• Light/Dark

New court filing shows Epic has lost more than $450 Million on the EGS in the past 2 years and other interesting facts

Kill3r7

Kill3r7

Member
Oct 25, 2017
24,745
Tuco Benedicto Pacifico said:
Still wondering how this loss-heavy approach doesn't qualify as an anti-competitive practice. They are literally pushing an unsustainable model to cannibalize market share from the competitors.
If Steam wasn't around as the "big fish in the pond" they'd be literally pushing any other store out of business to keep up with their massive spending.

EDIT: I mean, it's a textbook case of "dumping" or "predatory pricing" that is listed as the very first issue:

Anti-competitive practices - Wikipedia

en.wikipedia.org en.wikipedia.org
Click to expand...
Click to shrink...

Epic has a tiny portion of the PC market.
 
Doomguy Fieri

Doomguy Fieri

Member
Nov 3, 2017
5,300
I just bought Maneater on EGS, and realized afterwards, there are no achievements. It's criminal how many basic features EGS lacks after all this time and all this money. I'm becoming an EGS truther. It just exists so Epic doesn't have to pay 30% to Valve.
 
Tuco Benedicto Pacifico

Tuco Benedicto Pacifico

Banned
Oct 31, 2017
8,466
Also, here some amusing extracts from the same lawsuit:

unknown.png

unknown.png


Kill3r7 said:
Epic has a tiny portion of the PC market.
Click to expand...
Click to shrink...
In terms of user base, not so tiny.
Also, that's irrelevant.
 
the_wart

the_wart

Member
Oct 25, 2017
2,268
Matt said:
These are not particularly bad.
Click to expand...
Click to shrink...

They wouldn't be bad... if Epic were succeeding in attracting and growing a paying customer base, but it doesn't seem like they are and I don't see how they'll get there? They're trying to directly exchange cash for market share without ever investing in improving their service. Maybe they genuinely thought that 12% would be enough to build an audience, but it was very quickly obvious that it wasn't enough and they haven't come up with anything else besides throwing money at people.
 
AshenOne

AshenOne

Member
Feb 21, 2018
6,280
Pakistan
DontHateTheBacon said:
It is incredible how much some people on this website REALLY don't want Steam to have a competitor in the same space.

I would assume when you're trying to open a PC storefront to compete with Steam... it's going to be extremely expensive upfront to pry some users out of their normal habits. But as the users grow, eventually they start to make more money and maybe it's possible to be profitable by 2023.

Also, who cares if Epic is burning their own money to give you free games? It seems like consumers would be happy about that... lol.
Click to expand...
Click to shrink...
If you paid attention to the EGS saga on Era, you should know that its not that people don't want a competitor to STEAM since those same people are not tired/fed up or hate on GOG, GamePass/Winstore/Origin/Uplay the same way as they hate or dislike Epic and EGS...the reason is that Epic pay or moneyhat games which means that STEAM version get delayed or in rare circumstances never make it to STEAM which for majority or a lot of PC gamers who play PAID PC Games, is PC gaming. Epic are trying the method that Sony or MS use to leverage over the other.

PC audiences imo for the most part, are used to PC's openess and choice philosophy, so obviously once they see this being a huge inconvenience and an issue, they voice their complaints but Epic just don't stop and neither do they pay attention to buiiding their own platform FIRST without burning money on shitty tactics like moneyhatting 3rd party games. STEAM made a lot of things extremely convenient on PC and has that all-in-one PC gaming feature set. User reviews, forums for individual games, native controller support for nearly any sort of controller, family sharing, inhome streaming, twitch like streaming, etc.. Its the same company that left PC gaming back in the early 2000s when PC retail was nearly died and consoles were booming, calling PC gaming 'not a market for releasing games' or other dumbshit. If its not profitable for them, they will stop all effort into them.

