Monday, August 9th 2021
Epic Games Store Keeps Losing Money, Expected Unprofitable Until 2027, Even with a Massive $500 Million Investment Behind It
Epic Games Store, one of the many products of the Epic Games company, is the current number one contender of Steam game store, which used to be Valve's monopoly in the gaming market. Having another contender is nice and competition is always welcome, however, it doesn't seem like running a games store is a cheap venture. In the recent legal dispute between Apple and Epic in California state, we have discovered some interesting details about Epic Games Store (EGS) and its financial background. According to the documents appearing in the court, EGS is not considered profitable until 2027, at least.
Apple has told the court that "Epic lost around $181 million on EGS in 2019. Epic is projected to lose around $273 million on EGS in 2020. Indeed, Epic committed $444 million in minimum guarantees for 2020 alone, while projecting, even with 'significant' growth, only $401 million in revenue for that year. Epic acknowledges that trend will continue in the immediate future: Epic projects to lose around $139 million in 2021." This information shows that Epic has sunk a lot of cash in the store, however, the company expects EGS to become profitable at some point, where the original investment will be returned.
Source:
via PC Gamer
Apple has told the court that "Epic lost around $181 million on EGS in 2019. Epic is projected to lose around $273 million on EGS in 2020. Indeed, Epic committed $444 million in minimum guarantees for 2020 alone, while projecting, even with 'significant' growth, only $401 million in revenue for that year. Epic acknowledges that trend will continue in the immediate future: Epic projects to lose around $139 million in 2021." This information shows that Epic has sunk a lot of cash in the store, however, the company expects EGS to become profitable at some point, where the original investment will be returned.
172 Comments on Epic Games Store Keeps Losing Money, Expected Unprofitable Until 2027, Even with a Massive $500 Million Investment Behind It
Who knew?
Expect it to become less generous over time if not stop altogether...
I have hundreds of games on steam, so i primarily only look on there for games.
I just think they would have become popular, while also profitable (or semi at least) if they just offered free obscure games (or really old) every month at least and discount coupons (which they already do).
Steam has best social/UI (I love Small Mode)
Origin is a resource hog and a shame on the industry
Epic Games gives me free games so I'm cool with that
GoG let's me snuggle at night in comfort in-case there is an apocalypse, as long as I have solar panels and DRM free I will still be ok. Thanks for the snuggles GoG.
Bethesda Launcher was initially required for Gwent card game, so I said **** Gwent card game and went back to
Magic the Gathering Arena launcher is ok, sure is a cash machine of a game though, makes Gaben look like he works for the Red Cross
Battle Net launcher is just a mess, news thrown in your face whether you want it or not, not friendly to end user at all, shame almost as bad as Origin, but only almost.
@lexluthermiester you in particular will like the GoG line
Why would you limit your power and influence as a consumer like that. Speak of shooting yourself in the foot. Installing a launcher is what, 10 seconds? (Well, if its not Uplay or Origin, which can take well over 10 minutes). You can run the games from their original icons like back in the old days. You can also combine all games into something else like Playnite or even Steam itself.
And then there's all the games that don't even pop up on Steam, or Epic. You're gonna be having more launchers anyway. Even per game was the norm not too long ago. Has that really changed? I think it has actually improved. Having it all on Steam is somehow a thing now, but prior to EGS, you never heard anyone about it. Contrary even, 'double DRM' made it more attractive to play Ubisoft games on Uplay, for example. Shit would often not even work proper.
Another important point in that regard is the curation and the quality of curation of games. Steam is a cesspool in that sense. EGS is moving there. But look at GoG, now there's a team that's doing proper curating. Not 'hey users, figure it out' Like Steam does for its curators and reviewers and developers and... everyone else... but 'Hey, these are Good old Games, we know them, you know them, we make them work'.
So realistically, all these outlets have different pros and cons. Why limit yourself (tunnel vision yourself) to that single one? Its like buying all your clothes at the same store. Boring, man. And also a bit lazy.
By the by, I'm NOT trying to say you're lazy or boring - (apparently this needs clarification in 2021) and I do get what you're saying. Its what we're used to. Most/all of us. And I'm advocating we get past that as we have changed our perspective on gaming and games before.
*EDIT: I also catch myself running to Steam before EGS again lately. And part of that is the fact EGS is still clunky as hell. Early days that could be overlooked, but now, come on... it really doesn't need to be so horrible. There are multiple issues with the UI, the pop up menus and more that are just illogical, slow, or unresponsive. I wanted to uninstall a game the other day, but had half a library in need of an update. The launcher feels its necessary to first, ONE BY ONE, start downloading the updates, and keeps my uninstall on hold until they're all done. Sweeney, what did you smoke? I was cancelling each update PER GAME to finally arrive at the very last one (the first on my library list, go figure) which had the uninstall command on it. WTAF.
