Everything you need to know from State of Unreal 2026: Unreal Engine 6, Unreal Engine 5.8, and $1bn paid to UEFN devs

Today’s State of Unreal keynote at Unreal Fest Chicago formally unveiled Unreal Engine 6 and confirmed Unreal Engine 5.8 is now available.

Here are the highlights of the show you need to know about:

Unreal Engine 6

Epic said the next generation of its game development engine will take the AAA game development capabilities from UE5 and “expand them with a next-generation game development pipeline” it has been building live within Fortnite.

The company said it aims to enable developers to create games of “any scale and scope once and deploy to traditional platforms, Fortnite, or their own live and potentially multi-product ecosystems.”

UE6 will be built with three major initiatives:

• Moving the gameplay programming model to Verse, which transactionalizes C++, for increased accessibility of development and so that it can build persistent, large-scale, live experiences with thousands of contributors.
• Enabling content, code, and economies to become portable and interoperable across games, ecosystems, and engines through open standards, to enable developer collaboration on much greater scales than ever before.
• Building development pipeline features – such as a Model Context Protocol (MCP) with integrations for Claude, Gemini, and others – as creativity and productivity multipliers so that teams can focus their efforts on the essential creative and technical tasks of development rather than on time-consuming manual tasks.

Epic says it’s targeting an early access release by the end of 2027.

Unreal Engine 5.8

Many features are now Production Ready in UE 5.8, including MegaLights, Audio Insights, Dataflow for Chaos Cloth, Live Link Hub, Iris, and Movie Render Graph. Mesh Terrain, a brand-new experimental system for authoring “complex 3D landscapes in any kind of environment without the limitations of heightfields,” is also available.

Shader compilation has been optimized, along with improved deduplication, which Epic said “helped cut Fortnite’s shader count by 68%.”

“Lumen now features lightweight dynamic global illumination to support 60 fps on Nintendo Switch 2 and PCs,” the company said. “And we’ve continued to expand worldbuilding capabilities and make character and animation workflows more interactive and intuitive.”

Unreal Engine 5.8 also introduces a new Experimental Model Context Protocol (MCP) plugin, which enables developers to “connect models like Claude directly to UE projects.”

“Rather than acting as assistants that simply copy and paste, these models can become active collaborators that understand and operate within specific Unreal Engine workflows,” the company explained. “The interface is open, and so is the choice of model: build with Claude, Gemini, or whichever models best fit your needs.”

New media and entertainment workflows now give artists “far greater creative control” over image and video generation than traditional text-prompt tools.

“Bringing diffusion models into Unreal Engine opens up the ability to use depth passes, normal maps, and camera data from 3D scenes as conditioning inputs alongside text prompts,” Epic wrote. “The results are styled frames that respect camera framing and scene layout, extract and mesh segmented objects into reusable 3D assets, and render full video sequences with model-guided diffusion – all from within the engine.”

Unreal Engine 5.8 is the “last planned major release” for Unreal Engine, although Epic stresses that it’s “reserving the option to release a 5.9, if needed.”

Lore: Next-generation version control for all

From today, a new open source next-generation version control system, Lore, is available and free to use.

Unlike other version control solutions that “optimize for source code or binary assets,” Epic claims Lore delivers “high performance, reliability, and practical collaborative workflows for both, empowering developers and artists to work seamlessly together.”

“Built for unprecedented scalability, Lore is designed to handle massive datasets, distributed repositories, and teams of any size,” it added. “It is particularly well-suited for projects that combine code with large binary assets for game development, media production, and other content-rich work.”

Over $1 billion paid out to Fortnite developers

Since the launch of Unreal Editor for Fortnite (UEFN), Epic Games has paid out over $1 billion, and iteration times have been cut by an average of 40%.

Epic Games said this work continues to lay the framework of UEFN’s “convergence” with UE6, and referenced Scene Graph, which it said is “giving developers more control,” with core engine systems like animation, itemization, and gameplay abilities as Verse-scriptable components.

“With Fortnite back on Google Play and the App Store worldwide, and new UI and input controls, mobile playtime in developer-made games has more than doubled in the past year,” the firm added.

“The recent changes to Discover have resulted in newly published islands reaching 100 players and 10,000 impressions at nearly double the previous rate. We’ve also reduced spam and duplicative content, organized islands into clear genres, and personalized every aspect of the surface. Later this year, we’re going further with a full Discover redesign: video throughout, deeper personalization across every row, social signals such as like percentage on tiles, and Discover replacing the lobby as the first thing players see when they open Fortnite.”

Epic also confirmed that, following on from the Star Wars games that came to Fortnite in May, clocking up nearly eight million players on the custom Star Wars islands in just 72 hours, UEFN will shortly host The Simpsons, with the official toolkit available to Fortnite developers through the IP program, “complete with iconic characters and locations from Springfield.”

Updates coming to the Epic Games Store

The Epic Games Store now features more than 6000 games from over 3000 partners, with player spend on third-party PC games up 57% in 2025 and hitting an all-time record of $400 million.

The company will continue to improve discovery, build deeper community features, and iterate for better performance, for “a platform that partners can confidently build on for years to come.”

“We’re undertaking a complete rebuild of the Launcher and storefront backend, enabling the store to ship new player-facing features faster and more frequently,” Epic added. “We’re also connecting the Epic Games Store more closely with the Fortnite ecosystem. Now when players purchase specific partner content on the Epic Games Store, they are granted cosmetics from that game’s IP to use in Fortnite. Look out for over 30 collaborations planned for 2026, continuing into 2027.”