But anyways a new competitor is by all means, welcome. Just don't inconvenience the people who want to play on their own platforms which they are comfortable in. PC is NOT consoles. Moneyhats and exclusives only bring vitriol and dislikes and focus on first improving your platform before you come marching for steam's marketshare..
KBSaint said:
I could see it paying off in the end. I know there are tons of awesome features and research that steam does, but I honestly rarely take advantage of any of it outside of Steam workshop. Epic has done a good job of beefing up my library were I'm way less resistant to only buying steam than I was pre EGS. I'm sure there are a lot of people who love all the awesome extra things steam does that are cringing reading this, but I'm willing to bet there are a lot of people like me too.
Click to expand...
Click to shrink...
I don't even have EGS installed and yet i redeem every big or semi-big game they have on EGS.. for my own needs which are not playing them. Its FREE shit. No harm in redeeming it. I know there are people like you who don't use STEAM as its own platform but just as a launcher or w/e which is fine but Epic's current strategy is highly encouraging users redeeming free games and just not buying games there and just playing f2p stuff on EGS...
 
Buckle

Buckle

Member
Oct 27, 2017
41,379
DontHateTheBacon said:
It is incredible how much some people on this website REALLY don't want Steam to have a competitor in the same space.

I would assume when you're trying to open a PC storefront to compete with Steam... it's going to be extremely expensive upfront to pry some users out of their normal habits. But as the users grow, eventually they start to make more money and maybe it's possible to be profitable by 2023.

Also, who cares if Epic is burning their own money to give you free games? It seems like consumers would be happy about that... lol.
Click to expand...
Click to shrink...
Competition is great but Epic just burning through Fortnite money to get exclusivity and freebies isn't it.

EGS needs more features and support. They need to invest more into the actual platform.

The free games brought me to the platform but nothing I've seen from it has made me want to stay.
 
Last edited:
TheMadTitan

TheMadTitan

Member
Oct 27, 2017
27,414
They're relying on exclusives and exclusives aren't going to work. There's been no fanfare about Kingdom Hearts on Steam. Square barely advertised and everything I've seen across here, Reddit, and Youtube comments point to people waiting for it to hit Steam and other stores.

Epic better be investing in features and not exclusives, otherwise it's not going to matter what games they get if people are willing to wait the 6 months to a year to get them where they want.

jman2050 said:
The planet where video games are an entertainment industry.
Click to expand...
Click to shrink...
Epic makes Unreal. Movie studios, game companies, and tech companies use Unreal. Everyone uses Unreal. Epic could do nothing but Unreal and still make a shit ton of money.

Epic is a tech company. Game companies are tech companies.
 
GrrImAFridge

GrrImAFridge

ONE THOUSAND DOLLARYDOOS
Member
Oct 25, 2017
9,707
Western Australia
The key takeaway from Epic's Year in Review for last year is that both first and third-party revenue grew by a single-digit percentage (~1.4% and ~5.5%, respectively) despite a near-50% increase in the number of user accounts and, y'know, COVID, which suggests growth has virtually plateaued. Yes, Epic is bringing in more users, but they're far more interested in claiming free games than spending money, which isn't all that surprising when you consider how little Epic has invested in improving EGS as a platform.

Edit: The underlying figures are as follows:
- First party revenue: $429m in 2019 -> $435m in 2020
- Third-party revenue: $251m in 2019 -> $265m in 2020
- Total user accounts: 108m in 2019 -> 160m in 2020
 
Last edited:
Glio

Glio

Member
Oct 27, 2017
24,708
Spain
I don't know of anyone who buys from the Epic Store beyond picking up those super cheap sale games. We all pick up our free game every Thursday and that's it.
 
TSM

TSM

Member
Oct 27, 2017
5,846
So three years of the EGS will be about a month of Fortnite money? I can see why they chasing this if that's all it's cost them. The payoff is potentially way larger than what they are spending.
 
Glio

Glio

Member
Oct 27, 2017
24,708
Spain
I have asked my acquaintances that they have the Epic Store installed and for now the ratio is 0.25 games purchased per person.
 

