Is the Unreal Engine the future of the economy?
The company that built Fortnite could power businesses in every industry.
Personally, I could never get into Fortnite. I’ve never been good at first-person shooters in general, and trying to shoot someone in the face and build a wall in front of me at the same time for protection is something that my limited hand-eye coordination just couldn’t handle.
Still, I got to respect the company behind Fortnite, Epic Games. They’ve built an engine that has the potential to revolutionize the economy way beyond gaming.
The video game landscape
Before we get started discussing Epic Games, we should take a brief look at the gaming industry as a whole. In my lifetime, there’s been an insane level of advancement in video game technology. When I was a kid, the games I played on the original Playstation had terrible animations and ridiculously simple plots. Video games were mostly considered a stupid distraction for children.
The level of graphics and overall talent in the gaming industry has improved exponentially since I was a kid. Even though people stuck in the 90s might see gaming as a stupid distraction, it’s now arguably the most innovative art form out there. These days, the benefits that gaming offers make it a serious challenger to traditional forms of entertainment like sports, film, and television.
Competitive sports: Most sports fans treat eSports like a joke. Even though I probably would never watch it, the viewership numbers show that it’s got a following that’s just as big as traditional sports. The 2019 League of Legends World Championship had 100 million viewers. That’s the same amount of viewers that the Super Bowl had that same year.
Rich storytelling: Anyone who’s played games like The Witcher and Last of Us can tell you that the best games have better storylines than anything you can find on Netflix. In fact, both of those games were later adapted into television series.
Junk food TV: Not every TV show has to be an amazing work of art — sometimes people get home from work and just want to watch some fun, light entertainment like Tiger King. If you’re more into video games than rednecks doing insane amounts of drugs, you can instead watch Ninja play Fortnite on Twitch. He’s got a massive audience — it’s been estimated that he earns $400,000 - $800,000 a month just through streaming.
Social connection: During the lockdowns, Americans turned to video games to connect with their friends. Among Us, a mobile game that users often play with their friends, got more than 200 million downloads in 2020.
The fact that gaming can give all of these different benefits to people explains why video games had $126 billion in sales in 2020, and the total size of the gaming industry is projected to hit $267 billion by 2026. This would make gaming bigger than film, sports, or television. That makes gaming an incredibly exciting space — it’s hard to find another industry that’s already massive but is expected to more than double in the next five years.
There’s no doubt that we’re going to see tons of cool games in the years to come, and it’s likely that Epic Games’ Unreal Engine will play a significant role in the growth of the gaming ecosystem.
What is the Unreal Engine?
Epic Games was founded by Tim Sweeney back in 1991 when he was a 21-year old college student living with his parents. Instead of getting trashed with his boys off of White Claws (or whatever the 1991 equivalent of White Claws were), he decided to spend his time building a game that looks ridiculously simple by modern standards.
The game was called ZZT. It started taking off because it was built on a programming language that made it really easy for other programmers to modify and build their own unauthorized, third-party versions of the game. By accident, Tim Sweeney had provided an easy way for developers all over the world to build their own games without having to start from scratch. All they had to do was add their own ideas and their own code to what Sweeney had already created.
The “modded” versions of ZZT gave Tim Sweeney an idea: his new company Epic Games could create an engine that third-party developers could use to easily build their own games. To make money, Epic Games would take a fee from the successful games that used the engine.
It was a risky idea because the engine would take years to create and there was no guarantee that anyone would actually want to use it. Still, Sweeney and his team stuck to their guns and in 1998 released what they called the Unreal Engine. It went on to power some of the coolest games ever released such as Batman: Arkham Asylum and Mass Effect.
What’s the point of the Unreal Engine?
Creating a video game requires a lot of work. If you’re building a first-person shooter, there’s a lot of things that you have to build from scratch: the physics of how bullets move, the music that plays inside the game, and the sounds that you hear when you fire your gun. It requires a lot of time and energy which might be better invested in improving gameplay or improving the storyline.
