Epic Games has admitted that its digital store remains unprofitable after launching five years ago.
If The edge reports that Epic Games Store boss Steve Allison during the first day of the Epic vs. Google lawsuit on November 6 on the witness stand said the digital PC store is not profitable despite its debut in December 2018, but said the company’s “goal” is still “growth”.
It was reported From emails sent during the Epic vs. Apple trial were revealed in 2021, it emerged that the company hoped to claim half of all PC gaming revenue. Epic CEO Tim Sweeney even tweeted at the time, losing over $300 million on the store was a “fantastic success in reaching gamers with great games and a fantastic investment in growing the company!”
During the same trial, the company also said that the Epic Games Store would start turning a profit in 2023, which we now know didn’t happen.
Epic Games is spending millions to give away free games every week – which is intended as a fairer profit split between the developers and the publisher – and an ongoing campaign that doesn’t seem to be slowing down anytime soon, even though Fortnite the company does not pay for each copy given away.
The Epic vs. Google case comes after Epic sued Google in 2020 following a fight over in-app purchase fees when it claimed the Google Play Store constituted an unlawful monopoly.
Epic’s plan to overspend to turn a profit has also affected its workforce, as it recently laid off about 830 employees – 16% of its workforce – with Sweeney saying it “concluded that layoffs are the only way.”
“We have been spending far more money than we make for some time, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators,” Sweeney wrote in a statement. “I was optimistic for a long time that we would be able to get through this transition without layoffs, but in retrospect I see that this was unrealistic.
“While Fortnite is starting to grow again, growth is primarily driven by content from creators with significant revenue sharing, and this is a lower margin business than it was then Fortnite Battle Royale took off and started financing our expansion.
“Success with the creator ecosystem is a great achievement, but it represents a major structural change in our economy.”
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