Deleted member 3208

Oct 25, 2017
11,934
DontHateTheBacon said:
Also, who cares if Epic is burning their own money to give you free games? It seems like consumers would be happy about that... lol.
Click to expand...
Click to shrink...
This is exactly the problem. Epic doesn't incentivize people to buy games from their store. Why buy when you can get a (select) game for free each week? Since EGS is lacking so much compared to Steam, when it comes to exclusives people who buy games prefer to wait till the exclusivity period ends. Or play them in Game Pass since some of their exclusives are also in Game Pass.

I would have bought games from EGS since they do regional pricing in my country, something that Newell and Valve outright refuses to do. Yet Sweeney's shitty attitude and with Epic doing exclusives mean I refuse to do business with them.
 
Thrill_house

Thrill_house

Member
Oct 27, 2017
10,706
SolidSnakeUS said:
There was a good month (at least) where PSO2 would just uninstall itself, making you delete the old folders and reinstall entirely. This was when it was on the W10 Store before the Steam version.
Click to expand...
Click to shrink...

Off topic but oh god yes this happened to me. Anyone trying to handwave me losing 200 gb due to this(and other games) installing themselves multiple times and me not having access to them on my brand new computer can get lost. You are definitely not alone and it isn't a small one-off problem my friend.

Anyway, these losses sound about right. They are gambling big on losing out now to gain more later. Just going to take awhile because most folk I know who game on pc don't care for their tactics. If they had decent features and didn't pull this exclusive bullshit I would have no problem using them. Hell I use ubi store, origin and gog when need be and it doesn't bother me a bit.

Fortnite prints money so egs will he fine as long as that trend continues whether I like them or not.
 
EloKa

EloKa

GSP
Verified
Oct 25, 2017
1,910
JaseC said:
- Total user accounts: 108m in 2019 -> 160m in 2020
Click to expand...
Click to shrink...
I keep wondering how many of those 160m accounts are used by real people. I know there were scripts used that automatically created new accounts, redeemed GTA5/Battlefront2 for that account, logged out and repeated this process. Those (pretty basic, but eh?) scripts circulated in big subreddits. I guess all those 1-game accounts were created so they could be sold later on. My bet is that something between 5m and maybe 30m accounts are those 1-game accs.
 
GrrImAFridge

GrrImAFridge

ONE THOUSAND DOLLARYDOOS
Member
Oct 25, 2017
9,707
Western Australia
EloKa said:
I keep wondering how many of those 160m accounts are used by real people. I know there were scripts used that automatically created new accounts, redeemed GTA5/Battlefront2 for that account, logged out and repeated this process. Those (pretty basic, but eh?) scripts circulated in big subreddits. I guess all those 1-game accounts were created so they could be sold later on. My bet is that something between 5m and maybe 30m accounts are those 1-game accs.
Click to expand...
Click to shrink...

Yeah, I've no doubt a fair chunk of them are alts/throwaways.
 
Shogun

Shogun

Member
Oct 27, 2017
1,442
Shard Shinjuku said:
It was understood that the EGS was going to be a loss leader the problem is they are not achieving the growth goals. I think the big problem is they needed to wrap up the freebies a while back so that the userbase would actually spend money.
Click to expand...
Click to shrink...

It's crazy the line that was towed when the store first opened was all about bad spending habits due to sales on games and Epic wanting to avoid that.
 
jman2050

jman2050

Avenger
Oct 25, 2017
5,853
The main question(s) that need to be asked isn't "how much money is Epic spending/losing on EGS?" it's "What is the money being invested into EGS being used for and where is the expected ROI supposed to come from?"

It's myopic to presume that because companies typically burn through cash in pursuit of establishing a core business in a competitive industry that this means what Epic is doing and how EGS is operating as a business is acceptable or "normal". The revenue figures shared by Epic thus far reflect absolutely dismal performance in both absolute terms and in terms of growth over time. They may end up making EGS "profitable" in that they'll stop spending gobs of money on exclusives and free games but then where does that leave them if the amount of money their customers are actually spending on games not named Fortnite continues to remain roughly flat over time? What was even the point of the whole investment then?

