Microsoft exploring use of Unreal Engine 5 across multiple Xbox studios

In a recent interview on the Major Nelson Podcast, Xbox Game Studios head Matt Booty spoke briefly about State of Decay 3 and revealed that the game runs on Unreal Engine 5. He also talked about something quite interesting on the development side of Xbox Games Studios. Multiple studios under Xbox’s umbrella are experimenting with Unreal Engine 5, and they have been holding internal summits to share ideas and train people on how to best use the engine.

Precious little was gone over, but what was said was intriguing. Firstly, Booty went over a practice Xbox Game Studios has for sharing and training on tech.

“We have a structure in place, we just call them summits, where we get subject matter experts together for one or two days,” he said “We’ve had animation summits, UI summits, Unreal Engine summits, physics summits, etc. I think we did in the last year close to 25 of these. That’s our main mechanism for teams to share technology back and forth.”

What’s interesting to note about using Unreal Engine 5 is that Xbox Game Studios has access to several in-house engines. These include Slipspace for Halo Infinite, id Tech 7 for Doom Eternal, and Creation Engine 2 for most Bethesda titles, just to name a few engines.

Once the acquisition of Activision-Blizzard goes through, Xbox will have access to even more engines. The choice to outsource to the industry standard Unreal 5 is important and curious.

Most large publishers tend towards developing custom in-house engines that can then be dispersed to the smaller studios within the corporate structure. Ubisoft has Snowdrop, Sony has Decima, EA has Frostbite, etc.

Ubisoft’s developing Avatar: Frontiers of Pandora on its new iteration of Snowdrop.

Why not use Unreal Engine 5?

Unreal Engine 5 has dominated the news cycles for a while now due to the many new features and optimizations it offers for creating next-gen game experiences. There’s certainly plenty of interest from game developers in using it. There are also already tons of fan-made projects that show how easy it is to make gorgeous scenes using UE5 toolsets.

The reason most larger publishers with multiple studios choose to create custom engines is threefold. Firstly, there’s standardization. Requiring all internal studios to use the same tools puts everyone on the same page on a technical level. Monetization is another key factor, because engines like Unreal and Unity require licensing fees to use, whereas in-house engines obviously do not.

Customization is the last major deciding factor. While you can modify and create plugins for Unreal 5 or Unity, fundamentally, you are only able to change so much due to the engine being owned by another company. If you own the engine you are working on, you can tailor it to your needs without unexpected technical hurdles or legal limitations.

State of Decay 3 certainly looks visually impressive on Unreal Engine 5. (Image credit: Xbox Game Studios).

Flash forward to Microsoft’s acquisition of Bethesda, Activision, and other studios and you can understand why it seems curious that Xbox Games Studios is experimenting with Unreal Engine 5. Given all of the resources it has available, it seems convoluted to keep using so many engines across so many different studios over the long term.

It appears Xbox Game Studios has more than a few technical considerations to make in its post-acquisition phase. Whether we’ll see more Xbox games aside from State of Decay 3 based on Unreal Engine 5 remains to be seen.