Epic has sunk $500M into the Epic Games Store, doesn't expect to make a profit until 2027
Well, at least it can afford it.
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[PC Gamer] Epic has sunk $500M into the Epic Games Store, doesn't expect to make a profit until 2027
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I always wonder, how much of this could've gone to serving more of a publisher role and also developing new games exclusive to the EGS. Feel like it was grossly mishandled.
And my random games collection thank them for it. It feels like I have a game service like Gamepass without having to sub to them. I will miss this free games weekly thing when it's gone.
Also their game sales are usually crazy, especially when they stack with already existing sales, like Ubisoft's own sales.
Also their game sales are usually crazy, especially when they stack with already existing sales, like Ubisoft's own sales.
Well, at the very least even if it didn't result in original games being developed for it, it resulted in easing the risk of launching a game for the dozens of games that had a deal with them. I'm not really sure funding original games would've pushed growth that much further (if at all) since even bigger publishers like EA eventually caved and went back to Steam.
The EGS's entire existence is tied to Fortnite's success. Even now, I don't think Epic would continue supporting it if Fortnite tailed off into nothing.
IIRC the court docs said YOY since it launched, its making less in profit. Even in 2020, a pandemic year.
so relying a Fortnite is not good for them
The real "What if" is what if they had used all this money, time, and resources to set up a Gamepass type service.
Would have been a fundamentally different proposition, that I think would have been far better received, and far more successful.
Imagine if instead of giving out all these free games, you got access to the entire library for $5 a month. Obviously would have required different agreements with the partners, but I could see it working.
Agreed. I think this was a massive missed opportunity on their part. They had a chance to be Netflix but instead spent half a billion to make a more annoying and less popular Blockbuster.
"It's just another launcher, I don't know what the big deal is" says concerned drive by Era poster in EGS threads who fails to understand why EGS is terrible
Like clockwork, let's see how long it takes to see something like that
The idea is for EGS to turn into the new default for Fortnite kids. And exclusive games. Sales
If that can work out... well.
Exclusives don't matter in the PC gaming landscape. If they did, then EGS would be more successful from the moneyhats. The market has spoken.
I was more just talking about from a financial standpoint. I would expect Epic to also go to Steam. But that isn't their goal I guess. I wish them the best, I feel like they have amazing engineers with UE and Fortnite. Such a shame it feels like they're just wasting it.
Really? Why then give money to devs for games like control, when people that play fortnite wont care about it. Doing these exclusivity deals and giving away games is rather strange then, it seems like they wanted people from steam to move to esg.
Here are a couple of bangers from the past that will age just as well as this:
Sensationalist reporting
Facebook will never have significant profit 2013 - https://finance.yahoo.com/news/why-facebook-never-significant-profit-153325085.html
YouTube is not profitable 2015 - https://www.businessinsider.com/youtube-still-doesnt-make-google-any-money-2015-2
How it turned out
Facebook Profits Top $10B as Revenue Soars - https://sanfrancisco.cbslocal.com/2021/07/28/facebook-profits-top-10b-as-revenue-soars/
Google sets all-time records as search and YouTube profits soar - https://www.theverge.com/2021/7/27/...record-revenue-profit-youtube-ad-cloud-search
Sensationalist reporting
Facebook will never have significant profit 2013 - https://finance.yahoo.com/news/why-facebook-never-significant-profit-153325085.html
YouTube is not profitable 2015 - https://www.businessinsider.com/youtube-still-doesnt-make-google-any-money-2015-2
How it turned out
Facebook Profits Top $10B as Revenue Soars - https://sanfrancisco.cbslocal.com/2021/07/28/facebook-profits-top-10b-as-revenue-soars/
Google sets all-time records as search and YouTube profits soar - https://www.theverge.com/2021/7/27/...record-revenue-profit-youtube-ad-cloud-search
Gee, it's almost as though starting your own digital games store is really expensive and requires you to invest in features that encourage people to want to use it. Hmm, if only there was a way to get exposure on a digital games storefront people wanted to use at the expense of allowing a competent entity to take a larger cut. It's almost as though Epic doesn't understand how to run a successful storefront that doesn't hinge on the popularity of a single game.
I think most consumers saw these companies as successful, just that their operating cost were way higher than revenue. Epic cannot generate a userbase for EGS outside of Fortnite.
I bought one game there because it was cheaper at the time. Most of the others I bought were temporarily exclusive to EGS at the time, so not available on Steam yet.
