that would impact numerous third-party developers that rely on the Unreal Engine.

See also

• Procedural generation
• Make Something Unreal
• Epic Citadel
• The Matrix Awakens
• On-set virtual production

Further reading

• Kosak, Dave. "Talking with Tim Sweeney about the evolution of a game engine". http://www.gamespy.com:80/legacy/interviews/sweeney_a.shtm. 
• Buecheler, Christopher. "Tim Sweeney discusses the Unreal Engine". http://www.gamespy.com:80/legacy/articles/engineweek2_a.shtm. 
• Keighley, Geoffrey. "Blinded By Reality: The True Story Behind the Creation of Unreal". http://www.gamespot.com/features/makeunreal/. 
• Herz, J.C (December 2, 1999). "GAME THEORY; For Game Maker, There's Gold in the Code". https://www.nytimes.com/1999/12/02/technology/game-theory-for-game-maker-there-s-gold-in-the-code.html. 
• Thomsen, Mike (February 2010). "History of the Unreal Engine". http://www.ign.com/articles/2010/02/23/history-of-the-unreal-engine. 
• Bullis, Kevin (November 2011). "Epic Games Finds New Customers". https://www.technologyreview.com/s/426071/epic-games-finds-new-customers/. 
• Horvath, Stu (May 2012). "The Imagination Engine: Why Next-Gen Videogames Will Rock Your World". Wired. https://www.wired.com/2012/05/ff_unreal4/all/. 
• Totilo, Stephen (June 2012). "How Unreal Engine 4 Will Change The Next Games You Play". https://kotaku.com/5916859/how-unreal-engine-4-will-change-the-next-games-you-play. 
• Steiner, Brian (June 2013). "How The Unreal Engine Became A Real Gaming Powerhouse". http://www.popularmechanics.com/culture/gaming/a9178/how-the-unreal-engine-became-a-real-gaming-powerhouse-15625586/. 
• Harrington, Richard (November 2016). "The game is on: automotive product development in a new virtual world". https://www.automotiveworld.com/analysis/game-automotive-product-development-new-virtual-world/. 
• Gaudiosi, John (March 2017). "Epic Games' Unreal Engine Is Opening Enterprise Business Doors In Automotive, And Other Industries". http://www.alistdaily.com/strategy/epic-games-unreal-engine-is-opening-enterprise-business-doors-in-automotive-and-other-industries/?nabt=1. 
• Batchelor, James (April 2017). "Sweeney: 'The future of the games industry? Make everyone a creator'". http://www.gamesindustry.biz/articles/2017-04-13-sweeney-the-future-of-the-games-industry-make-everyone-a-creator. 
• Leif, Johnson (November 2017). "How Unreal Tournament mods created a wave of successful indie studios". PC Gamer. https://www.pcgamer.com/how-unreal-tournament-mods-created-a-wave-of-successful-indie-studios/. 
• Yee, Erica (December 2018). "The real reason Epic landed a $15 billion valuation is not Fortnite's viral video game success". https://www.cnbc.com/2018/12/14/the-reason-epic-landed-a-15-billion-valuation-is-not-fortnite-success.html. 
• Alba, Michael (March 2020). "Unreal Engineering: How a Game Engine is Playing in New Industries". https://www.engineering.com/DesignSoftware/DesignSoftwareArticles/ArticleID/19974/Unreal-Engineering-How-a-Game-Engine-is-Playing-in-New-Industries.aspx. 

External links

Short description: American video game company

Epic Games, Inc.

Headquarters in Cary, North Carolina, 2016
Formerly	Potomac Computer Systems (1991–1992) Epic MegaGames, Inc. (1992–1999)
Type	Private
Industry	Video games
Founded	1991 (1991) in Potomac, Maryland, US
Founder	Tim Sweeney
Headquarters	Cary, North Carolina , US
Area served	Worldwide
Key people	Tim Sweeney (CEO) Kim Libreri (CTO) Mark Rein (VP) Adam Sussman (president) Charlie Wen (CCO)
Products	Unreal Engine Bink Video Epic Games Store Unreal series Gears of War series Fortnite
Owners	Tim Sweeney (51.4%) Tencent (40%) Sony (5.4%) Kirkbi A/S (3.2%)
Number of employees	4,000+ (2023)
Subsidiaries	See § Subsidiaries and divisions
Website	epicgames.com
Footnotes / references

Epic Games, Inc. is an American video game and software developer and publisher based in Cary, North Carolina. The company was founded by Tim Sweeney as Potomac Computer Systems in 1991, originally located in his parents' house in Potomac, Maryland. Following its first commercial video game release, ZZT (1991), the company became Epic MegaGames, Inc. in early 1992 and brought on Mark Rein, who has been its vice president since. After moving the headquarters to Cary in 1999, the studio changed its name to Epic Games.

Epic Games developed Unreal Engine, a commercially available game engine which also powers its internally developed video games like Fortnite and the Unreal, Gears of War, and Infinity Blade series. In 2014, Unreal Engine was named the "most successful videogame engine" by Guinness World Records.

Epic Games owns the game developers Psyonix, Mediatonic, and Harmonix, and operates studios in multiple locations around the world. While Sweeney remains the controlling shareholder, Tencent acquired a 48.4% outstanding stake, equating to 40% of total Epic, in the company in 2012, as part of an agreement aimed at moving Epic towards a games as a service model. Following the release of the popular Fortnite Battle Royale in 2017, the company gained additional investments that enabled it to expand its Unreal Engine offerings, establish esports events around Fortnite, and launch the Epic Games Store. As of April 2022, the company has a US$32 billion equity valuation.