That’s why the Unreal Engine is so revolutionary. There’s no need for developers to spend their time on all of those minor details. The Unreal Engine includes realistic physics, sound effects, customizable backgrounds, and much more. If you want to build a game, all of the essential stuff is taken care of automatically and you can focus your attention on what really matters.
If the video game industry does see massive growth in the next five years, the Unreal Engine will put Epic Games in a great position. Epic Games takes a 5% cut of revenue for every game using the engine making more than $1 million a year. That means the more successful games are built on the engine, the more Epic Games benefits.
It’s important to note that Unreal Engine isn’t the only game engine that’s available for developers. Unreal does have one major competitor: Unity. Still, major game studios prefer to use Unreal since it’s able to support more realistic graphics. Typically, indie studios and mobile game developers use Unity because of its relative simplicity.
The Unreal Engine outside gaming
The Unreal Engine isn’t just used by video game companies. What Epic Games created is way bigger than gaming — it enables businesses in any industry to play around with fully programmable and realistic-looking virtual worlds. Here’s a few examples of how the Unreal Engine is used outside of gaming.
Television: The Mandalorian uses the Unreal Engine to create backgrounds in outer space and on the various planets that the characters travel to on the show. That way, the film crew doesn’t have to physically travel to different settings for every episode.
Drugs (the prescription kind): The UK pharmaceutical company C4X Discovery uses the Unreal Engine to see how different molecules pair with each other in a virtual setting. It’s estimated that this will drastically reduce the time it takes for a drug to go to market — a process that usually takes 10-12 years.
Self-driving cars: Self-driving cars need to have data on how a human driver would react to every situation you could possibly encounter on the road — like if some moron runs a red light and you have to do your best to not die horrifically. While it’s almost impossible to collect this data in real life, researchers at the University of Warwick are using the Unreal Engine to simulate these situations in a safe, virtual environment.
It’s hard to believe that a video game company has managed to enable all of these different use cases. Of course, this might just be scratching the surface of the Unreal Engine’s potential.
The future of the Unreal Engine?
In 2014, Facebook bought a company that made virtual reality headsets called Oculus for $2.3 billion. Back then, it seemed like the world was on the verge of a virtual reality revolution. I’m sure the 2014 version of me thought that pretty soon, I’d be able to play NBA 2K while wearing my VR glasses and see myself breaking Dwyane Wade’s ankles with my crossover.
That never happened, and it wasn’t just because I have no handles whatsoever. It’s hard to play a VR game for multiple hours — you’ll start feeling nauseous and get motion sickness. Plus, there just aren’t that many developers who are making VR games right now. That’s why most gamers stick to their PCs or consoles instead of buying a VR headset. It’s been estimated that VR accounted for just $589 million of the $126.6 billion in total video game sales in 2020.
Virtual reality hasn’t lived up to the hype just yet — but the technology is improving every year. Facebook’s new Oculus Quest 2 is said to be the best-selling VR headset ever, and it only was released in September of last year. Also, there are multiple exciting new games coming to VR this year like Assassin’s Creed VR and Star Wars: Tales from the Galaxy’s Edge Part 2.
When virtual reality becomes a widespread technology, we’re going to see more demand than ever for games that can literally immerse users in rich, realistic-looking worlds. That means there are going to be more developers who are going to turn to the Unreal Engine.
But VR gaming is just one potential use case for the Unreal Engine. If virtual reality headsets become commonplace, they have the potential to be used by companies all over the world. Next time your company forces you to do some dumb teambuilding exercise, you won’t have to show up to your local bowling alley. You’ll be able to throw on your VR headset and hang out with your coworkers in a virtual world.
It’s a world that seems like it’s straight out of science-fiction. If it does happen, Epic Games will be in the perfect position to capitalize on the opportunity.
It’s hard to believe that an engine that was built for video games now powers one of the best TV shows of the last decade and autonomous driving technology. It’s something that nobody could have comprehended back in 2001 when I was five years old and playing Tony Hawk’s Pro Skater 3. We’ve already gone beyond young Tim Sweeney’s wildest dreams — and we haven’t even seen virtual reality in full form yet.
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