After years of work, Epic Games is formally releasing Unreal Engine 5 so developers can build next-generation games, digital films, and the initial outposts of the metaverse.

If all of that sounds ambitious, it is. I remember the Elemental demo that Epic used to unveil Unreal Engine 4 in 2012. And 10 years later, after many tweaks to the game engine, Epic Games now has something worthy of moving on to a new number in the series.

The game engine is the tool that developers use to create their games and run them in real time as gamers play the titles on the PC, mobile devices, or consoles. It enables developers to write their game software once and then runs it across those different platforms. Normally, Epic Games might have revealed this at the recent Game Developers Conference. But Epic wasn’t sure whether COVID would prevent that from happening at the time it had to decide.

Back in December, Epic Games used Unreal Engine 5 to release The Matrix Awakens: An Unreal Engine 5 Experience demo. That demo created by Epic’s own teams over the course of a year showed what was possible. It depicted lifelike digital characters based on Keanu Reeves and Carrie Ann Moss from The Matrix films. And it showed them racing cars and escaping from the cops in a chase that went through an entire digital city.

The cinematic scenes of the demo were actually filmed inside the simulated world of The Matrix city.


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Kim Libreri, CTO of Epic Games.

The city had thousands of buildings, lots of cars, and thousands of pedestrians. And they were all designed to look lifelike, using various pieces of Unreal Engine 5, said Kim Libreri, chief technology officer at Epic Games. Epic Games is making that city and its digital underpinnings available to all developers so teams both big and small have a great foundation on which to start making their next-generation games.

“The pinnacle, the super pinnacle of that is the Matrix city that we built in its entirety. Without the actors obviously, because that’s their property. But we have drivable vehicles, the AI MetaHumans, the whole city, as a playable level. It is going out so that people can learn from it,” Libreri said. “We also wanted to make sure that anybody starting an open-world game could learn from our art and our example.”

Onstage at the State of Unreal event, 48% of announced next-generation console titles are on Unreal, said Tim Sweeney, CEO of Epic Games. He said we’re seeing the dawn of a new age that combines live and real-time technologies.

Lyra game demo

Characters created by Epic Games for its Lyra demo of Unreal Engine 5.

Today, the company also showed off a demo of a shooter game based on UE5. Epic Games has no plans to turn that into a real game, but it did the work to show off what the engine can do.

“We wanted people to learn from first principles. So we have the asset content pack that has every little atomic Quixel asset, building, telephone pole — all the things that went into that [city],” Libreri said. “We have this sort of mini-city and we show people how to build that from scratch.”

Libreri hopes that Unreal Engine 5 will dramatically level up the quality of user-generated content, and that’s important as the metaverse will require so much content that professional developers won’t be able to build it all.

It’s a starter game, built from modular components, and it’s a foundation for starting work on a multiplayer game, said Nick Penwarden of Unreal. Lyra was designed from the ground up to build custom games upon it.

In a demo, he showed how you can take the source of lighting, like the sun, and move it around and see in real time how the shadows and lighting change in the Lyra imagery. This taps the Lumen global illumination tech of Unreal Engine 5.

The licensing terms are the same, where there is no royalty collected until revenues for a game hit a certain number, like $1 million.

“I do feel that the games industry is really where [the metaverse] is going to come from,” Libreri said. “If you make a virtual place, people have to have things to do. And they have to have reasons to go back to the virtual places. So just exploring something is not enough. Gamification is so important to almost everybody. Everybody plays games at this point.”


Epic Games is debuting a new Ferrari car in Fortnite.
Epic Games debuted a new Ferrari car in Fortnite.

Epic battle-tested Unreal Engine 5 on Fortnite, its popular battle royale game that has a huge following and easily financed the engine times over.

I asked Libreri when the first Unreal Engine 5 game would arrive.

“What was the first UE5 game? Well, it dropped in December. It’s called Fortnite,” he said. “As far as our customers go, the development cycle for games is variable.”

Chapter 3 of Fortnite marked the transition without major modifications to Fortnite’s code and content, Penwarden said.

He said it’s a better way of creating content, where you make changes and immediately see the results show up in a project.

The metaverse

The Matrix Awakens artificial city.
The Matrix Awakens artificial city. It’s free with Unreal Engine 5.