I use Game Pass, EGS, Origin, and Steam pretty interchangeably. Just want to enjoy the games I want to play. I have a lot to deal with in real life already to worry about platforms.
Youtube and Facebooks were the dominant players at that time already and had no real contender. They were in an open sea were they only needed to find how to monetize that dominance in new ways. People at the time of making those predictions didnt realice how big targetted internet advertisement and data harvestign could be.
Meanwhile Epic is entering a pretty competitive ecosystem that has already reached maturation. The fact that in their second year of life where they should be expected to still have crazy growth numbers they grew well below industry standard says otherwise.
The two are two things to keep in mind:
1) EGS is already experiencing near-stagnant YoY revenue growth. Fortnite revenue for 2020 was up less than 2% and third-party revenue up by less than 6%, and that's despite a pandemic and a ~50% increase in the total number of accounts.
2) Sweeney's comment that he doesn't expect EGS to reach operational profitability in 2023 all but confirms that's when the freebies, sale coupons, and exclusivity deals will either be significantly pared back or terminated altogether, which is going to adversely affect growth and engagement metrics.
Fortnite revenue may eventually offset the losses as Epic's investment is scaled back, but there's no realistic chance of EGS growing into a legitimate competitor to Steam.
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I can't imagine this info will be good for Epic's case against Apple. It's hard to argue that the App Store's policies are unfair when the alternative store you're running on a different platform is bleeding money. How is any online store that doesn't have effectively infinite money supposed to compete with EGS's aggressive cut and sales/free games tactics? It's pretty much predatory pricing.
Me neither. They've been conditioning users to only bother with EGS when there's a free game, exclusive game, or big sale and those all cost Epic lots of money.
Right now, all else being equal, yeah I'll buy from Steam 100% of the time. Because that's where all my games are, and it's more convenient to have all my stuff in one place.
But EGS is hoping to get people when things aren't equal. EGS exclusives and lower prices. And once they've built up enough momentum, Steam's advantage of being "where all my stuff is" goes away.
I have actually paid money to EGS once. Maybe even twice? Some of their sales are very good. But obviously they get those prices by burning their own cash and hoping it'll eventually let them turn a profit.
I agree, the difference between the two are too big:
EGS is an average store at best, Steam on the other hand, it has so many features and framework, it's pretty much an entire platform on its own.
Amazon never made a profit in how many years?
I only care about price. I bought Horizon on the EGS because of price only. I dont care about any other feature tbh.
I only care about price. I bought Horizon on the EGS because of price only. I dont care about any other feature tbh.
That was with respect to operational profitability -- yearly EGS revenue eclipsing Epic's yearly investment -- not overall profitability.
Ah, two random articles about two other unrelated companies, you certainly gave it the ol' college try.
To be fair, that is what EGS is in the end. The revenue from the store is not what makes the store interesting for Epic (the revenue they would make for it is very much marginal and even if appreciated, not really enough to make it the main revenue driver). What Epic clearly wants (as said by Tim) is more about creating an ecosystem that they can feed into their metaverse / own games, together with all the information that holding a platform gives you in terms of what gamers want.
Profitable year is 2023 (aka, drop free games / expensive parts dragging profitability).
Pure profit of the project 2027 (at best), that would mean recouping investment.
I doubt Fortnite kids are even claiming the free games
To try to compare EGS to products that billions of people were already using before completing a profitable business model is laughable at best.
Yup. It's always been this.
Fortnite money > ??? > Bigger than Steam!
Well, in my experience, as someone who regards Steam as the best platform for gaming in existence:
EGS has regional pricing in my region, Steam does not. This means there are times I can get a game significantly cheaper than on Steam.
I couldn't care less about Steam's outdated community feature, so there's virtually no difference between the two launchers for me. They both start up within seconds and launch my game. I'd much rather fork over cash to Epic than Valve though so I lean towards EGS.
The commentary around EGS is just as toxic, mocking, and will ultimately be proven wrong just like the news articles about YouTube not being profitable and Facebook struggling to make money.
Spend $500 million to build, pay $30-50 million to upkeep yearly, and have a money printer for decades to come.
Software has a marginal cost of $0 per unit. And it lasts in perpetuity (contingent on Epic Games not pulling plug). It's not a winning bet to call the service doomed.
Thanks for the clarification on that.
I think it was they were expecting a yearly profit to start in 2023 but would not break even until 2027.
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