If you and your affiliated companies together earn less than $1,000,000 in gross revenue over the past 12 months, you do not need to purchase seat subscriptions for your developers. This exception also includes advances and fundraising, not just direct sales revenue.
This analysis describes what Unreal Engine's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
This exception makes Unreal Engine effectively free for many small and independent developers, but the inclusion of advances and funds raised in the revenue calculation may surprise studios that receive investment or publisher advances without corresponding sales revenue.
Independent developers under the $1,000,000 annual revenue threshold can use Unreal Engine without seat subscription fees, but the threshold calculation includes all affiliated entities, advances, and funds raised, which may catch some studios off-guard.
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"i. Personal and indie exception. During any period that you, together with any entities in your corporate group, have generated less than $1,000,000 USD in gross revenue over the last 12 months, the Seat subscription requirement will not apply to your Users. For purposes of this calculation, your corporate group means any entities that control, are controlled by, or are under common control with you and revenue includes any advances received or other funds raised.— Excerpt from Unreal Engine's Unreal Engine EULA
REGULATORY LANDSCAPE: The exception operates as a contractual carve-out rather than a regulatory requirement. The inclusion of 'advances received or other funds raised' in the revenue calculation is a defined contractual term that may not align with standard accounting or legal definitions of revenue, creating potential ambiguity for studios with non-traditional funding structures. GOVERNANCE EXPOSURE: Low. The exception is clearly articulated and beneficial to small developers. The primary governance risk is that studios near the $1,000,000 threshold may inadvertently exceed it due to the broad definition of revenue (which includes fundraising) and then be in breach of the agreement by operating without required seat subscriptions. JURISDICTION FLAGS: The revenue threshold is stated in USD. Studios operating in other currencies should assess how currency fluctuations affect their threshold calculation. No jurisdiction-specific variations to this exception are stated. CONTRACT AND VENDOR IMPLICATIONS: Studios with investor funding, publisher advances, or crowdfunding campaigns should include those amounts in their revenue calculation for this exception. Studios that are subsidiaries of larger corporate groups should include parent company revenue in the calculation, which may eliminate the exception for nominally small studios within large organizations. COMPLIANCE CONSIDERATIONS: Finance teams at studios near the $1,000,000 threshold should monitor their trailing 12-month revenue (including all funds raised) on a rolling basis to ensure timely compliance with seat subscription requirements when the threshold is crossed. Legal teams should clarify the definition of 'control' for corporate group purposes to ensure all affiliated entities are correctly included in the calculation.
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This exception makes Unreal Engine effectively free for many small and independent developers, but the inclusion of advances and funds raised in the revenue calculation may surprise studios that receive investment or publisher advances without corresponding sales revenue.
Independent developers under the $1,000,000 annual revenue threshold can use Unreal Engine without seat subscription fees, but the threshold calculation includes all affiliated entities, advances, and funds raised, which may catch some studios off-guard.
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