What Epic Games’ State of Unreal 2023 means for the Metaverse


Epic Games held their ‘State of Unreal’ keynote at GDC 2023 last week, with Sweeney and team dropping some huge announcements around the evolution of Unreal Engine and its impact on the future of digital creator economies.

7 min read

Having welcomed Epic into our pool of investors late last year, and built many of our projects in UE, including our record-breaking 14k players in a single multiplayer instance, we took a keen interest in the announcements on the future of the engine and what this means for Hadean’s vision of a scalable, interoperable, and secure metaverse.

Unreal Engine is making virtual worlds better

The keynote kicked off with demonstrations of the fidelity and performance achievable in Unreal Engine 5.2. This included new features for streamlining the workload of more beautiful, immersive, and expansive virtual worlds, full of stunning visual details and deeply interactive physics. The demos were a clear showcase of Unreal’s power as a development tool which, coupled with the leaps that it is taking in usability, gets us closer to the vibrant virtual experiences that we expect to get out of a metaverse that meets its full potential, rather than looking like an amateurish development project or proof of concept.

Also showcased was MetaHuman Animator. The new update makes it possible to control facial animations for photo-realistic virtual avatars in real-time using just a single iPhone pointed at an actor’s face. This is a fantastic boost to the ability for creators to interface with virtual worlds and humanise the interactions that are possible therein. Higher-fidelity avatars not only make virtual experiences more life-like, but also provide a better platform for users to express themselves authentically, a huge boon for engagement and empathy within metaverse experiences as they look to empower more meaningful virtual communities.

UEFN – bringing Fortnite closer to metaverse readiness

Powered by Unreal Engine, Fortnite is the spearhead of Epic’s efforts to bring metaverse experiences into the mainstream. Since its release in 2017, Fortnite has transformed itself from a delimited multiplayer gaming experience into a multifaceted platform for social entertainment. In the meantime, it has also broken new ground in its ability to dynamically integrate brand collaborations and media crossovers to populate itself with characters, brands, and personalities that users already know and love. This continual growth in scope has helped it become one the most played and lucrative games of this generation.

Since 2018, Fortnite Creative has allowed users to create custom worlds and activities using in-game design tools. These make it easy for users to create and share content within Fortnite’s ecosystem, but their simplified natures means they are inherently limited in terms of scope and personalisation. At last week’s keynote, Epic unveiled the most significant update to Fortnite since its release, ‘Unreal Editor for Fortnite’ (UEFN). UEFN lets users harness the deep functionality of Unreal Engine directly within Fortnite Creative, allowing them to co-create, test, and publish fully bespoke experiences with granular levels of customisation and flexibility.

The integration of Unreal Engine into Fornite’s out-of-the-box creative suite will radically increase the diversity and depth of experience available to Fortnite’s already thriving user base, taking it further into the direction of a metaverse-style sandbox that is brought to life by a fluid, user-driven creator economy.

UEFN also notably marks the release of ‘Fab’, a unified marketplace of virtual assets that makes it easier for designers to find the content that they need to fulfil their creative vision, as well as Epic’s new ‘Verse’ programming language, specifically made to programme dynamic and interactive virtual experiences in the metaverse.

Finally, the big unveiling of UEFN heralds the launch of Epic’s ‘Creator economy 2.0’ initiative, whereby it will share 40% of its revenue with creators of custom content on the Epic Games ecosystem.  This is a clear indication of how important the open creator economy has become to Epic, and to digital entertainment ecosystems generally.

Epic’s push for the metaverse

These announcements are a real power move for Epic Games, positioning Fortnite as a central hub for bespoke gaming and entertainment experiences within the broader metaverse ecosystem.

During the keynote, CEO Tim Sweeney stated that Epic sees the metaverse as “the next big change in gaming and in Epic’s evolution as a company”. It is also taking the rare step of confronting anxieties around ‘walled gardens’ head on, outright rejecting the notion that Fortnite, like other Web2.0 platforms of its size, might try to lock users in by preventing interoperability with other platforms at all costs.

Sweeney instead vowed that Epic is committed to the principles of an open metaverse, working towards common standards for sharing virtual content to a broad user base for metaverse experiences, which he projects to hit 1bn within the next decade, across a variety of platforms. The open metaverse should, he states, be a network that companies can connect to as equals, regardless of the tools they choose to use.

In a consumer tech market often hindered by the zero-sum mentality of its biggest players, it’s encouraging to see Epic giving equal weighting to both Fortnite, its own platform for attracting users to metaverse experiences, and Unreal Engine, with which companies can build and host their own experiences while retaining full ownership and creative control.  

Furthermore, with the integration of Fornite into the broader Unreal Engine ecosystem through UEFN, Epic is not only strengthening the creator economy of Fortnite, it is also increasing the reach of any virtual assets that are interoperable with it, even if created independently. With the development of open standards for virtual content, this interoperability will inevitably start to comprise not only assets created in Unreal Engine, but also those created on other engines, independently of Epic as a whole.

As younger generations increasingly intermix virtual identities, assets and achievements with their everyday patterns of entertainment, learning, and socialisation, it is in everyone’s interests, brands, publishers, developers included, to create ever greater, more accessible, and more confluent creator economies in the metaverse within and around which younger generations can express themselves. 

The release of UEFN will doubtless attract many brands and creators to converge around Fortnite as a no-brainer for reaching these metaverse-native audiences in the short term. In doing so, however, Fortnite will act as a gateway into the broader spectrum of creative ecosystems for the Consumer Metaverse, whereby they will be empowered to host their own virtual experiences, and mould them into bespoke and far-reaching metaverse strategies that intertwine ever more meaningfully with their business. This is an acceleration of the metaverse-native era which is changing the face of consumer entertainment, retail, sports, education, and more, and which Hadean is excited to empower.

Hadean’s outlook

It is thrilling that steps are being made towards the proliferation of high quality metaverse experiences, brought to life by a flourishing creator economy. As a company that is passionate about powering the metaverse, we look forward to continuing to unlock the technical potential of Unreal Engine, and making use of Epic’s creative ecosystem to enable our customers to bring their vision to the metaverse. This will allow them to build with tools they already know, using content they already have, to inspire new audiences.

As part of this, we’re also actively working towards enabling interoperability between worlds, including those of Fortnite, Unreal Engine, and beyond, and integrating them into coherent, persistent, and meaningful user experiences. This will enable our customers to delight their metaverse-native fanbases with projects and products that go well beyond any particular virtual experience or platform, instead creating metaverse strategies that reach across various channels and business functions, and out into locations and activities in the physical world.

Finally, we salute Epic’s willingness to stress the rights for companies using UE to maintain control of their own data and IP, amidst ongoing uncertainty around property rights in a virtual context.  

Safe to say that with this year’s State of Unreal, the metaverse has taken a great step forward.

For more insights on getting the most out of your Metaverse strategy, check out our Academy.