1) What's so expensive about setting up an online store. Surely, it's mostly automated. You just need a developer or two to keep it current, new features and debugging and a bit of tech support to improve it and keep it running. Where's that requirement for all those millions from?
2) I can see the motivation to sue Apple over the App Store 30% fee, as they want to cover some of those losses by paying Apple less, even though they've entered into a legally binding agreement. I hope they lose this one badly.
It's easier to have as many games on steam as possible. I have friends on there i talk to daily. Personally i don't care about anyone elses opinions on Steam, i have never had a problem with it, and if you do, don't use it.
And look at how that worked for every other digital distributor in gaming. Origin is still crap and looks like it started in Windows XP days, half the time things don't even work proper. Uplay had its share of issues, up to and including just not being able to play. Steam has always been on Valve time with rollout of features, slow and steady. But slooooow. The list goes on... apparently its not easy.
2) Wasn't the motivation to sue Apple over in-app purchases, rather than the gatekeeper fee? And how or whether that is 'circumvented' entirely by making your app free and the purchases in-app? Oh so much this. Snuggle not sure, but comfortable it sure is to have content not locked behind an internet connection nor tied to some authenticator after purchase. Its the one thing that all other stores are missing tbh.
Also: both launchers you're mentioning are publisher specific, i.e. they have very limited storefronts. Neither are (or are claiming to be) Steam alternatives. EGS aims to be a broad-reaching store, on the model of Steam and GOG, with games from many developers. Origin and Ubisoft Connect don't compare.
As for you wanting the simplicity of looking at Steam first: that's obviously your right, but bringing this up in a thread like this can only be as an argument for EGS being useless/a bad alternative/not worth it (Steam isn't part of this topic at all, after all) - and in that sense, "Steam is easy to use, and I already have it" is a pretty weak argument overall. Presenting it as if it's not an argument, but just a common-sense non-argument is an underhanded and intellectually dishonest way of entering a debate. At least be forthright with the fact that you're arguing for something, and be honest with yourself about why. Your second post goes some way towards this, thankfully, but it's still not quite there. At least you're admitting that the only thing you care about is convenience. Though that argument is pretty weak - or at least rather lazy. I also use Steam and have plenty of games on there. I still look for games in this order: GOG -> EGS -> Steam, as I want Steam's de facto monopoly on PC games to end and want to spend my money elsewhere if I can. I really don't see this as a hassle, especially when GOG Galaxy catalogues all my games across launchers (and even on consoles!) for easy access. Nor do these launchers consume noticeable amounts of system resources. And doing a maximum of three searches vs. one? That's hardly a noticeable effort. Heck, this approach even allows for price comparisons and buying where the game is cheapest if you're interested in spending less.
Platforms are just middle men I can do without, but apparently need because reasons.
Then in 2004, along came Steam. "Online distribution" of games themselves (instead of patches) may have been "revolutionary" but the decision to start locking 3rd party (non Valve) games (then later on features that really should have been in-game) to the store that sold them was and still is massively anti-consumer regardless of how "convenient" some deem it. The equivalent of Walmart "being first" to sell DVD's but instead of just selling neutral discs & Sony / LG, etc, players, they instead specially made their own deliberately incompatible Walmart DVD player that required discs to be specially mastered just for it would have set up an artifically high barrier to entry for every following store, massively increased workload for studios having to remaster new versions per store, and made the market a huge mess for real competition. That's post 2004 PC gaming in a nutshell where even very pro-consumer stores like GOG are still suffering from store-front tribalism (aka "No Steam, No Buy" cult like attitudes) that were 100% started by Valve back in 2004.
People bitch & moan about needing more than 1 client and yet Epic's exclusives have actually reminded people that forcing the use of any client (and underlying DRM enforcement) negatively affects everyone and has done so all along since 2004. "Captive audiences" are only re-noticing it more now because a game is not on "their" store. Now we're also seeing some of that turn the modding community gradually toxic where formerly platform neutral free mods on Nexus, etc, are being "gated" being Steam Client paywalls, which very definitely isn't what the open modding community is or ever was about, but the same people up in arms over Epic's exclusives will shrug at Steam Workshop exclusive mods because it's "my store", not "their store", little different to the tribal bullsh*t we see on consoles. So whilst I don't like Epic's exclusives myself, my response to anyone pushing "Epic exclusives are so anti-consumer" simultaneously with "No Steam, No Buy. Steam Workshop exclusive mods are great" is "Cry me a river..."