Unreal Engine’s royalty fee reduction, Balatro makes it on mobile and Zenless Zone Zero’s revenue | Week in Views

The games industry moves quickly and while stories may come and go there are some that we just can’t let go of…

So, to give those particularly thorny topics a further going over we’ve created a weekly digest where the members of the PocketGamer.biz team share their thoughts and go that little bit deeper on some of the more interesting things that have happened in mobile gaming in the past week.

Craig Chapple

Head of Content

Unreal Engine royalty fee reducing to 3.5% for games landing on Epic Games Store on launch day

Epic’s changes to Unreal Engine pricing this week got me thinking again about how the top game engine makers have tried to compete over the years. And then more recently, how they’ve tried to build a sustainable model for that business.

For the longest time, Unity was on its mission to democratise development. A marketing ploy, maybe, but it bled through to the product.

It seemed as though rivals then scrambled to match it. Unreal suddenly announced a change to a $19 subscription fee at GDC 2014, also charging 5% of gross revenue. CryEngine even changed its model, making the tech available for just $9.90 per month per user. But even that wasn’t enough to scale the business.

Unity was able to build its market share for years until, an IPO and global economic instability later, it had to find a real way to stem its losses and make a real business that would generate, shock horror, a profit.

Its solution of course was the infamous and widely despised Runtime Fee. Its announcement and fallout took down the CEO, sparked thousands of layoffs and deeply wounded its reputation. The Runtime Fee has been removed now of course – precisely a year after it was first announced – with Unity bumping its licence costs instead.

What was interesting, though, was Unity felt the best way to make money (other than to dip into developer pockets for a quick payday) was to tie the engine business in part to its ad network. If you consider the options initially open to Unity in its attempts to turn a profit, does simply raising the licence fee really make the engine business profitable on its own?

Unreal has taken the moment to lower its fees to 3.5% of gross revenue – if you release on its store. It’s tied its engine revenue to the growth potential of a marketplace it’s spending billions to get off the ground – and where it’ll get a further 12% cut from sales. It’s also tied the business to Fortnite, a platform where its revenue share on purchases is greater than even Apple and Google would dare to take.

Developers have a lot to think about on mobile. In the EU, launching on an alternative store means opening themselves up to Apple’s alternative business terms – complete with their own Runtime Fee! (Sorry, ‘Core Technology Fee’). And being exclusive to Epic’a is not an option for mobile developers.

Elsewhere, it’ll be fascinating to see how challenger Godot grows, with its own unique take of a free and open source model.

The pricing wars continue in the game engine space. Can any succeed?

Balatro approaches $1 million in seven days on mobile

Roguelike card game Balatro has shuffled its way on mobile and it appears to be a very successful first week.  

The game has generated almost $1 million from its first seven days on the App Store and Google Play… Not bad for a week’s work.

Developer LocalThunk decided to blank in-app purchases and instead take a premium approach, with the game costing $9.99. Given the nature of the game, I’d go all-in on that being the right decision.

Of course, those who already subscribe to Apple Arcade can also check out the game as part of their subscription.

The game is also available on Steam, which has generated over $17 million in gross revenue, and the title has seen releases on Nintendo Switch and consoles. One negative is that, as of right now, players can’t chip away at their progress across platforms. Apparently, an update for this is on the cards in the future.

Bringing Balatro to mobile feels like the perfect fit, and clearly, it’s a decision that is paying off as it currently sits as the top-paid card game on the Google Play Store and number-one strategy game on the App Store.

I’ll be intrigued to see just how much Balatro can up the ante when cross-progression does come into play since more players may be willing to double down on purchases.

Now, did I get enough card game terminology references in there? 

Zenless Zone Zero surpasses $150 million, but it’s no Genshin Impact…

Zenless Zone Zero has surpassed $150 million in gross mobile revenue in under three months – an impressive feat to be sure, but far behind the heights of its predecessors.

Markets change and the mobile games industry has evolved plenty since 2020, but even so, Genshin Impact did in three weeks what Zenless Zone Zero has achieved in three months. And by its own quarter-year anniversary, HoYoverse’s flagship was already over halfway to $1 billion.

Yes, that’s just on mobile.

Clearly, the unprecedented pre-release hype for Zenless Zone Zero hasn’t converted into record-breaking revenue figures, but it’s far from a failure either. There’s also its revenue from other platforms to consider, and releasing only one year after Honkai: Star Rail, RPG fans can only have so much time and money to spend on games…

Even if Zenless Zone Zero hasn’t scaled HoYoverse to wild new heights, realistically, the developer is probably prioritising keeping players engaged in any of its titles. It’s got to be more profitable than losing them to other RPG makers, right?