None of what we know about EGS's performance is good news, and even framed in the most favorable light the entire endeavor appears to be little more than a vanity project that may amount to pennies earned, all at what appears to be a massive opportunity cost. Handwaving away these very real concerns and issues with "It's fine, burning through money is normal for big companies" is laughable.
 
fanboi

fanboi

Banned
Oct 25, 2017
6,702
Sweden
Interesting how everyone is focusing on Epic and almost no one about how Apple uses their storefront in an advantageous manner.
 
TSM

TSM

Member
Oct 27, 2017
5,846
EloKa said:
I keep wondering how many of those 160m accounts are used by real people. I know there were scripts used that automatically created new accounts, redeemed GTA5/Battlefront2 for that account, logged out and repeated this process. Those (pretty basic, but eh?) scripts circulated in big subreddits. I guess all those 1-game accounts were created so they could be sold later on. My bet is that something between 5m and maybe 30m accounts are those 1-game accs.
Click to expand...
Click to shrink...

People do the same for Steam for when they get VAC banned. People love their burner accounts.
 
Delusibeta

Delusibeta

Prophet of Truth
Banned
Oct 26, 2017
5,648
TortadeJamon said:
They've had some very good sales and coupons over the years. If that can't attract repeat customers, what will? A better store and client, maybe?
Click to expand...
Click to shrink...
That's a large part of the problem: the 'very good sales' are precisely because of the coupons, and the fact that they worked on anything priced $15 or above. So, if a game is $15, badabing, it's a fiver. Considering Epic still pays the dev the equivalent to a full price sale, that's a lot of money lost. So, if the free games disappear, so will the coupons and thus any price advantages EGS has over Steam (ignoring regional pricing differences).
 
Sheepinator

Sheepinator

Member
Jul 25, 2018
28,170
Tuco Benedicto Pacifico said:
Also, here some amusing extracts from the same lawsuit:

unknown.png

unknown.png
Click to expand...
Click to shrink...
Why didn't you post the entire paragraph for that first quote from the Apple filing?

The next sentence was, "Most distributors at the time charged at least a 70% commission.", which means Epic were offering superior royalties even back then. In case you didn't know, those distribution contracts refer to physical distribution, which therefore includes a significant cut to the retailer ultimately selling the game. It's not remotely the same thing as a digital storefront, so there is no "gotcha!" there.

This article can explain it better.

In its latest court filing, Apple gives the term "commission" a new meaning unsupported by dictionary definitions and commercial reality

By mislabeling distributor and retailer margins as "commissions," Apple seeks to distract from structural differences between shrinkwrapped software distribution and today's app stores.

Apple doesn't take any risk, nor does it do any warehousing. Distributor margins, however, involve the physical shipment of goods, and while some agreements with distributors and resellers allowed them to return some or all of the merchandise, some didn't. Even if the customer had the right to return goods, they still incurred significant logistical costs. None of that applies to downloads from a server.

The margin that a publisher or a distributor makes is anything but a "commission." A commission is when someone gets paid without taking a risk, without warehousing goods, without producing merchandise, without giving you shelf space, which (unlike the number of apps available for download from a server) is scarce. The Free Dictionary provides multiple dictionaries' definitions of the term "commission" and none of them is comparable to a publisher or reseller margin:
  • "A fee or percentage allowed to a sales representative or an agent for services rendered." (American Heritage Dictionary)
  • "the fee allotted to an agent for services rendered" (Collins English Dictionary)
  • "a sum or percentage allowed to agents, sales representatives, etc., for their services." (Random House Kernerman Webster's College Dictionary)
Apple's App Store "commission" is largely just a tax. But it's not a margin because they don't buy from you and resell. They collect and pass certain revenues on to you.

