I might have misread the article but it sounded like they have to pay them. Unless you don't intend to sell it. Which most devs do. Am I missing something?

Yes, you do have to pay Epic royalty if you sell the game and make more than $5000, but the kit itself is free to use.  What I'm saying is that MS will most likely not keep those same conditions.  We all know how strict MS is when it comes to letting others use their tools.  I would not be surprised if MS makes the Unreal Engine proprietary and devs who want to use it will have to sign an exclusive contract with MS and only be allowed to release their games on MS consoles.    

Microsoft definitely needs to make moves to bolster their first party lineup. I approve.

MS is an obvious choice, but Epic have also got themselves contractually supplying their engine to a whole host of developers, many of them producing multi-platform games, which I suspect would horribly complicate such a purchase with regards to on-going support for those clients.

Also, Activision or EA would surely be interested, and overall represent even more obvious purchasers with the ability to more easily accommodate Epic's middleware business as well as leverage the fact that Unreal is a multiplatform engine.

This does illustrate the continuing trend for consolidation and the absorption of smaller companies into large global businesses.

I think Microsoft should make a new studio model. They should buy between 30-51% of a bunch of companies and keep them like Bungie and get 1st right of refusal for I.P but otherwise let them work together or not as they see fit. That way the indies stay independant but they get a cut and control over the I.P without the expense and responsibility of becoming sole owners.

I guess that if EA got them they would be shut down in a few years.

Would that be more complicated than say an EA game developer trying to access an Activision owned Epic for say Unreal Engine 4? Im not really sure if any publisher has what it takes to own the company as they all tend to have in-house engines anyway whilst a console manufacturer has the conflict where Epic would not gain early access to console hardware to develop the engine for that architecture.

yea, I agree.  Somehow I don't think MS will continue to let those clients develop multi-platform games if the Unreal Engine becomes a MS-owned property.  IMO, acquiring Epic doesn't make much sense financially for MS.  They're better off continuing their current relationship with Epic and contract them to make exclusive games for them.  The Unreal Engine is profitable because Epic shares it and allows anyone to utilize it.  That's the polar opposite of MS's monopolistic business model.   

Yeah I forgot about the Unreal Engine, like a million games use that. Good point.

I was only thinking of the Gears series which IMO isn't as great as everyone says.

Easy answer to Mr Talyor. Find a new business model. Stop relying on burst sales alone. Find a a way to have a continues income rather than relying on sales reserves. Do both. Have a continued product model like DLC, Pay for Content, online games, small games, web games. Then use those profits to have stable business. THen use the big burst games into the reserves when needed.

If your only going to rely on burst sales then you sorta deserve to get what you deserve in a closing company. Most other industries don't rely on such an insane model of business. Even the movie industry has other products besides the movies alone. They have VG, toys, shirts, DVD's. So what in your religions holy names think that relying on a single product to last you development of your next game is a good idea?

*shakes head*