Built Different: How Games Are Reinventing Creation

User-generated content is the lifeblood of gaming, woven into its DNA from Doom mods to Roblox empires. Unlike broader UGC (think TikTok or YouTube), gaming’s flavor keeps players hooked, building, and spending—driving retention rates that linear media can only dream of. This analysis zeroes in on UGC in games: full engines like Unity, scripting hubs like Fortnite, modding ecosystems, and in-game editors. UGC isn’t a feature—it’s the future of gaming’s growth engine.

1. Full Game Engines (Unity, Unreal Engine)

What It Is:

These engines empower game creator to build entire games or interactive experiences from the ground up. Unity and Unreal Engine are the market leaders (+ godot Open source), giving near endless customization; and  toolsets and extensive documentation. Creators who use these engines are effectively independent game developers—distributing via Steam, Epic Games Store, Itch.io, and other platforms, but are able to rely on existing codebases, tools, and assets specific to their respective game engines. Comparatively, this is much easier than building a game engine from scratch.

Pros

• **High Creative Freedom: “**Virtually” no limits on genre, style, or mechanics.
• Ownership & Distribution Control: Creators can self-publish on multiple storefronts.
• Potentially Large Upside: If a game takes off, the platform fee capture is significantly lower than e2e creation/distribution platforms
• Controlling Scale: Developers can decide how simple or complex a game’s scope is, only limited by the performance of an engine.

Cons

• Steep Learning Curve: Requires programming knowledge (or game logic with visual scripting), 3D pipelines, multiplayer networking, and much more intricacies to make a “complete” experience. This typically increases development time & overhead cost.
• Competitive Market: Standing out among thousands of releases can be challenging - with 100K+ on Steam alone. Teams take on the burden of distribution (unless working with a publisher).
• Full Responsibility: Developers bear the cost and effort of QA, server maintenance (if online), and community management

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2. Custom Scripting + Distribution (Roblox, Unreal Editor for Fortnite, Horizon Worlds)

What It Is:

These are platforms that offer built-in scripting environments (e.g., Lua in Roblox, Verse in UEFN) and a massive existing user base. Creators can build and distribute their experiences directly through the platform, which handles critical infrastructure like servers and payment systems, while also serving as a distribution channel via the base platform’s user base.

This is the category of UGC that has captured most of the zeitgeist (and investment dollars) in recent years. Platforms such as Roblox,  Unreal Engine Fortnite (UEFN), Meta Horizon Worlds and S&Box (eventually) are in this category.

Pros

• Instant Community & Distribution: These platforms often have millions of active users, giving creators a ready-made audience.
• Lower Technical Barriers (Relative to Engines): While scripting is still required, the engine fundamentals—physics, rendering—are managed by the platform, in addition to multiplayer networking and hosting
• Monetization Pathways: Many platforms split revenue from virtual sales with creators, offering in-house digital currencies and marketplaces, and payout based on experience usage (similar to Youtube)

In 2024, Epic Games paid out $324 Million to creators across 198,000 “islands” (Epic’s term for games built in Fortnite), with 70,000 creators.

Of the 70,000 creators, ~20,000 of them generated at least $100 in revenue, 630 of which generated over $100,000.

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Cons

• Platform Dependence: A single policy change can upend a creator’s revenue model or design freedom - this can be changes in discovery, ToS, or creator payouts.
• Revenue Split: Creators typically share a significant portion of earnings with their respective platforms - Roblox for instance pays out approximately 29% of revenue generated to creators.

• Creative Constraints: Each platform has its own technical limitations, content guidelines, and brand standards. In the case of UEFN, the most popular islands are predominantly derivative of Battle Royale, rather than original ideas due to the core userbase comprising of Fortnite players.

Additionally, games built inside UGC engines can’t be exported to other markets.

• Pareto Distribution: Revenue and usage is highly aggregated to top experiences and creators.

Roblox’s traction and Fortnite’s pivot toward UGC shows the viability of creator platforms. They introduce powerful network effects—more creators produce more content, drawing in more players, which in turn entices more creators.

3. Modding Ecosystems

What It Is:

Modding is the original UGC in games by means of building on top of an existing game—expanding or altering it with new assets, levels, or game mechanics.

This can be as simple as swapping textures on character models to creating a whole new game from an existing title, such as Counter-Strike (originating as a Half-Life mod) to Dota (born from Warcraft III).

Modding is an essential spoke in the hub of games - giving people the ability to customize games to whatever specific desire. For most titles, supporting modding out of the box is EV+, as players can essentially add live service to old titles.

Mods are still incredible active as well - through hosting platforms like Nexus.io and distribution platforms like Mod.io & Overwolf are driving millions of mod downloads monthly.

Pros

• Passionate Communities: Players who mod are typically deeply invested, generating free marketing and community content.
• Innovation Incubator: Modders often experiment with mechanics and features that can later evolve into major releases or official expansions.

Cons

• Limited Monetization: Many modders operate on a purely voluntary or donation-based model, though some publishers are starting to offer official marketplaces. Historically, players have been recalcitrant to the prospect, such as the case when Bethesda introduced paid mods for Skyrim on Steam in 2015.

• Dependent on Base Game Updates: Changes or patches to the original game can break mods overnight.
• Installation can be difficult, but companies like Mod.io and Steam’s workshop have made it incredible simple for end users to access.

Industry Context:

High-Revenue Modded Servers

Beyond traditional mod files, entire custom servers have been created on top games, turning modded games into morph into self-sustaining ecosystems:

• FiveM (GTA V): Originally a third-party modification enabling custom multiplayer servers, FiveM has turned into massive role-playing and freeroam communities built atop GTA 5. Server owners often monetize through tiered memberships, in-game purchases, and donations—underscoring how a well-structured mod ecosystem can generate substantial recurring revenue, even if it sits in a legal gray area.
• Hypixel (Minecraft): What began as a series of custom adventure maps is now one of the largest Minecraft server networks worldwide. Hypixel runs proprietary mini-games, custom currencies, and cosmetic upgrades, creating a robust monetization model. Its success led to the formation of Hypixel Studios, which later secured investment and was ultimately acquired by Riot Games.

4. In-Game UGC (No-Code Editors)

What It Is:

In-game UGC refers to tools built directly into a game—often no-code level editors or cosmetic creators. Titles like Super Mario Maker, Digigods, Minecraft, and Dreams on Playstation give players a fast and fun way to design their own stages, structures, or mini-games without deep technical skills.

Pros

• Ease of Use: Low barrier to entry means nearly anyone can create and share content.
• User Engagement: Player-made levels or worlds often go viral, increasing retention and social interaction.
• Immediate Feedback Loop: Creators can test and iterate quickly, purely within the game’s environment.

Cons

• Limited Monetization: Typically, there’s no direct avenue for players to profit from these creations.
• Strict Boundaries: The creation tools are only as robust as the developers make them, limiting advanced creativity or scripting. Most editing and creation is done in game
• Tied to One Title: Content can’t be ported outside the host game, keeping the ecosystem relatively closed and no IP ownership.

While less lucrative for individual creators, in-game UGC can be a goldmine for game developers—extending a game’s lifecycle and retention.

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Full engines offer unmatched flexibility but demand heavy lifting; scripting platforms like Roblox ride network effects with platform risk; modding ecosystems spark innovation at low cost, while in-game UGC drives retention with limited upside. The winners? Platforms that balance creator empowerment with defensible economics—and the teams that can execute. Capital will flow where traction and margins align.