For the many who don't even remember shrinkwrapped software publishing anymore, let me provide a quick overview.

In its latest court filing, Apple gives the term "commission" a new meaning unsupported by dictionary definitions and commercial reality

Sooner than I would have thought when I publshed the latest Epic Games v. Apple filings (688 pages in total) , I already feel an irresistib...
www.fosspatents.com www.fosspatents.com
 
spam musubi

spam musubi

Member
Oct 25, 2017
9,398
Buckle said:
Competition is great but Epic just burning through Fortnite money to get exclusivity and freebies isn't it.

EGS needs more features and support. They need to invest more into the actual platform.

The free games brought me to the platform but nothing I've seen from it has made me want to stay.
Click to expand...
Click to shrink...

Yeah, a "too big to fail" company losing hundreds of millions to inject themselves into a market isn't really competition
 
DeadlyVenom

DeadlyVenom

Member
Apr 3, 2018
2,838
I am shocked! SHOCKED! Well not that shocked.

2027 before the store is overall in the black? Yeesh.

What are they getting for all the money? A userbase more and more interested in claiming free games and not spending a penny on third-party games. Or if they do, only when Epic is willing to cut them a $10 check.
 
asmith906

asmith906

Member
Oct 27, 2017
27,580
nsilvias said:
the fact that they lost more during covid when everyone else is booming is writing on the wall for egs
Click to expand...
Click to shrink...
There's was no way they were going to be anywhere near profitable with the number of deals they were making and Free games they give away. This is about getting a userbase invested in your ecosystem. It's like how people refuse to buy games from anywhere other than Steam because that's were their Library is. They figure if you have money invested in their store you're more likely to keep spending with them over the long term.
 
jman2050

jman2050

Avenger
Oct 25, 2017
5,853
asmith906 said:
There's was no way they were going to be anywhere near profitable with the number of deals they were making and Free games they give away. This is about getting a userbase invested in your ecosystem. It's like how people refuse to buy games from anywhere other than Steam because that's were their Library is. They figure if you have money invested in their store you're more likely to keep spending with them over the long term.
Click to expand...
Click to shrink...
That's gonna be mighty difficult when users don't actually have money invested in said store.
 
KDR_11k

KDR_11k

Banned
Nov 10, 2017
5,235
The big worry in this for consumers is that if the store has a tough road towards profitability then there's a higher risk of the store failing to make it there and getting shut down, making you lose all games you own on the store.

I'm certainly not seeing a trajectory towards a profitable future here, they're getting users but they aren't store users, they're freebie dispenser users. Maybe if they pivot to a model where users are the product, e.g. by aggressive advertising and data harvesting ala Facebook?
 
.exe

.exe

Member
Oct 25, 2017
22,376
KDR_11k said:
The big worry in this for consumers is that if the store has a tough road towards profitability then there's a higher risk of the store failing to make it there and getting shut down, making you lose all games you own on the store.

I'm certainly not seeing a trajectory towards a profitable future here, they're getting users but they aren't store users, they're freebie dispenser users. Maybe if they pivot to a model where users are the product, e.g. by aggressive advertising and data harvesting ala Facebook?
Click to expand...
Click to shrink...

Operationally, they're already getting by, so I don't necessarily see reason for that kind of concern. They're just throwing lots of money at exclusivity deals, discounts and freebies right now. Theoretically, I think they could halt that and keep it running sustainably based on what they've said.
 
Sheepinator

Sheepinator

Member
Jul 25, 2018
28,170
KDR_11k said:
The big worry in this for consumers is that if the store has a tough road towards profitability then there's a higher risk of the store failing to make it there and getting shut down, making you lose all games you own on the store.

