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Unity VS Unreal – an epic battle

Recently a very interesting competitive battle has emerged. When it comes to digital game engine market, there are two dominant players – Unity3D and Unreal Engine. Some sites estimate the split as roughly 50% VS 15% market share respectively. And it is interesting to analyse why is it so, and what Epic (company behind Unreal) is doing to catch up.

The key driver for the success of Unity has been rapid raise of popularity of mobile game industry. Epic, Crytek and others have been focusing on eyecandy tripple A console and PC game markets and kind of missed the trend of mobile, casual gaming and the ascent of indie games. And in mu opinion there are several important differentiators to win in those markets.

Good cross-integration with all kinds of gaming plaforms – which increases the appeal to “write once use many”. There is always a tradeoff of investing into bunch of Swift / Objective C developers plus a team of Kotlin / Android developers to get the same product out, not even mentioning the need for specialized teams to address all kinds of consoles, instead of having a focused team of C# or C++ guys that can deliver for both (almost) simultaneously, and a small DevOps team for each platform to do the differences.

Developer friendly programming languages. And Unreal engine C++ just isn’t in that category. We see a new breed of developers popping up that don’t take academic path where C++ and computer science is a thing, they learn their first language by doing some projects or games, and they choose managed languages like Java or C#, or even dynamically typed ones like JavaScript or (to some degree) Python. C++ for them is a something of the art of black magic. Also proprietary scripting languages are not a good idea, as you need to invest in them constantly as well as they are not useful for developers CV, as they are platform specific.

Decent 2D mode support. It is important to understand that 3D and 2D games are not the same, although in terms of hybrid engines, like Unity and Unreal they kind of are. However in case of Unity it does have the ease of use in development of 2D content, having necessary optimizations for lower level hardware in 2D mode, and good templates and sprite support for 2D content ecosystem. 2D casual games became the big thing, and Unity started their business by supporting them quite well, thus carved its brand into developer’s mind as good Indie 2D/3D engine versus Unreal having tripple-A PC and console game vibe.

Friendly pricing. Unity is free up to a certain point, which at the moment of writing this article is 100 000 dollar yearly revenues / funding or 1500 Dollars per year per user license. At the same time Epic wants a cut from your revenues which is 5% from everything above 3000 USD made in a quarter. If you compare those pricing options, Unity is much friendlier no matter how you twist the math. And having a perpetual “revenue tax” is not something gaming studios are looking forward to in the long term. This can and will, off course, add up and even out when the studio gets bigger and you need tens or hundreds of Unity licenses to support your game, but for time being Unity IMO has a better offer, unless…

And here comes the interesting part. Having cash for a game engine is only one part of the expense equation. Having cash to develop the content in the first place is something completely other. And Epic has cash to give away for “free”, lots of it, which Unity simply doesn’t.

Unity have been running on external funding, as its core business is making a game engine. However Epic has been making games starting with Unreal, from which the engine and name comes from. And recently (in 2017) they hit the jackpot with Fortnite that is making more than 3 Billion! dollars in revenue for Epic to date. So they have cash and they are giving it away with a caveat, if you use Unreal engine in your game, experience, graphical software tool or what not. It is called the Epic Megagrants program and it has a fund of 100 Million US dollars to be distributed out to developers in chops up to 100k, no strings (except using Unreal engine for the product) attached. Free money, if you like.

This is an important twist of events that might turn the tables somewhat in favor of Unreal engine and probably improve their market share over time, at least in the metric of revenues if not on the metric of number of users (Unity has 6 million of those already, so giving less than 20 USD to each of them will probably not result on high conversion rates). However it is an appealing offer and for many, many companies or projects it might be even a case for having the product or not.

How will Unity respond. Well, its CEO, John Riccitiello in a relatively recent interview points out that Unity will keep investing in the ease of use, better optimizations and all kinds of integrations and beauty in the engine itself, and bribing companies away from it with cash is not going to help Unreal’s marketplace. On the other hand, he is a man who has taken more than half billion dollars of external funding to this date instead of making a lot of cash with his product, so his position might be one of weakness.

Only time will tell how things are going to turn out. And Fortnite, as well as Minecraft, Roblox and other grand examples show that there is a thing called hypercasual social 3D games running on inexpensive gear that can seriously compete with Candy Crush and Angry Birds if you like. And don’t forget that there is no such thing as 2D VR games. So… we’ll see.