On August 13, 2020, Epic released a version of Fortnite that included a permanent discount on V-bucks across all platforms (except iOS and Android devices) if they purchased directly through Epic, bypassing Apple and Google's storefronts. Both Apple and Google immediately delisted the game for violating the storefronts' terms of service by including their own storefront, which led Epic to file lawsuits against both companies the same day, accusing them of antitrust behavior in how they operate their app stores. While Apple was ultimately victorious in a bench trial in September 2021 and upheld through appeals, Google's actions were found to be monopolistic by a jury trial in December 2023.

History

Potomac Computer Systems (1991–1992)

Potomac Computer Systems was founded by Tim Sweeney in 1991. At the time, Sweeney was studying mechanical engineering and living in a dorm at the University of Maryland. He frequently visited his parents, who lived in nearby Potomac, Maryland, where his personal computer, used for both work and leisure, was situated. Out of this location, Sweeney started Potomac Computer Systems as a computer consulting business but later figured that it would be too much work he would have to put into keeping the business stable, and scrapped the idea.

After finishing his game ZZT, Sweeney opted to re-use the Potomac Computer Systems name to release the game to the public in January 1991. It was only with the unexpected success of ZZT, caused in most part by the easy modifiability of the game using Sweeney's custom ZZT-oop programming language, that made Sweeney consider turning Potomac Computer Systems into a video game company. ZZT was sold through bulletin board systems, while all orders were fulfilled by Sweeney's father, Paul Sweeney. The game sold several thousand copies as of May 2009, and Paul Sweeney still lived at the former Potomac Computer Systems address at the time, fulfilling all orders that eventually came by mail. The final copy of ZZT was shipped by Paul Sweeney in November 2013.

Epic MegaGames (1992–1999)

Epic Games founder and CEO Tim Sweeney

In early 1992, Sweeney found himself and his new-found video game company in a business where larger studios, such as Apogee Software and id Software, were dominant, and he had to find a more serious name for his. As such, Sweeney came up with "Epic MegaGames", a name which incorporated "Epic" and "Mega" to make it sound like it represented a fairly large company (such as Apogee Software), although he was its only employee. Sweeney soon underwent searching for a business partner, and eventually caught up with Mark Rein, who previously quit his job at id Software and moved to Toronto, Ontario. Rein worked remotely from Toronto, and primarily handled sales, marketing and publishing deals; business development that Sweeney found to have significantly contributed to the company's growth. Some time this season, the company soon had 20 employees consisting of programmers, artists, designers and composers. Among them was the 17-year old Cliff Bleszinski, who joined the company after submitting his game Dare to Dream to Sweeney. The following year, they had over 30 employees.

In 1996, Epic MegaGames produced a shareware isometric shooter called Fire Fight, developed by Polish studio Chaos Works. It was published by Electronic Arts. By 1997, Epic MegaGames had 50 people working for them worldwide. In 1998, Epic MegaGames released Unreal, a 3D first-person shooter co-developed with Digital Extremes, which expanded into a series of Unreal games. The company also began to license the core technology, the Unreal Engine, to other game developers.

Epic Games (1999–present)

Unreal and personal computer games (1999–2006)

In February 1999, Epic MegaGames announced that they had moved their headquarters to a new location in Cary, North Carolina, and would henceforth be known as simply Epic Games. Rein explained that "Unreal was first created by developers who were scattered across the world, eventually, the team came together to finish the game and that's when the real magic started. The move to North Carolina centralizes Epic, bringing all of the company's talented developers under one roof." Furthermore, Sweeney stated that the "Mega" part of the name was dropped because they no longer wanted to pretend to be a big company, as was the original intention of the name when it was a one-man team. The follow-up game, Unreal Tournament, shipped to critical acclaim the same year, at which point the studio had 13 employees.

The company launched the Make Something Unreal competition in 2004, aiming to reward video game developers who create mods using the Unreal game engine. Tripwire Interactive won US$80,000 in cash and computer hardware prizes over the course of the contest in the first contest in 2004.

Gears of War and console games (2006–2012)

Around 2006, the personal computer video game market was struggling with copyright infringement in the form of software piracy, and it became difficult to make single-player games, elements that had been part of Epic's business model to that point. The company decided to shift focus into developing console systems, a move which Sweeney called the start of the third major iteration of the company, "Epic 3.0". In 2006, Epic released the Xbox 360 shooter Gears of War, which became a commercial success for the company, grossing about $100 million off a $12 million budget. A year later, the company released Unreal Tournament 3 for PC and acquired a majority share in People Can Fly.

In 2008, Epic Games released Gears of War 2, selling over three million copies within the first month of its release.

Epic Games released on September 1, 2010 Epic Citadel as a tech demo to demonstrate the Unreal Engine 3 running on Apple iOS, within Adobe Flash Player Stage3D and using HTML5 WebGL technologies. It was also released for Android on January 29, 2013. Epic Games worked on an iOS game, Infinity Blade, which was released on December 9, 2010. The third game in the series, Gears of War 3, came out in 2011.

In 2011, Epic's subsidiary Titan Studios was dissolved. At the 2011 Spike Video Game Awards, Epic Games announced their new game Fortnite.

In June 2012, Epic announced that it was opening up a new studio, Epic Baltimore, made up of members of 38 Studios' Big Huge Games. Epic Baltimore was renamed to Impossible Studios in August 2012. However, the studio ended up closing its doors in February 2013.