I'm certainly not seeing a trajectory towards a profitable future here, they're getting users but they aren't store users, they're freebie dispenser users. Maybe if they pivot to a model where users are the product, e.g. by aggressive advertising and data harvesting ala Facebook?
Click to expand...
Click to shrink...
I'm not worried. Epic is a survivor. They've been successful for decades. They're backed by huge companies like Tencent. One years profits of Fortnite likely dwarfs the entire amount of losses from the EGS so far. They're in this for the long haul.
 
eonden

eonden

Member
Oct 25, 2017
17,139
Sheepinator said:
I'm not worried. Epic is a survivor. They've been successful for decades. They're backed by huge companies like Tencent. One years profits of Fortnite likely dwarfs the entire amount of losses from the EGS so far. They're in this for the long haul.
Click to expand...
Click to shrink...
Epic has always survived by casting the things that are not profitable away once a rough patch comes. Looking at you, all the other GAAS that died for Fortnite (and all their other ips)
 
Rosebud

Rosebud

Two Pieces
Member
Apr 16, 2018
44,157
Milk said:
I don't. I like my gaming being consolidated into one comfy platform. Steam is the PC platform. I wouldn't want multiple storefronts on my Xbox and I don't like it on my PC.

Having games I'm interested in locked outside of the comfy Steam bubble is, in fact, annoying.

If people don't care about where they play and "games are games" etc then good for them. Games are even better when they're supported by a good platform.
Click to expand...
Click to shrink...

Yeah I don't see what's so hard to understand. Playing games at Steam increases my enjoyment, so I don't give a damn about "supporting competition".
 
KDR_11k

KDR_11k

Banned
Nov 10, 2017
5,235
Sheepinator said:
I'm not worried. Epic is a survivor. They've been successful for decades. They're backed by huge companies like Tencent. One years profits of Fortnite likely dwarfs the entire amount of losses from the EGS so far. They're in this for the long haul.
Click to expand...
Click to shrink...
I don't expect them to go out of business but I won't count on them keeping the store up if it just doesn't become profitable. Businesses regularly shut down unprofitable services to improve their balance sheet.
 
DarthSontin

DarthSontin

Member
Oct 25, 2017
2,035
Pennsylvania
Instead of presenting a better product for a better value, Epic has been spending a lot of money trying to buy their way in. I enjoy redeeming their free games and want Steam to have a real competitor, but it feels like they're just throwing money at it instead of putting the work in to improve EGS.
 
MrBob

MrBob

Member
Oct 25, 2017
6,671
Glio said:
I don't know of anyone who buys from the Epic Store beyond picking up those super cheap sale games. We all pick up our free game every Thursday and that's it.
Click to expand...
Click to shrink...
This is pretty much me haha. I log in once a week into the launcher to grab my free game and then leave. I might look around if they have a sale with the ten dollar coupon sale but that is it. Pretty sure Epic is actually in the red with me as a customer on their store.
 
GrrImAFridge

GrrImAFridge

ONE THOUSAND DOLLARYDOOS
Member
Oct 25, 2017
9,707
Western Australia
KDR_11k said:
I don't expect them to go out of business but I won't count on them keeping the store up if it just doesn't become profitable. Businesses regularly shut down unprofitable services to improve their balance sheet.
Click to expand...
Click to shrink...

Terminating EGS would take Fortnite PC (and upcoming Epic Publishing titles) with it, and reverting the client back to an Epic Games Launcher isn't something that could be done overnight, so I'd say the worst case scenario is that Epic stops selling third-party content and disables all partner site functionality save for the ability to push out patches.
 
Last edited:
OP
OP
CommodoreKong

CommodoreKong

Member
Oct 25, 2017
7,768
MrBob said:
This is pretty much me haha. I log in once a week into the launcher to grab my free game and then leave. I might look around if they have a sale with the ten dollar coupon sale but that is it. Pretty sure Epic is actually in the red with me as a customer on their store.
Click to expand...
Click to shrink...

Well considering we know from their 2020 year in review they only had $265 million in third party game revenue on more than 160 million accounts you're not the only customer Epic is deeply in the red on.
 
You must log in or register to reply here.