Epic Games Store Has Lost Over $450 Million for Epic - News
by William D'Angelo , posted on 01 May 2021 / 2,160 Views
The Epic Games Store launched in December of 2018 and Epic Games has been trying as hard as it can to compete with Steam. The store has grown to over 160 million registered users at the end of 2020 with about 56 million monthly active users.
A recent court filing spotted by ResetEra reveals that Epic Games has yet to turn a profit with the Epic Games Store. Since its launch, the store has lost Epic Games over $450 million. This includes $181 million in 2019 and $273 million in 2020, and a projected loss in 2021 already at $139 million.
The reason the Epic Games Store has yet to turn a profit is that Epic is spending a lot of money to grow its marketshare. The 12 percent revenue cut is enough to cover the operating costs. This compares to most digital storefronts who take a 30 percent cut.
Epic expects the Epic Games Store to become profitable in 2023 and its cumulative gross profit isn't expected until 2027.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel dedicated to gaming Let's Plays and tutorials. You can contact the author at wdangelo@vgchartz.com or on Twitter @TrunksWD.
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The 12 percent revenue cut is --> NOT <-- enough to cover the operating costs :-)
I refer to similar articles on other websites ^^
Spending too much money buying exclusive rights doesnt help either.
Epic!
Good, fuck Epic
I like to think I played my part in that 450 million
LOL :-)
Businesses always starts with loss and takes time before they gain profit but don't tell me that 450 mil ain't hurtin em
I hear Epic, I think about faith no more.
I'm not sure what world they live in that buying up temporary exclusive rights, which only aggravates the community, is the right way to make them comparable to Steam.
I imagine that has to be from giving away games and buying times exclusives.
I feel a better investment would have been creating exclusives even if they were developed by other studios. Kinda like Steam and Microsoft does.
If the goal was just get more users, I guess their strategy was fine.
I feel they may have gotten good results by giving away some NEW games free. Maybe not AAA stuff, but B-tier and indie-ish games. If MS and Sony can get new 3rd party games day one on PS+ and Gamepass, then I assume Epic could have done it for their store.
Buying timed exclusives in comparison just pisses people off many likely just waited for Steam releases.
They are being aggressive to try and gain marketshare, it isnt something bad really, but that is a lot of money. Lets see if they can keep growing.
funky text
when I use 2 1 it makes this for everything in between.
"gotta spend money to make money" Timmy
Or you could just invest wisely, instead of splurging money, tossing it into a bottomless pit and expecting to come out as supreme king of the market (what he expects to be by 2027).
That being said, they are so lucky they have someone like Tencent aiding them in their spending endeavours, because anyone else without a partner like that would fail hard.
I've only ever used EGS to claim the free games and the 1 week I played Fornite with my friends then we all quickly dropped it lol. Steam is so dominant still because of the fleshed out ecosystem. It's not just buying games. There's forums, Steam workshop, groups, inventory system support, etc, and EGS is nowhere near that fleshed out. Sure, you can make the argument that Steam was barebones at launch, but there was no competition at that time! EGS should've launched at the same level, if not greater, than what Steam is now. Not what it was in 2004.
Yet none of the peope who post these standard slurs on Epic ever actually discuss their ongoing development schedule or just the most recent additions etc. They aren't serious people, they are just regurgitating what is on the top of their consumer monkey mind. And many of the features of Steam aren't really any good, e.g. it's forum is shit compared to higher quality discourse at dedicated forum. They also ignore basic structural elements like taking half the cut of developer's revenue that Steam does. Because it's not consumer facing, all these people ignore how bad that is to developer ecosystem, and it's not just some inevitable march of tech, it's Steam gorging on monopoly superprofits.
Anyways, I agree it's more sustainable and constructive for Epic to be funding own or 2nd party exclusives rather than post facto buying exclusivity (since their low fee for developers isn't enough with Steam's price parity clauses that prevent competing on consumer price). But if they wanted to grow their platform, what they did is probably the most realistic way to do so in short term, since new game development takes years and not all the projects can be guaranteed to be worth launching (they also don't want to sully their brand with games that end up shitty, they want to bring solid quality... which is other area where Steam is very questionable with their zero curation attitude).
Anyways, since this console centric site, the Sony angle is interesting here. Because they don't have to buy Sony's PC exclusivity, Sony could get equity instead. In fact, they can offer the same deal to every developer: equity in the Epic while also getting the best cut available to begin with. I think their low cut also motivates them to actually achieve low costs, while Steam doesn't really need to. That's why the "they suck because they don't just copy Steam features" is short sighted because it ignores that Steam may not most efficient processes, so it would be waste of resources to set up processes that would prevent achieving lower operating costs. Or to put it frankly, there probably is a reason multibillion corporations and investors are throwing them billions for this project. Not even trying to ascertain the logic behind just looks childish. /YMMV
Of course customers dont care. As long as the selling price of the SW is low and the discounts is high they dont care if the devs is starving. Same as a lot of people that make pretty discourses on internet about people`s right and stuff, condemn practices from companies but will buy from those if they have the lower price.
Okay Mr. Positive. :-)
I like the steam forum. It gets the job done and is great just to get basic TSing help for games. Also Steam doesn't take 50% they take 30% which is the same as the Sony store and MS store.
I don't see it paying off long-term, in that they think by 2027, they will become "the" top dog on the market.
What I do see happening though, is the years of trying to coddle the younger gen that's into FN, into being their primary consumer base (even if it's been done via petty attempts and brainwashing).
Essay Pro