Epic fully acquired People Can Fly in August 2012, rebranding them as Epic Games Poland in November 2013 as they began work on Fortnite alongside Epic. Epic alongside People Can Fly made one last game in the Gears of War series that served as a prequel to the other games, Gears of War: Judgement, which was released in 2013. At this point, Epic had considered developing a fourth main title for Gears of War, but estimated that its budget would be at least $100 million. Additionally, they had suggested the idea of a multiplayer-only version of Gears of War that featured improved versions of maps based on user feedback, similar to the concept behind Unreal Tournament, but Microsoft rejected this idea. Epic recognized the troubles of being held to the business objectives of a publisher and began to shift the company again.

Games as a service and Tencent shareholding (2012–2018)

File:GitHub OctoTales - Epic Games.webm Coupled with their desire to move away from being beholden to a publisher, Epic Games observed that the video game industry was shifting to a games-as-a-service model (GaaS). Sweeney stated, "There was an increasing realization that the old model wasn't working anymore and that the new model was looking increasingly like the way to go." In an attempt to gain more GaaS experience, they made an agreement with Chinese Tencent, who had several games under their banner (including Riot Games' League of Legends) operating successfully as games as a service. In exchange for Tencent's help, Tencent acquired approximately 48.4% of Epic then issued share capital, equating to 40% of total Epic – inclusive of both stock and employee stock options, for $330 million in June 2012. Tencent Holdings has the right to nominate directors to the board of Epic Games and thus counts as an associate of the Group. However, Sweeney stated that Tencent otherwise has very little control on the creative output of Epic Games. Sweeney considered the partial acquisition by Tencent as the start of "Epic 4.0", the fourth major iteration of the company, allowing the company to be more agile in the video game marketplace.

Around this point, Epic had about 200 employees. A number of high-profile staff left the company months after the Tencent deal was announced for various reasons. Some notable departures included:

• Cliff Bleszinski, then the design director, announced he was leaving Epic Games in October 2012 after 20 years with the company. His official reason was "It's time for a much-needed break". Bleszinski later stated that he had become "jaded" about the gaming industry in the lead-up to Tencent's involvement. After Tencent's investment, Bleszinski attempted to renegotiate his contract but failed to come to terms, making him think about retirement instead. He opted to stop coming to work, spending his time at his beach house, eventually leading Sweeney to come down and have a heart-to-heart discussion with Bleszinski on the new direction Epic was going, and asking him to make a firm decision regarding his commitment to Epic. Bleszinski opted to write his resignation letter the next day. After about two years, Bleszinski started Boss Key Productions in 2014.
• President Mike Capps announced his retirement in December 2012, and cited as reasons the birth of a baby boy he was having with his wife and his plans to be a stay-at-home dad. He subsequently announced quitting his advisory role as well as his affiliation with the company in March 2013.
• Rod Fergusson, who had been a lead developer for the Gears of War series, left Epic in August 2012. Fergusson stated that he had seen the direction that the Tencent acquisition would have taken the company, and was not interested in the free-to-play style of games but instead wanted to continue developing a "AAA, big-narrative, big-story, big-impact game". Fergusson briefly joined Irrational Games, owned by 2K Games, to help complete BioShock Infinite. While there, Fergusson talked with 2K about potentially continuing the Gears of War series, leading to talks between 2K Games, Epic, and Microsoft. As a result, Microsoft acquired the rights to Gears of War on January 27, 2014, eventually assigned those to Microsoft Game Studios; Fergusson moved to Black Tusk Studios, owned by Microsoft Game Studios, to take on lead development for a new Gears title, with the studio being rebranded as The Coalition. The first game since the acquisition, Gears of War 4, was released in October 2016.
• Adrian Chmielarz, the founder of People Can Fly, who joined Epic when his studio was acquired earlier in 2012, decided to leave after Tencent's acquisition, stating that he and other former People Can Fly members did not believe the free-to-play games as a service direction fit their own personal vision or direction they wanted to go. Chmielarz and these others left Epic in late 2012 to form The Astronauts.
• Lee Perry, a lead designer on both Unreal and Gears of War series, felt that Epic has started to grow too large to maintain a role as an eccentric game developer. Coupled with the studio's need for more management to support the games as a service model, Perry felt that their creative freedom would become limited. He and five other senior people left Epic to form a new studio, Bitmonster.

Epic continued its goal to deliver games as a service following these departures. Fortnite was to serve as their testbed for living games, but with the shifts in staff, and its engine from Unreal Engine 3 to 4, its release suffered some setbacks. Epic started additional projects; the free-to-play and community-developed Unreal Tournament, first announced in 2014, and the free-to-play multiplayer online battle arena game Paragon, launched in 2016 for Microsoft Windows and PlayStation 4. Epic also released a remastered version of Shadow Complex for newer consoles and computers in 2015, and their first foray into virtual reality with the release of Robo Recall for the Oculus Rift.

The investment infusion from Tencent allowed Epic Games to relicense the Unreal Engine 4 engine in March 2015 to be free for all users to develop with, with Epic taking 5% royalties on games developed with the engine.

In June 2015, Epic agreed to allow Epic Games Poland's departure from the company and sold its shares in the studio; the studio reverted to their former name, People Can Fly. The Bulletstorm IP was retained by People Can Fly who has since launched a remastered version called Bulletstorm: Full Clip Edition on April 7, 2017, published by Gearbox Software.

