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
Epic is building a new customer base on the younger generation, not trying to convert existing Steam users.
One user of my mod user loved it so much, that he asked me to friend him on steam. But i refused because i didn't even used Steam at all. He asked then how was i playing the game and i told him i was pirating the game complete with modding tools. So he decided to gift me the game on Steam + all DLC's and i think a few weeks later there was a sale and gifted me like 3-4 more games that were on my wishlist. So yeah i started using Steam and fell in love with it. The games are so cheap and i got some very generous friends. Some of them gift between 100-200 USD a year, usually in the sales.
Games on Steam are so insanely cheap, sometimes between 2-7 USD that it even made piracy just irrelevant. All the people i know that also used to be pirates that are now legit owners of games on Steam. Heck i even got like 200 titles of 80s-90s retro games on GOG and around 40 on Origin too, since you could transfer your EA games on Steam into Origin by using the Steam Key and even contacting Support and showing them the Email for the EA Game bought on Steam, and they would activate it if it had no key on steam. So i got no love for EGS or UPlay, they haven't done anything anywhere near of what Steam have done for me. All these launchers are starting to annoy me. Steam is just better in every aspect, they might not be as generous as other stores giving out free games, but what they do they do it pretty damn well. You can leave reviews for games, Recommend, comment on each specific game, MASSIVE community with support for every single game out there, cards that you can unlock and then sell to buy more games, nice wrappers that make games playable on systems like Mac and Linux, Native Controller support for every damn console out there and the list just goes on and on.
What does epic got? basically just a store that sometimes gives out somewhat good games. They don't even have a community to look for support on their own platform... i seen threads on Steam of games only available on Epic... yeah. What a wonderful store that is. I haven't checked in months, but I'm not sure they even got a Cart to buy several games at once or even a damn wishlist. Their store is just barebones. I wouldn't mind their store if the games were available in all stores, but sometimes they pay for exclusivity that last YEARS. If it were like a 3-6months it wouldn't be a problem for me, I can wait a few months.
I honestly don't care much for EGS. They can grow or just disappear. Steam and GOG are my main places for games, the rest are just useless bloatware launchers cluttering my Desktop.
I remember when Epic, EA and others hated PC and were openly against it. Praising and simping for Consoles. Steam brought PC back from the grave, and once it turned out to be very profitable all then they want a piece of the pie. Though luck, even after several years of EGS, Steam still owns 90% of the market. Their fault for not supporting what has been my preferred platform since the 90s when i got my first Pentium1 at 133mhz. Now they all get to eat crumbs and dirt.
I suggest everyone to grab as many free games from then as you can lol. I grabbed GTA5, Jurassic World Evolution and Ghostbusters Remaster from them, since i also own those on Steam. But to be honest i don't even launch the damn thing.
But the de facto monopoly situation doesn't make smartphones any less general computation devices than Steam makes PCs into games consoles. I sincerely hope the Epic v. Apple judge will see reason and deny Apple the right to enact wholesale monopolist control over the devices they make - but I agree that this is far from a done deal, and there's sufficient leeway in the law (not that odd given how decades of unchecked corporate lobbying has undermined most ideas of "fairness" in the law) for it to go either way. But even in a predatory capitalist system it's difficult to accept someone's right to be a monopoly, and especially their right for that monopoly to cascade outwards from an initial controlled venue (the app store out to in-app purchases). Which is why I'm somewhat hopeful. As if they have any data on you that Google, Facebook, or any other major tech company doesn't already have? Besides, early on in the "EGS is tracking you" panic, I asked for a summary of data they have gathered on me, as they are required to provide under EU law. The result? Nothing of value. Profile info + purchase history, and that was that. There's likely more now that I've used EGS for longer, but ... what would it be? Which games I've played and for how long? They're not monitoring your internet connection or other apps, so that's about it for what they could get. I let them run, mainly because needing to log into them when they haven't run for a while is rather annoying. Currently I have EGS, Steam, Origin, GOG and the Xbox app in the system tray. Then again, I have 32GB of RAM, so it hardly matters.
More crap and bloat filling up my ssd.
another thing about epic is the large updates.
I do like the existance of Steam competition though.
Ironically I hated Steam when it first came out because I wanted to retain control over my games, but now I just want them all in one easy to manage library. If Epic wanted to compete with Steam they should come out with a better product instead of paying for exclusives and giving away games... that's not the way to build, all they are doing is trying to disrupt rather than innovate.