And it’s not all about games, as there is more demand for real-time 3D content, whether it’s in films or other industries that are working on the metaverse, the universe of virtual worlds that are all interconnected, like in novels such as Snow Crash and Ready Player One.

The idea behind the latest game engine is to give developers and artists the tools they need to create vast digital landscapes that look and feel like the real thing.

Epic said that some major new features like Lumen and Nanite have not yet been validated for non-games workflows (this is an ongoing goal for future releases), all creators will be able to continue using workflows supported in UE 4.27. But they’ll also benefit from a redesigned Unreal Editor, better performance, artist-friendly animation tools, extended mesh creation and editing toolset, improved path tracing, and more.

“It’s an awesome foundation,” Libreri said.

Merging games and film

Agent Smiths in a car chase in the Unreal Engine 5 demo.
Agent Smiths in a car chase in the Unreal Engine 5 demo.

As far as using Unreal for films, the core philosophy is to remove barriers between the industries.

“If you are a creative person, and you make something awesome in Unreal, you’re not going to be blocked from taking that into a VR experience, or into a movie, or a game. I’m hoping that some of the great game developers that are using our engine start to make animated shows. We’ve seen my friend Tim Miller of Blur show the world with Love Death and Robots that animation is totally viable. And, you know, our friends at Riot just did a fantastic job with Arcane on Netflix. I want to see game makers take the content they’ve made UE5 and take that to the linear world because you can all make amazing characters, amazing worlds.”

Asked if Unreal Engine 5 will enable the metaverse, Libreri acknowledged that he didn’t know for sure.

“We hope that we’re an important part. We hope that our customers are seeing it as a platform for the metaverse,” he said. “But you’re also seeing lots of our customers making little metamorphoses themselves from music concerts and explorable spaces. I just love the idea that it’s turning into this really interesting community topic right now. And I don’t know. The sky’s the limit. I hope we’re a big part of it. What matters is that developers and creators around the world also are part of doing this. So we’re just excited to see if this helps catalyze it.”

A long time in testing

Lumen global illumination in Unreal Engine 5.

Libreri said that Unreal Engine 5 has been out in the wild for some time in early access and pre-release modes for almost a year.

“But we’re happy to say we feel that we’ve got a good candidate we’re releasing,” Libreri said. “We’re going to talk about our key features and some of the content we’re releasing.”

Libreri said it has been fun to watch so many industries, from industrial design to film production, converge on the game engine, like ILM’s team that made the special effects for The Mandalorian.

There are more than 100 LED stages around the world that are shooting imagery and translating it into digital form with Unreal Engine 5.

“We just felt there must be a way to take out the difference between game making and filmmaking,” Libreri said. “In the future, as we head to sort of this metaverse of things, there aren’t going to be barriers between creative people in terms of where they want to take their content.”

Libreri said he was impressed with the amount of data that could be processed, like bringing in 100 million triangles (the fundamental building blocks of 3D graphics) into the game engine without bogging it down.

“We can put billions of triangles in a scene,” he said. “This is a game-changer to go from Unreal Engine 4 to Unreal Engine 5.”

Key new features

Animation in Unreal Engine 5.

The Unreal Engine 5 introduces a collection of groundbreaking features for rendering real-time worlds in incredible high-fidelity detail, Libreri said.

“We have new open-world tools that make it way easier to have multiple team members work in an open-world version of the game,” Libreri said. “We couldn’t have made the matrix demo without it. We have a nice refresh on the user interface. We’ve looked at some key workflows to try and improve them to make sure that iteration time in the engine is better. We have worked on our community hub in our community platform to make it almost like a social network for anybody creating an Unreal Engine title, where people can post questions, and share ideas.”

He added, “We’re hoping it becomes a hive of activity for people to learn about the engine, learn about game making, make friends, make awesome stuff, and create awareness of this technology is transforming the creative process for everybody,” he said.

As for automation, Libreri said Epic wants to take the drudgery out of making content.


Global illumination makes lighting more realistic via Lumen.

Lumen is a fully dynamic global illumination solution that enables you to create believable scenes where indirect lighting adapts on the fly to changes to direct lighting or geometry—for example, changing the sun’s angle with the time of day, turning on a flashlight, or opening an exterior door.

With Lumen, developers no longer have to author lightmap UVs, wait for lightmaps to bake, or place reflection captures; devs can simply create and edit lights inside the Unreal Editor and see the same final lighting players will see when the game or experience is run on the target platform.