Fortnite success (2018–present)

Epic's Fortnite exhibition space at E3 2018

By July 2017, Fortnite was finally in a state for public play. Epic launched the title through a paid early access then, with a full free-to-play release expected in 2018. Following on the popularity of PlayerUnknown's Battlegrounds, a battle royale game released earlier in 2017, Epic developed a variant of Fortnite called Fortnite Battle Royale, which was released in September 2017 as a free-to-play title across computer, console, and mobile platforms. Fortnite Battle Royale quickly gained an audience, amassing over 125 million players by May 2018 with estimates of having earned over $1 billion by July 2018 through microtransactions, including its battle pass system. Epic Games, which had been valued at around $825 million at the time of Tencent's acquisition, was estimated to be worth $4.5 billion in July 2018 due to Fortnite Battle Royale, and expected to surpass $8.5 billion by the end of 2018 with projected growth of the game. Player count continued to expand when Epic broke new ground by convincing Sony to change its stance on cross-platform play allowing players on any device to compete with each other in Fortnite Battle Royale. Fortnite has drawn nearly 250 million players as of March 2019.

Fortnite's commercial success enabled Epic to make several changes to its other product offerings. In July 2018, it reduced the revenue cut that it took for assets sold on the Unreal Engine Marketplace from 30% to 12%. Epic launched the Epic Games Store digital storefront to compete with services like Steam and GOG.com, not only taking a 12% cut of revenue compared to the industry standard of 30%, but also eliminated the 5% cut for games using the Unreal engine sold via the storefront. However the company also refocused its development efforts to provide more support for Unreal and Fortnite by ending support for Paragon and Unreal Tournament.

The financial success of Fortnite brought additional investment into Epic Games. Epic Games was one of eleven companies selected to be part of the Disney Accelerator program in 2017, providing Epic equity investment and access to some of Disney's executives, and potential opportunity to work with Disney in the future. Disney had selected both Epic and aXiomatic as potential leads in the growing esports arena.

Epic's has used its windfall to support its products. In January 2019, following a dispute between Improbable and Unity Technologies over changes to the acceptable uses of the Unity game engine, Epic announced it was partnering with Improbable to launch a $25 million fund to help bring developers they believe affected by these changes towards solutions that are more open and would have fewer service compatibilities. Epic launched a $100 million prize pool in February 2019 for Fortnite-related esports activities that it plans to run from 2019 onward. To expand its esports initiatives, Epic Games hired Nate Nanzer from Blizzard Entertainment and their commissioner of the Overwatch League in May 2019. At the 2019 Game Developers Conference, Epic announced it was launching a $100 million MegaGrants initiative, allowing anyone to apply for up to $500,000 in funding to support game development using the Unreal Engine or for any project, even if not directly games-related, that would benefit the Unreal Engine. One of the first major funded entities under this was the Blender Foundation in July 2019, having received $1.2 million from the MegaGrants funding, to help them to improve and professionalize their Blender tools for 3D art creation.

Epic Games was given the British Academy of Film and Television Arts Special Award in June 2019 for its past and continuing developments for the Unreal Engine, a software which also earned it the Engineering Excellence Award from the Hollywood Professional Association.

Epic announced in March 2020 it was establishing a new multi-platform publishing label, Epic Games Publishing. Alongside this, the label had announced three deals with developers Remedy Entertainment, Playdead and GenDesign in which Epic would fully fund development and publishing (including employee salaries, quality assurance, localization, and marketing) of one or more games from each studio, but leaving full creative control and IP rights to the studio, and sharing profits, following Epic's recouping of its investment, 50/50 with the studio. The company expanded their publishing options in October 2021 with Spry Fox and Eyes Out.

Unreal Engine 5 was announced on May 13, 2020, with plans for an early 2022 release. Alongside this announcement, Epic released its Epic Online Services, a free SDK toolset for online matchmaking and other similar cross-platform play support features based on Fortnite. Epic further waived all Unreal license fees retroactively for games up through the first $1 million in revenue, regardless of how they were published, retroactively starting from January 1, 2020.

Bloomberg reported that Epic was nearing a $17 billion valuation in June 2020 once it had completed a new $750 million investing round from its previous investors and newcomings T. Rowe Price Group Inc. and Baillie Gifford. The company partnered with Christopher Nolan and Warner Bros. to acquire distribution rights for Inception, Batman Begins and The Prestige as part of "Movie Nite" on Fortnite's "Party Royale" island. The film live streams were based on a user's country.

Across July and August, Epic raised an additional $1.78 billion in capital investment, bringing the company's post-money equity valuation to $17.3 billion. This included a $250 million investment from Sony, approximately a 1.4% stake in the company. The deal continues the two companies' technology collaboration after they had worked together on the development of Unreal Engine 5, but does not commit Epic to any exclusivity to the Sony PlayStation platform. Sweeney said that Sony had started talking with Epic about investing following the demonstration of the Unreal Engine 5 in May 2020.

Epic purchased Cary Towne Center in Cary, North Carolina, in January 2021, which had been scheduled to be closed and demolished after 2020, to be their new headquarters and campus, with the conversion to be complete by 2024.

Epic unveiled its MetaHuman Creator project in February 2021. Based on the technology from 3Lateral, Cubic Motion, and Quixel, the MetaHuman Creator is a browser-based application to allow game developers to create realistic human characters within a short amount of time starting from various presets, and then can be exported as pre-made models and animation files ready for use in Unreal Engine.

Epic announced a partnership with Cesium in March 2021 to bring its 3D geospatial data as a free add-on into the Unreal Engine.