Just to realize how inadequate that 30% cut is: it's how much Cupertino Pigs, also known as Apple, take. Because majority of gamers give a flying carpet for software stores, so one could reasonably compete by rolling out "better software shop". Sure, John.
That would make sense if the games were actually cheaper, but Games in EGS are still as expensive as on Steam or Origin. You might add that more of that cash will go toward developers, but we all know it's BS. Since most of that will actually go to the CEO, President or top execs.
In the 80's and 90's publishers in Music, Books or Games took anywhere from 50-75% of the sale. Steam actually lowered it to 30%, hence why everyone wanted to be on board with them. Now all of a sudden the 30% cut is EVIL. For all the stuff steam does as a platform i say it's fair.
David Brevik, the Creator of Diablo and former Blizzard exec once said in one of his Streams for his latest Indie game called "They lurk below", that he has no problem with Steam or Xbox cut of 30%. But he wished that they would do a little more exposure to smaller indie Games. So if an indie dev like him think's the 30% cut is fine, It probably is. Epic is just being greedy.
Better yet, let's stop using Windows 10 and begin using Linux just to make point. Don't worry about using the operating system that supports you the most and provides the most content.
The goal is no longer to use the platform that offers the best experience, but to use the anti-platform to stick it to the big guy.
Funny how people go out of their way to find "alternatives", opting to use the platform that is basically still in beta. As far as software distribution platform rankings go, I would provide the following: Steam > Battle.net > Orgin > Epic.
Maybe by 2027 this will change.
Epic is losing a lot of money with the free games and the guaranteed payout to Publishers who are willing to make their games a timed exclusive on EGS and the lower than industry standard cut. These things can't go on forever. Eventually Epic is going to need to stop losing hundreds of millions of dollars with current EGS policies and actually start making a profit.
All look equally fairly annoying to me.
Bar Gog.Com.
And if anything, Epic, unlike Valve, supports Gog's launcher officially.
Also, that argument to a large extent builds on the assumption that you can't (reasonably be expected to) use both. Which... of course you can. If you want Steam chat, community features, or anything else, we'll then Alt+Tab out of your EGS game and do so. It really isn't a big deal. Nah, it's a tool of someone whose main resource is money, and who is fighting a decade+ incumbent. If your demands is that they offer something Steam doesn't offer (beyond specific games), then... what would that be? It would need to be mind-blowingly good to suddenly make EGS win in terms of features - and that kind of development effort takes years and years. You're overstating the value of that benefit though. That's like saying it'd be good if Amazon just bought out every other store chain out there, as you'd have one storefront for everything. It's myopic and simplistic at best. And besides, GOG, Playnite and others offer unified cross-platform game libraries. ... because those 18% now go to the developer - i.e. the company providing by far the most benefit to the customer - instead of the company providing a storefront, a forum, a cloud save service and some other stuff? Like, what are you paying for, using Steam or playing games?
And yes, executive salaries and bonuses are horrible. But how does that affect whether Steam or the developer deserves your money when buying a game? Man, sorry, but aren't we allowed to argue for (or against) things? Nobody here has said anyone else is inferior, at least that I've seen. Saying someone's reasoning is weak or poor is not saying they are inferior. It's how things improve. If we can't challenge each others' opinions, how is anything ever going to evolve? This is a silly and overblown taking to extremes of a hollow straw man argument. Arguing for the value of competition and the value of EGS as a realistic competitor to Steam is not arguing that people shouldn't use Steam. There are valid reasons to dislike Valve and Steam, and there are valid reasons to be unhappy with Epic's storefront. But presenting arguments for adopting multiple options as if they're arguing for dismissing previous options? Sorry, but that's just poor reading comprehension at best, or bad-faith misrepresentations of your opponents at worst. Either way it's inaccurate and not conducive to constructive debate.
In any case, EGS store is a fail from all points of view. Steam will remain with the biggest piece of the market and so will the 30% cut. That 12% cut dosen't seems like it's working for epic and the devs who have moved to EGS, or they wouln't be losing hundreds of millions lol.
Competition and more options are good, but Epic isn't even competing... this is still a massacre. If only they would stop bribing devs for exclusives... let the end user decide where he want to buy his games from all available stores.