Epic recently released the first public release of its Unreal Engine 5, a sprawling multi-tool development environment for games and other 3D content…immediately followed by a $2 billion investment from Sony and the Lego Family. Why is a new version of a game development tool making so much noise, and why should you care?
First, on the software itself. Engines are a general name for the tools developers use to create and manipulate the visuals, sounds, physics, and other aspects of a 3D production, whether it’s a game, a movie or something less defined like an augmented reality experience.
Not so long ago, you could create your 3D models in one program, animate them in another, create the sounds in another, and then do the same for game logic, lighting, physics, and a dozen other aspects of what you build. Over time, game engines have grown to encompass more and more of this process in one place, although specialized tools are often better at one aspect.
Unreal Engine 5 (often abbreviated as UE5) is the most powerful and integrated engine to date, combining high-end graphics and visual design with audio, lighting, animation and other capabilities.
In particular, UE5 enables much improved graphical fidelity by removing the need for developers to separately define how an object is lit, by replacing a universal light engine, and the level of visible detail, by dynamically reducing the model of highest fidelity. These alone represent a large part of the work of creating a game; dynamic lighting is labor intensive, and designers often have to create multiple versions of each object and character with varying levels of detail.
There are also built-in animation systems and sound design that connect directly to other parts of the engine, so you don’t need to worry about importing your work from another tool. Special processes for making compelling human faces and bodies, among others, are also provided.
So why should you care about all this?
1. This is what will make “next-gen” games a new generation
One would understandably think from huge and amazing games like “Horizon: Forbidden West” and “Elden Ring” that “next-gen gaming” is already here. But the capabilities of UE5 (among other engines in development) have yet to be put to real use. Indeed, games that will utilize the full capabilities of Unreal 5 have just been announced as being in development.
What exactly makes a game next-gen isn’t easy to say. But it’s not just good graphics. Think of a game where the lighting is completely dynamic, nothing but what the player creates – would make a good horror title, wouldn’t it? Or how about a game where the environment can be destroyed or built at will, and not just as a pile of giant cubes but as planks of wood, piles of dirt, sheets of metal? A detective novel where every part of a city can be entered, every unique person questioned?
There are dozens of approaches that simply aren’t possible with today’s tools, or that are too computationally or creatively expensive. Epic tackled these difficulties with UE5.
It may be hard to imagine anything more impressive than the sights of the aforementioned games, but a new generation of games goes beyond best-case scenario screenshots. Smooth motion, realistic materials and interactions, and perhaps most importantly, free developers to focus on gameplay concepts rather than the nuts and bolts needed to make a huge, complex game palatable. UE5 is a big step towards making all of this possible, and there will be a stark difference in the near future between games that simply look good and games that look like a different generation entirely.
2. But it’s not just the games
I’ll avoid the M-word (you know what I mean), but the simple truth is that Epic is at the forefront of exploring digital entertainment that isn’t just games. Concerts (real and virtual), VR/AR features, apps, and other assets should be created using a similar set of tools as games.
Just as improved developer tools enabled a proliferation of apps after the commoditization of smartphones, these new kinds of digital experiences need an accessible toolkit to go from occasional high-cost promotion (like a link with an AR movie) to something anyone can do. Unreal aims to be a platform that any digital entertainment can be built on, and you’ll likely see “powered by Unreal Engine 5” appear on many productions large and small over the next couple of years.
A simple example is something like Metahuman, Unreal’s tool for creating very realistic game characters. These models could be NPCs in an RPG city, of course, but they could also be virtual doctors in a healthcare application, virtual assistants unique to each user, articulated models for artists, realistic pedestrians in simulators that robots and self-driving cars learn from. …building virtual people is hard, and Unreal makes it easy. This kind of change opens up a lot of possibilities.
As many industries struggle – and find new freedom – in the process of digitizing their traditional in-person processes, UE5 offers a unified set of tools that can help. Imagine Ikea going virtual for its famous catalogs – if you could do that and save your business millions, right? Suddenly, it’s a much more realistic idea than it once was.
3. This will continue to change virtual production in film and television
“The Mandalorian” proved that virtual production, essentially shooting a show inside a giant circular wall of screens, is a real option for prestige media. Since then, many other productions have turned to VP, with Netflix in particular embracing it to the point of funding a massive turntable for the next show from the ‘Dark’ creators.
Much of this is powered by tools from Epic, including Unreal Engine. The need for a high-fidelity 3D background that can respond in real time to camera movement and other changes (e.g. shifting parallax or focal length) essentially means running an ultra- sophisticated on specialized equipment, rendering on a monitor the size of an entire movie theater.
While Unity and other more Hollywood-focused companies are also looking to make inroads here, Epic has a firm foothold in the door and has worked closely with many production houses to advise and solicit feedback. The improvements and additions of Unreal 5 will be very beneficial for virtual productions, which are sort of cinematic game environments.
You can bet virtual production will get a big boost from Unreal 5, improving not only the quality but also the accessibility of this rapidly developing technique.
4. It’s another move in the global chess game against Apple, Valve and others
It might be shocking to think that the Epic that makes Unreal is the same Epic that makes Fortnite, which is the same Epic that takes on Steam with a hugely subsidized game store, and it’s the same Epic that makes theatrical stances against the tyranny of Apple’s Fresh Store app. They have a lot of hot irons!
One of the Unreal Engine’s secret weapons is its freemium model. Any developer can download and use it, and if you end up releasing a commercial product like a game, you only start paying Epic after the first million in revenue or a limited amount in other circumstances. It’s very appealing to indie developers who want to minimize upfront costs and simplify their build process.
This in turn provides a pipeline of new Unreal users, who, if successful, generate passive income that can be reused to subsidize other company efforts. Sure, Fortnite is the big cash cow at the moment – but with new games “Witcher, Tomb Raider” and “Gears of War” (among a dozen other high-profile titles) using the technology, this could funnel huge sums of money into the company.
Epic used this cross-industry subsidy method to promote a new business model for distributing games and apps, one without onerous “Apple tax” or Steam fees, but something smaller, maybe even something waived for small developers. It challenged Steam’s benevolent hegemony in the world of PC gaming and established strong ties with Nvidia, and now Sony and Lego.
What do they have to do with it? The better the graphics, the more Nvidia graphics cards are sold; Lego has dabbled in games and virtual worlds, but clearly thinks there’s still a revolution to come; Sony has struggled to provide the right tools to developers and the war with Microsoft is really heating up – if it can buy a strong partnership with Epic, PS5 games could look and play better than Xbox ones for a variety of reasons . Epic deliberately chooses its allies and enemies.
Everyone is betting on Epic’s horse because he’s way ahead. And Epic is betting the models who rocked the world a decade ago will agree to a haircut just to be competitive.
In short, you should care about Unreal 5 because it represents traditionally gaming-only technology taking a big, deliberate step towards the rest of the world and towards you. Even if you don’t use it yourself, prepare for your app, CAD process, retail, video chat, and everything in between to get a little more epic.