In April 2021, Epic completed another $1 billion round of funding to support the company's "long-term vision for the metaverse", putting the company's valuation at $28.7 billion. The round of funding included another $200 million strategic investment from Sony. Sweeney remains the controlling shareholder with these additional investments.

The Information reported that Epic Games was launching a new scripted entertainment division in October 2021, bringing on three former executives from Lucasfilm to manage it, with initial plans for a Fortnite film.

In February 2022 Epic Games announced that at least half a billion accounts have been created on its platform.

Epic released the initial beta version of RealityScan, a mobile app that uses the tools from Capturing Reality and Quixel, in April 2022. RealityScan allows users to create 3D models that can be imported into Sketchfab using photos taken by the user.

Epic received another $1 billion each from Sony and from Kirkbi, the parent company of The Lego Group, in April 2022 for continued support of building out Epic's metaverse. These investments gave Kirkbi 3% ownership and increased Sony's to 4.9%. With these investments, Epic had an estimated valuation of $32 billion. Epic and Lego also announced their partnership to build a child-friendly space in the metaverse that same month.

The company announced in September 2023 that it was laying off 870 employees, along with divesting in Bandcamp to Songtradr and spinning off SuperAwesome into its own company. Sweeney said this move was needed to rein in spending, and did not anticipate there would be further layoffs in the future. Mediatonic reported a significant number of layoffs from their team, but remained part of Epic.

Acquisitions

In 2008, Epic acquired Utah based Chair Entertainment, developer of Undertow. Summer 2009 saw the launch of Chair's Shadow Complex, an adventure game inspired by the Metroid series.

Epic announced in October 2018 that it had acquired $1.25 billion in investment from seven firms: KKR, ICONIQ Capital, Smash Ventures, aXiomatic, Vulcan Capital, Kleiner Perkins, and Lightspeed Venture Partners. The firms join Tencent, Disney, and Endeavor as minority shareholders in Epic. With the investment, Epic Games was estimated to have a nearly $15 billion valuation in October 2018.

Besides expanding support for Fortnite and the Epic Games Store, these investments allowed Epic to acquire additional firms. In January 2018, it was announced that Epic had acquired Cloudgine, a developer of cloud-based gaming software. The company also announced the acquisition of Kamu, a firm that offered anti-cheat software called Easy Anti-Cheat, in October 2018. A year later, in January 2019, Epic acquired 3Lateral and Agog Labs. 3Lateral is known for its "digital human" creations, using a combination of digital technology, motion capture, and other tools to create photo-realistic human subjects in real-time. Epic plans to add some of 3Lateral's features to the Unreal Engine. Agog had developed SkookumScript, a platform for scripting events in video games; on the announcement of this acquisition, Agog stated they will stop the development of SkookumScript to work more on Unreal Engine scripting support.

Epic acquired Psyonix, the developer of Rocket League, in May 2019. Epic and Psyonix have had a past history, as Psyonix was originally founded a few miles from Epic's headquarters and had contributed to Epic's Unreal Tournament. Besides ongoing support for Rocket League, Psyonix developed an arcade-style car racing game inside of Fortnite, named Rocket Racing, which was added in December 2023.

Epic acquired the Twinmotion visualization tool used in architectural design in May 2019 from Abvent, and which they plan to expand and incorporate into their Unreal Engine offerings. Epic acquired Life on Air, the developers behind Houseparty, a social networking service, in June 2019. The monetary terms of the acquisition were not disclosed. Epic later shuttered Houseparty's app in October 2021, though the team behind it was continuing to develop social apps for Epic's platforms.

In November 2019, Epic acquired Quixel, the world's largest photogrammetry asset library which makes 3D models of objects based on real-world high-definition photography. Epic plans to open Quixel's existing library of models to users of Unreal Engine, while the Quixel staff will continue to build out its assets within Epic. The company acquired Cubic Motion, a studio that provides highly detailed digital facial animations for both films and video games, in March 2020.

Epic acquired SuperAwesome, a firm that has developed services to support children-safe games and services around games, in September 2020, as to incorporate these elements more into Epic's portfolio and to offer to other developers, particularly for games built around Epic's vision of metaverse games.

Epic acquired the digital facial animation firm Hyprsense in November 2020.

In January 2021, Epic acquired RAD Game Tools, a company that makes a variety of middleware solutions for video game development which Epic plans to incorporate into the Unreal Engine. RAD's tools will still remain available outside of Unreal as well.

In March 2021, Epic announced it was acquiring the Tonic Games Group, which includes developers Mediatonic and Fortitude Games. Mediatonic's Fall Guys, a major success during 2020, would remain available on Steam while Epic would help to bring it to additional platforms. Epic buying Tonic Games Group falls under the company's broader plans of creating its own metaverse. Additionally in March, Epic acquired Capturing Reality, the developers of RealityCapture, a photogrammetry suite that can create 3D models from numerous photographs. Epic plans to integrate RealityCapture into the Unreal Engine.

Epic Games acquired ArtStation, a professional artists' marketplace, in April 2021. As part of the acquisition, ArtStation members would gain access to Epic's tools and support such as the Unreal Engine, while the ArtStation marketplace will reduce its take on purchases from 30% to 12%. In July 2021, Epic acquired Sketchfab, a marketplace for 3D models. As with ArtStation, the acquisition allowed Sketchfab to reduce its pricing structure, lowering its revenue cut on purchases to 12% and making their Sketchfab Plus level of membership free.