When the light from the dynamic global illumination changes, the scene reacts immediately. The system renders diffuse interreflection with infinite bounces and indirect specular reflections in huge, detailed environments, at scales ranging from kilometers to millimeters.

Using Lumen, artists and designers can create more dynamic scenes where indirect lighting adapts on the fly; for example, by changing the sun angle with the time of day, turning on a flashlight, or opening an exterior door. With
Lumen, artists no longer have to waste time authoring lightmap UVs or waiting for lightmaps to bake; they can
simply move a light inside the Unreal Editor and see the same lighting as when the game is run on the console.


Nanite can capture the right level of detail in Unreal Engine 5 imagery.
Nanite can capture the right level of detail in Unreal Engine 5 imagery.

UE5’s new virtualized micropolygon geometry system, Nanite, gives developers the ability to create games and experiences with massive amounts of geometric detail.

Nanite works by intelligently streaming and processing only the detail that you as a viewer can perceive and no more. Nanite largely removes burdensome polygon count and draw call constraints, and eliminates time-consuming and
tedious work such as baking details to normal maps or manually authoring LODs, freeing artists to concentrate on
creativity. Developers can now directly import film-quality source art comprised of millions of polygons—anything from ZBrush sculpts to photogrammetry scans—and place them millions of times, all while maintaining a real-time frame rate, and without any noticeable loss of fidelity.

Virtual Shadow Maps

Unreal Engine 5 is in early access.
Unreal Engine 5.

Conceptually, Virtual Shadow Maps are just very high-resolution shadow maps. To keep performance high at a reasonable memory cost, VSMs split the shadow map into tiles (or Pages). Pages are allocated and rendered only as needed to shade on-screen pixels based on an analysis of the depth buffer.

Virtual Shadow Maps are specifically designed to work well with highly detailed film-quality Nanite assets and large, dynamically lit open worlds, providing plausible soft shadows with reasonable, controllable performance costs.

Temporal Super Resolution

IO is a simulated person built with Epic Games' MetaHuman Creator.
IO is a simulated person built with Epic Games’ MetaHuman Creator.

Temporal Super Resolution provides built-in, platform-independent, high-quality upsampling within Unreal Engine without the need for proprietary plugins.

It works by producing a higher-resolution frame from a sequence of lower-resolution frames. This feature enables the engine to render at a much lower resolution—enabling frames to be presented to a player at the higher frame rates expected of next-generation consoles—but with similar output pixel fidelity to frames rendered at a higher resolution.

Enhanced path tracing

The user interface flow in Unreal Engine 5.

Introduced in Unreal Engine 4.27, the Path Tracer is a DXR-accelerated, physically accurate progressive rendering mode that requires no additional setup In Unreal Engine 5, the Path Tracer delivers improvements in stability, performance, and feature completeness.

That includes support for hair primitives, the eye shader model, improvements in sampling, BRDF models, light transport, supported geometries, and more. The Path Tracer enables developers to produce offline renderer-quality imagery right from Unreal Engine.

Better world building

This image wasn’t taken with a camera.

A new World Partition system replaces World Composition as the solution for distance-based streaming. With the new One File Per Actor system, the level editor saves individual actors to their own files, rather than grouping them all into a monolithic level file. This makes collaborative editing much easier by enabling users to check out only the Actors
they need from source control, rather than the entire level.

This greatly simplifies the large-world creation process by changing how levels are managed and streamed, automatically dividing the world into a grid and streaming the necessary cells.

This increased level of granularity means that different team members can work in the same region of the world at the same time, without stepping on each other’s toes.

Converting game publishers

Microsoft’s The Coalition showed off this image in Unreal Engine 5.

Within the game industry, Libreri believes the new engine will cause more big companies to migrate away from their own third-party game engines, built internally, to game engines from companies like Epic Games.

“Making a game engine is a lot of work,” he said. “Making a game is really hard. If you have to do both, that’s a lot of work.”

Developers will be able to modify the engine as they have source code access. And that can come back to benefit the larger game development community, Libreri said.

“We’re definitely seeing a big uptick in triple-A developers who would normally have their own engine starting to really take a serious look or adopt Unreal Engine,” he said. “We had the CD Projekt RED announcement [to use Unreal Engine 5]. We’re super excited to see where they take the engine and what we all can learn as an Unreal Engine community.”

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