Epic 2021 reportedly set to lose at least $330m in efforts to compete with .

Epic 2021 reportedly set to lose at least $330m in efforts to compete with .

Epic Epic efforts in to $330m least reportedly lose with compete set … to at

Mon, 12 Apr 2021 09:00:00 -0700

CEO Tim Sweeney considers it a “fantastic investment” into growing the business


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14 – 16 April 2021

Danielle Partis

News Editor

Monday 12th April 2021

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Epic Games

Epic Games may lose millions after struggling to recuperate costs from the Epic Games Store, following its fight to gain market share from Steam.

The Fortnite giant spent around $444 million in 2020 on making the storefront more lucrative to PC gamers, mainly through giving away titles for free and exclusivity deals.

The company dug deep to offer “minimum guarantees” to developers releasing games exclusive to the Epic Games Store.

Under this arrangement, titles must remain exclusive to the PC storefront for one year, even if they’re released on console platforms.

This means that the developer will receive a guaranteed advance from Epic whether or not their game sells enough to recoup the number.

As an example, the company spent over $10 million securing PC exclusivity for Remedy’s Control in 2019.

A report by IGN that shows players spent $700 million on the Epic Store in 2020, but only $265 million of that was spent on third-party games exclusive to it.

According to predictions made by Apple, the Epic Store will not see any profitability until 2027 if it continues to operate this way.

Apple also projects that the store could lose around $600 million by the end of the year.

While Apple claims that the figure is a loss, Epic CEO Tim Sweeney confirmed on Twitter that he considers it a “fantastic investment into growing the business.”

Although this doesn’t initially feel beneficial to the Epic Game Store alone, Epic itself generates enough revenue to absorb the loss, while enabling developers to release their games and see a sizable return immediately.

In December 2020, the store saw over 56 million MAUs, up from 32 million in 2019.

Epic is still in an ongoing antitrust duel with Apple – the trial is scheduled to take place on May 3, 2021.

14 – 16 April 2021

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Epic Epic

Mon, 12 Apr 2021 09:00:00 -0700

With Epic Games Store (EGS), the Fortnite-creator is undoubtedly targeting Steam's market dominance on PC


But the store has now been drawn into the legal 

With Epic Games Store (EGS), the Fortnite-creator is undoubtedly targeting Steam’s market dominance on PC.

But the store has now been drawn into the legal fight between Epic and Apple as well.

In court papers for an upcoming hearing, spotted by PC Gamer, Apple uses EGS as an example of how much time, money and effort go into to creating a successful online store, a fact that it’s using as part of its defence against Epic’s claim that Apple’s 30 per cent fees amount to a monopoly.

EGS charges just 12 per cent, undercutting both Steam and Apple significantly, and so becoming a weapon in Epic’s arguments that the industry-standard 30 per cent rate is outdated for such stores.

However, Apple argues that EGS’s recent huge losses undermine that argument.

To which end it has released at idy summary of figures.

Apple stated that:

EGS lost $181m in 2019
EGS is projected to lose $273m in 2020
EGS is projected to lose $139m in 2021

The large majority of those losses come from ‘minimum guarantees’ as part of exclusivity deals.

Effectively Epic promising that developers/publishers will earn out a guaranteed minimum from selling their game on EGS rather than Steam.

Epic committed $444m in minimum guarantees in 2020 according to Apple’s submission.

While some of those will have been met from actual sales, Apple says Epic has paid out $330m in ‘unrecouped costs’ to date.

It’s not surprising that Epic has pumped hundreds of millions of dollars into setting up EGS as a competitor to Steam over the past few years.

And it’s notable that a large amount of the money spent on doing so has come from Fortnite profits and gone to a wide variety of developers and publishers in the industry.

And such shifts in finances look set to continue.

With Apple claiming the store will not be profitable until 2027, although Epic has claimed that date to be 2023 in its own submission.

Epic CEO Tin Sweeney noted in a tweet in reply to news of the ‘losses’:

“That’s right! And it has proven to be a fantastic success in reaching gamers with great games and a fantastic investment into growing the business! … Apple spins this as “losing money”, but spending now in order to build a great, profitable business in the future is exactly what investment is! It’s equally true whether you’re building a factory, a store, or a game.”

Is any of this really relevant to the bigger picture of whether Epic will succeed in breaching Apple’s walled garden of in-app purchases? Most probably not, that battle is set to run and run, with some kind of compromise being the most likely outcome.

It’s fair to say that there’s nothing new in CCP trying to make a successful …


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– April 12, 2021