In November 2021, Epic Games acquired Harmonix, a music game developer, for undisclosed terms. Harmonix continued to support their existing games including Rock Band 4 and Fuser while building out Fortnite's musical experiences, adding a Fortnite Festival mode that mimics the note-matching gameplay of Rock Band in December 2023, and Epic's larger metaverse plans,

Epic acquired the indie music platform Bandcamp in March 2022. Bandcamp was expected to remain independently operated under Epic while gaining the benefits of Epic's backend services. In April 2023, Epic acquired Brazilian studio Aquiris and changed its name to Epic Games Brasil, with the intention to be used in Fortnite. In September 2023, Epic sold Bandcamp to music licensing company Songtradr.

Products

Video games

Epic Games is known for games such as ZZT developed by founder Tim Sweeney, various shareware titles including Jazz Jackrabbit and Epic Pinball, the Unreal video game series, which is used as a showcase for its Unreal Engine, the Gears of War series which is now owned by The Coalition and Xbox Game Studios, Infinity Blade, Shadow Complex, Bulletstorm, and Fortnite.

Unreal Engine

Main article: Unreal Engine

Epic is the proprietor of five successful game engines in the video game industry. Each Unreal Engine has a complete feature set of graphical rendering, sound processing, and physics that can be widely adapted to fit the specific needs of a game developer that does not want to code their own engine from scratch. The five engines Epic has created are Unreal Engine 1, Unreal Engine 2 (including its 2.5 and 2.X releases), Unreal Engine 3, Unreal Engine 4 and Unreal Engine 5. Epic also provides support to the Unreal marketplace, a digital storefront for creators to sell Unreal assets to other developers. Further, since 2019, Epic has provided support for filmmakers which have utilized the Unreal Engine to create virtual sets for productions such as The Mandalorian, and will be backing major animated feature film production using Unreal, starting with Gilgamesh with studios Hook Up, DuermeVela and FilmSharks.

Epic Games Store

Epic announced its own Epic Games Store, an open digital storefront for games, on December 4, 2018, which launched a few days later with The Game Awards 2018 presentation. Differing from Valve's Steam storefront, which takes 30% of revenues (30/70 revenue-sharing agreement) from the sale of a game, the Epic Game Store will take 12%, as well as foregoing the 5% for games developed in the Unreal Engine, anticipating that these lower revenue-sharing agreements will draw developers to it.

Epic Online Services

Epic Online Services is a free SDK based on Epic's Fortnite code that allows developers to implement cross-platform play features in their games, including matchmaking, friends lists, leaderboards, and achievements, with support for Windows, macOS, PlayStation 4, Xbox One, Nintendo Switch, iOS, and Android systems. It was first released for all in May 2020. Support for anti-cheat and voice chat was added in June 2021.

Productivity products

Other productivity products include ArtStation, Sketchfab, Twinmotion, RealityCapture, RealityScan and Quixel. Epic and Autodesk partnered in September 2022, making Twinmotion available to Revit subscribers.

The MetaHuman Creator is a project based on technology from three companies acquired by Epic—3Lateral, Cubic Motion, and Quixel—to allow developers to quickly create realistic human characters that can then be exported for use within Unreal. Through partnership with Cesium, Epic plans to offer a free plugin to provide 3D geospatial data for Unreal users, allowing them to recreate any part of the mapped surface of Earth. Epic will include RealityCapture, a product it acquired with its acquisition of Capturing Reality that can generate 3D models of any object from a collection of photographs taken of it from multiple angles, and the various middleware tools offered by Epic Game Tools.

Subsidiaries and divisions

Locations

Name	Location	Founded	Acquired	Ref(s).
Epic Games Australia	Burwood, Australia	2018	—
Epic Games Brasil	Porto Alegre, Brazil	2007	2023
Epic Games China	Shanghai, China	2006	—
Epic Games Germany	Berlin, Germany	2016
Epic Games Japan	Yokohama, Japan	2010
Epic Games Korea	Seoul, South Korea	2009
Epic Games Montreal	Montreal , Canada	2018
Epic Games Publishing	—	2020
Epic Games Seattle	Bellevue, Washington, US	2012
Epic Games Stockholm	Stockholm, Sweden	2018
Epic Games San Francisco	San Francisco , US	2012
Epic Games UK	Sunderland, England	2014

Subsidiaries

Name	Area	Location	Founded	Acquired	Ref(s).
3Lateral	Motion capture digitization	Novi Sad, Serbia	2008	2019
ArtStation	Professional artist marketplace	Montreal , Canada	2014	2021
Capturing Reality	Photogrammetry software	Bratislava, Slovakia	2015	2021
Cubic Motion	Facial animation	Manchester, England	2009	2020
Harmonix	Music game developer	Boston, Massachusetts	1995	2021
Psyonix	Video game development	San Diego, US	2000	2019
Quixel	Photogrammetry assets	Uppsala, Sweden	2011	2019
Epic Game Tools (formerly RAD Game Tools)	Game middleware	Bellevue, Washington	1988	2021
Sketchfab	3D model marketplace	Paris, France	2012	2021
Tonic Games Group (Mediatonic)	Video game development	London, England	2005	2021

