Chris Morris Commentary:
Game Over by Chris Morris Column archive
Gaming's biggest least-known company
Players and developers know Epic Games. It's time you did as well.
Game Over is a weekly column by Chris Morris

SAN JOSE, Calif. (CNNMoney.com) - Mention Epic Games to a hardcore gamer and their eyes glaze slightly as they begin rhapsodizing over a particularly memorable kill in "Unreal Tournament". Mention the company to anyone else, though, and you'll likely get a blank stare.

Epic Games is hardly an unknown player in the video game industry, but it's one that hasn't quite broken through to the mainstream world. Odds are that's about to change.

Unreal Engine 3 offers some of the industry's most sophisticated graphics.
Unreal Engine 3 offers some of the industry's most sophisticated graphics.
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Its "Gears of War" is the leading candidate to be the best-selling Xbox 360 game this year. And the Cary, N.C.-based developer's latest graphics engine has become one of the most widely licensed products in the industry.

Privately held Epic doesn't disclose many numbers. It won't say how many companies have bought the rights to use its "Unreal Engine 3" technology (though publishers THQ (Research), Namco, Microsoft and Sony (Research) are among the firms who have signed on) and it won't say how much it charges for the license. But over the past five years, the company has grown from roughly 15 employees to 70. And that number may grow substantially in the months and years to come.

Unreal Engine 3, in a nutshell, allows developers to create graphically powerful titles with less-than-expected computing power. It might not sound like much to the layperson, but to a game developer, it's the Holy Grail.

In development for four years at a cost of more than $40 million, Unreal Engine 3 is one of the first licensed game engines that has truly appealed to next generation developers.

"With Unreal Engine 3, we designed it to fall in the sweet spot of next generation consoles," said Mark Rein, vice president of Epic. "We've been really in tune with the next generation consoles this time around."

It wasn't always so easy. The company's Unreal Engine 2, though a hit with PC game makers and the mod community (gamers who like to modify elements to enhance an existing game title) - wasn't very console friendly. While Epic did have a launch title ready for the PS2 -- and created several Xbox games using the engine -- it was always an uphill battle.

"We weren't a great fit. It took a lot of pain to get an Unreal Engine 2 game to run on the PS2," said Rein.

The new game engine, though, has allowed the company to capitalize on the next generation of consoles.

"Epic is a supplier of very high quality, high performance game development tools which allow developers to exploit the power of PlayStation 3 very quickly at a comparatively lower cost than PlayStation 2," said Phil Harrison, president of Sony Computer Entertainment Worldwide Studios. "The tools Epic provides allow developers to get games up and running quickly, so they can focus on what's important, which is gameplay and innovation."

To put it in some sort of comparison, when you include games that licensed the engine, there were approximately 60 titles that shipped using Unreal Engine 2. This generation, though...

"I expect by the time Unreal Engine 3 is dead and buried, we'll ship 200 titles. Maybe 300," said Rein.

That's not including smaller titles for services like Xbox Live Arcade, either. Several titles, including the forthcoming "HoopWorld" and "RoboBlitz," will use the engine for less than AAA games. And don't be surprised if educational titles or children's games use the engine as the Xbox 360 reaches the end of its life cycle.

While Epic will continue enhancing and improving Unreal Engine 3 for the next four or five years, work has already begun on Unreal Engine 4, which the company sees as a powering force for the fourth PlayStation and third Xbox machines. Serious development won't begin for another two or three years, but the company's programming mastermind, Tim Sweeney, is already scoping out what he expects the future to hold.

Epic grew to prominence with gamers by actively supporting and encouraging the mod community, even sponsoring a $1 million contest last year to determine which fans could most creatively alter its "Unreal Tournament 2004" game. But as the licensing division grows, there has been some community fear that the company may pull back on its support for modders. Rein said those worries are totally unreasonable.

"We're going to go nuts with mods once 'Unreal Tournament [2007]' (another Unreal Engine 3 title) ships," he said. "The developer tools are much, much easier to use. In fact, now we have the potential to offer mods via the PS3."

That might be over-enthusiasm on Rein's part, but if it happens, it could represent a fundamental shift in the console gaming business. Console games traditionally have been off-limits to wannabe programmers. Mods on PS3 or Xbox 360 games could open up a new stream of play possibilities for gamers -- and, just maybe, a load of potential headaches for companies like Microsoft (Research) and Sony.

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Chris Morris is Director of Content Development for CNNMoney.com. Click here to send him an e-mail. Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.