Former

Name	Location	Founded	Acquired	Divested	Fate	Ref.
Agog Labs	Vancouver , Canada	2013	2019		Software development moved internally to Epic Games.
Bandcamp	Oakland, US	2008	2022	2023	Sold to Songtradr
Chair Entertainment	Salt Lake City, US	2005	2008	Unknown	Closed
Cloudgine	Edinburgh, Scotland	2012	2018		Software development moved internally to Epic Games.
Hyprsense	Burlingame, California	2015	2020		Software development moved internally to Epic Games.
Impossible Studios	Baltimore, US	2012	—	2013	Closed	Template:Centered
Kamu	Helsinki, Finland	2013	2018		Software development moved internally to Epic Games.
Life on Air	San Francisco , US	2012	2019		Software development moved internally to Epic Games.
People Can Fly (Epic Games Poland)	Warsaw, Poland	2002	2012	2015	Sold to management	Template:Centered
RAD Games Tools	Kirkland, Washington, US	1988	2021		Software development moved internally to Epic Games.
SuperAwesome	London, England	2013	2020	2023	Spun off

Legal issues

Litigation with Silicon Knights

On July 19, 2007, Canadian game studio Silicon Knights sued Epic Games for failure to "provide a working game engine", causing the Ontario-based game developer to "experience considerable losses". The suit alleged that Epic Games was "sabotaging" Unreal Engine 3 licensees. Epic's licensing document stated that a working version of the engine would be available within six months of the Xbox 360 developer kits being released. Silicon Knights claimed that Epic missed this deadline and that when a working version of the engine was eventually released, the documentation was insufficient. The game studio also claimed Epic had withheld vital improvements to the game engine, claiming they were game-specific, while also using licensing fees to fund the development of its own titles rather than the engine itself.

In August 2007, Epic Games counter-sued Silicon Knights, alleging the studio was aware when it signed on that certain features of Unreal Engine 3 were still in development and that components would continue to be developed and added as Epic completed work on Gears of War. Therefore, in a statement, Epic said that "SK knew when it committed to the licensing agreement that Unreal Engine 3 may not meet its requirements and may not be modified to meet them". Additionally, the counter-suit claimed that Silicon Knights had "made unauthorized use of Epic's Licensed Technology" and had "infringed and otherwise violated Epic's intellectual property rights, including Epic's copyrighted works, trade secrets, know how and confidential information" by incorporating Unreal Engine 3 code into its own engine, the Silicon Knights Engine. Furthermore, Epic asserted the Canadian developer broke the contract when it employed this derivative work in an internal title and a second game with Sega, a partnership for which it never received a license fee.

On May 30, 2012, Epic Games defeated Silicon Knights' lawsuit and won its counter-suit for $4.45 million on grounds of copyright infringement, misappropriation of trade secrets, and breach of contract, an injury award that was later doubled due to prejudgment interest, attorneys' fees and costs. Consistent with Epic's counterclaims, the presiding judge, James C. Dever III, stated that Silicon Knights had "deliberately and repeatedly copied thousands of lines of Epic Games' copyrighted code, and then attempted to conceal its wrongdoing by removing Epic Games' copyright notices and by disguising Epic Games' copyrighted code as Silicon Knights' own". Dever stated that evidence against Silicon Knights was "overwhelming", as it not only copied functional code but also "non-functional, internal comments Epic Games' programmers had left for themselves".

As a result, on November 7, 2012, Silicon Knights was directed by the court to destroy all game code derived from Unreal Engine 3, all information from licensee-restricted areas of Epic's Unreal Engine documentation website, and to permit Epic Games access to the company's servers and other devices to ensure these items have been removed. In addition, the studio was instructed to recall and destroy all unsold retail copies of games built with Unreal Engine 3 code, including Too Human, X-Men Destiny, The Sandman, The Box/Ritualyst, and Siren in the Maelstrom (the latter three titles were projects never released, or even officially announced).

On May 16, 2014, Silicon Knights filed for bankruptcy and a Certificate of Appointment was issued by the office of the Superintendent of Bankruptcy, with Collins Barrow Toronto Limited being appointed as trustee in bankruptcy.

Apple and Google disputes

Since as early as 2017, Tim Sweeney had questioned the need for digital storefronts like Valve's Steam, Apple's iOS App Store, and Google Play, to take a 30% revenue sharing cut, and argued that when accounting for current rates of content distribution and other factors needed, a revenue cut of 8% should be sufficient to run any digital storefront profitably. When Epic brought Fortnite Battle Royale to mobile devices, the company initially offered a sideloaded package for Android systems to bypass the Google Play store, but eventually also made it a store app.

On August 13, 2020, Epic Games updated Fortnite across all platforms, including the iOS and Android versions, to reduce the price of "V-Bucks" (the in-game currency) by 20% if they purchased directly from Epic. For iOS and Android users, if they purchased through the Apple or Google storefront, they were not given this discount, as Epic said they could not extend the discount due to the 30% revenue cut taken by Apple and Google. Within hours, both Apple and Google had removed Fortnite from their storefronts stating the means of bypassing their payment systems violated the terms of service. Epic immediately filed separate lawsuits against Apple and Google for antitrust and anticompetitive behavior in the United States District Court for the Northern District of California. Epic did not seek monetary damages in either case but instead was "seeking injunctive relief to allow fair competition in these two key markets that directly affect hundreds of millions of consumers and tens of thousands, if not more, of third-party app developers." In comments on social media the next day, Sweeney said that they undertook the actions as "we're fighting for the freedom of people who bought smartphones to install apps from sources of their choosing, the freedom for creators of apps to distribute them as they choose, and the freedom of both groups to do business directly. The primary opposing argument is: 'Smartphone markers [sic] can do whatever they want.' This is an awful notion. We all have rights, and we need to fight to defend our rights against whoever would deny them."

Apple responded to the lawsuit that it would terminate Epic's developer accounts by August 28, 2020, leading Epic to file a motion for a preliminary injunction to force Apple to return Fortnite to the App Store and prevent them from terminating Epic's developer accounts, as the latter action would leave Epic unable to update the Unreal Engine for any changes to iOS or macOS and leave developers that relied on Unreal at risk. The court granted the preliminary injunction against Apple from terminating the developer accounts as Epic had shown "potential significant damage to both the Unreal Engine platform itself, and to the gaming industry generally", but refused to grant the injunction related to Fortnite as "The current predicament appears of [Epic's] own making." In September 2020, Epic Games, together with thirteen other companies, launched the Coalition for App Fairness, which aimed for better conditions for the inclusion of apps into app stores.

U.S. District Court Judge Yvonne Gonzalez Rogers issued her first ruling on Epic Games v. Apple on September 10, 2021. Rogers found in favor of Apple on nine of ten counts brought up against them in the case, including Epic's charges related to Apple's 30% revenue cut and Apple's prohibition against third-party marketplaces on the iOS environment. Rogers did rule against Apple on the final charge related to anti-steering provisions, and issued a permanent injunction that, in 90 days from the ruling, blocked Apple from preventing developers from linking app users to other storefronts from within apps to complete purchases or from collecting information within an app, such as an email, to notify users of these storefronts. Rogers' ruling was upheld at the Ninth Circuit on appeals, and the Supreme Court of the United States declined to hear the case, leaving Rogers' order against Apple in place.

Google initially sought to negotiate with Epic but later filed their own countersuit against Epic for breach of contract. The Google case was set as a jury trial, held in November and December 2023. Prior to this, other groups had filed their own lawsuits against Google for similar reasons as Epic, including a coalition of states and the Match Group, but these were settled just ahead of the trial. The jury found for Epic on all claims made, determining that Google maintained a monopoly on the Android marketplace by how it managed the Play Store and used its leverage as a big tech firm to make deal with partners, including some deals made as a result of the earlier settlements. A second phase of this trial to determine remedies is scheduled to occur in January 2024.

FTC child privacy settlement

In December 2022, Epic Games was fined a combined $520 million after the Federal Trade Commission accused the company of separate accounts related to Fortnite, one for violating COPPA related to children's privacy by collecting personal data without parent or guardian consent, exposing children and teens to potential harassment, and a second related to misleading users into making unwanted purchases while playing the game. Epic Games said "No developer creates a game with the intention of ending up here. The laws have not changed, but their application has evolved and long-standing industry practices are no longer enough. We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players. Over the past few years, we've been making changes to ensure our ecosystem meets the expectations of our players and regulators, which we hope will be a helpful guide for others in our industry."

Criticism

Since the partial investment by the Chinese company Tencent, some consumers have become wary of Epic Games' reliability and use of their data, particularly in relationship with the Epic Games Store. These concerns have been connected to broader issues of general distrust of the Chinese government and Chinese corporations among some Western video game players. Epic has stated that Tencent does not have access to any of this private data nor provides this to the Chinese government.

In late March 2020, accusations began circulating on social media that the Epic Games social networking app Houseparty led to other services such as Netflix and Spotify being hacked. However, both Epic and Life on Air claimed this was a smear campaign against its product and offered a $1 million bounty for anyone able to substantiate their claim.

Further reading

• Keighley, Geoffrey. "Blinded By Reality: The True Story Behind the Creation of Unreal". http://www.gamespot.com/features/makeunreal/. 
• Berardini, César A. (June 30, 2005). "Everything You Wanted to Know About Unreal". http://features.teamxbox.com/xbox/1199/Everything-You-Wanted-to-Know-About-Unreal/p1/. 
• Porter, Will (October 26, 2007). "The Epic tradition". https://www.gamesradar.com/the-epic-tradition/. 
• Blancato, Joe (May 13, 2008). "Epic's Rainmakers". http://v1.escapistmagazine.com/articles/view/video-games/issues/issue_149/4896-Epic-s-Rainmakers. 
• Edwards, Benj (May 25, 2009). "From The Past To The Future: Tim Sweeney Talks". https://gamasutra.com/view/feature/132426/from_the_past_to_the_future_tim_.php. 
• Totilo, Stephen (December 7, 2011). "The Quiet Tinkerer Who Makes Games Beautiful Finally Gets His Due". https://kotaku.com/the-quiet-tinkerer-who-makes-games-beautiful-finally-ge-5865951. 
• Plante, Chris (April 2, 2012). "Better with age: A history of Epic Games". https://www.polygon.com/2012/10/1/3438196/better-with-age-a-history-of-epic-games. 
• Freeman, Will (August 12, 2013). "Development Legends: An Unreal tale". https://www.mcvuk.com/development-legends-an-unreal-tale/. 
• Crecente, Brian (May 1, 2016). "Their future is Epic: The evolution of a gaming giant". https://www.polygon.com/a/epic-4-0. 
• Huddleston, Tom Jr. (August 9, 2018). "'Fortnite' launched battle royale a year ago today – here's how the company behind the billion-dollar game was founded by a college kid". https://www.cnbc.com/2018/06/12/epic-games-company-behind-fortnite-was-founded-by-a-college-kid.html. 
• Griffith, Erin (August 25, 2020). "To Fight Apple and Google's Grip, Fortnite Creator Mounts a Crusade". https://www.nytimes.com/2020/08/25/technology/fortnite-creator-tim-sweeney-apple-google.html.