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[PC Gamer] Epic has sunk $500M into the Epic Games Store, doesn't expect to make a profit until 2027
- Thread starter Deleted member 1839
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Makes sense, thanks. However their strategy so far doesn't appear to be aimed at reaching a wider audience if they don't plan on day one releases anyways and not having Horizon 2 on Steam is again not going to gain a successful audience. "Here's Horizon, if you want the second one buy the PS5". That doesn't strike me as a good PC strategy to build upon.
Yeah, I think it's safe to say those talks devolved into Epic making a deal for Predator specifically and Sony taking the money because it wasn't expecting the game to do well.
Edit: Oh, right, and ReadySet Heroes (MP dungeon crawler).
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Following this up, this is also part of why Microsoft isn't putting their games on EGS at all when they started putting them on Steam. It's that and presumably because they know it's a PR vacuum and they need to get some consumer goodwill as you mentioned.
I think the rumor was more related to Epic asking for the games not to be on Steam and MS refusing (Because they wanted to regain trust from the general PC people still). MS has however a game on EGS later on when I guess they dropped those requirements: State of Decay 2
I assume that MS didnt see enough money from that endeavour to currently continue the porting mostly focusing on MS Store + Steam + Xbox.
I mean, PC users have been conditioned until fairly recently for late ports. I agree on you that their current model prevents them from reaching the maximum possible audience, but I think we (the west in general) greatly undervalues the huge amount of people that do not own a console but own a PC and who can be finally targeted through this means.
In the end, the problem for Sony is a tighter balance between creating a new source of revenue on PC while not harming their console one (that accounts for more than 25% of the entire conglomerate!). MS doesn't have to do that tighter balance due to not being a market leader (thus more interested on risky moves that could put them on top instead of maintaining status quo) and having a much bigger "daddy" to pay for their issues (while Sony Gaming is one of the parts paying for most of Sony).
Ready Set Heroes as well. That game bombed so hard Sony didnt even bother with a Steam release.
As I said above, it's not really goodwill to be putting out Horizon and then announce the second one but not on PC. Microsoft is not treating the PC as a secondary market, the goodwill is in support.
The whole thing reminds me of Always Sunny
Replace Paddy's Dollars with coupons and free games and it's literally just describing this:
Replace Paddy's Dollars with coupons and free games and it's literally just describing this:
So do I and it makes complete sense tbh
That seems like expecting a lot of generosity on the part of us gamers when supporting the streamer also means losing Steam's features. I guess it could make more sense in the far future if kids who are raised on Fortnite grow up and somehow don't learn that Steam is a thing and/or really love their favorite content creators.
Still so weird to me that they pumped all this money into exclusives and free games, but didn't bother to achieve feature parity with steam. Were things like no user reviews actually a choice by epic? I guess they did finally add achievements in some capacity. I know you can't throw a ton of engineers at a problem to accomplish it instantly (the mythical man-month, etc.), but if they had always planned to burn this kind of cash on it, you'd think they would have spent more on staff to provide a better technical foundation.
i mean, ok? Who in 10 years is going to care that the first 7 years weren't profitable? It's a private company with cash to burn who sees the investment as worth it? As long as it prints money in the future no one cares what you lose now. Source: Uber, Lyft, Palantir, Twitter, Slack, Youtube, etc. This is how software investing works.
Another good answer. I also wonder if Sony thinks they can be like Rockstar and get people to double dip? Announce the next Horizon a year after it comes to PS5 for example. I think that is also their strategy.
As for Epic they really need to get to parity first with Steam. You can't expect people to come back if another store is simply better. They won't retain people with free games because there is no investment there.
The title for that second YouTube article does not match the content. There's no mention of YouTube being profitable just that the revenue almost doubled from last year.
I've only ever heard that YouTube is a money sink for Google even with the ad revenue, but I'm also unable to find anything on whether or not it's profitable.
I'm absolutely baffled that they'll invest half a billion into buying exclusivity but can't be bothered to build out decent social features. Surely it's not that difficult for a company like Epic. We all love Steam because of reviews, communities, Workshop, even fluff like stickers and badges and profiles - why is EGS so bare bones after all this time? It makes no sense at all to me.
Perfectly explained. It's exactly why Kingdom Hearts (seemingly) bombed on EGS despite being one of the most in demand franchises for a PC port.
If you're either a new publisher to PC or bringing a franchise that's new to PC, taking exclusive deals like that can be extremely risky. Hell, we even saw something similar with Microsoft's games coming back to PC, and they own Windows. Most of them didn't see success until they hit Steam; now they're constantly in the best sellers list.
Then people would just stop claiming the free* games lol
That's the thing, though: EGS is already experiencing near-stagnant YoY revenue growth (and is likely to see a decrease this year due to the dearth of exclusives), and growth and engagement metrics are only going to get worse come 2023, when Epic's "user acquisition" phase comes to an end and it switches focus from freebies, coupons, and exclusivity deals to a path towards end-of-year operational profitability.
But you're assuming it will print money, and unlike things like Uber and Youtube, EGS is going against a much better service.
Imagine if right now someone tried a Youtube competitor. MS (the richest American company right now?) couldn't fight against Twitch and Steam.
Uber, Lyft, Slack, Youtube, Amazon, Netflix, etc. They are all market leaders and lose money to keep increasing their dominance in the market. EGS is not close to being the market leader. Rather, they are fighting to ensure their ecosystem is sustainable after Fortnite dries up. Instead of improving the service, they are offering unmatched discounts, free titles, and focusing on influencers.
They are Dailymotion to Steam's Youtube
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You didn't answer my question before. Where exactly is the money gonna come from?
You don't just invest money blindly, there has to be some kind of plan for profitability down the line. Or is the prevailing wisdom that you just get a bunch of people using your service (or in EGS's case, occasionally acknowledging it exists when free games or coupons show up) and then figure out the details later? Cause if that's really how software investing works, I definitely would not want to be in that business…
That's how the EGS got pitched at an GamesCom 2018 Epic after-show party. To be fair, 90% of the attendees were invited influencers so it kinda made sense that they mostly talked about how influencers will profit from EGS (and also why you could immediately sign up to become an EGS-influencer). Everyone from Epic you spoke to was only talking about how a handful of exclusive titles will help streamers to pull in new users from Steam and by doing so create ref-link profits.
The word "features" didn't really drop at all.
But the party was probably the best after-show party I've ever seen with Initial D arcade cabinets. Epic is actually really really superb in leaving a good impression when they want to. This makes it even more incomprehensible that they aren't trying to offer a better service with EGS to win over customers that way. Especially if you consider that they could craft the best experience on the market with their current warchest.
Maybe if they had an actual plan in place, 2027 would be realistic. As it stands, they failed to ever provide a competitive advantage and they probably never will. The free games are cool, but everyone buys their stuff elsewhere.
Let's be entirely honest, EGS will be shuttered when the Apple lawsuit inevitably fails and when the games Epic signed publishing deals for ship. I'm guessing 2024 or 2025 for the announcement, and EGS going dark six months later.
That "Why Facebook will never make a significant profit" is an article where an outsider makes prediction based on public data.
That "YouTube Still Doesn't Make Google Any Money" is an article reporting based on hearsay story and public data regarding the financial status of the service at that point of time.
These articles has entirely different contexts with the article in the OP is what I am saying, hence there's no reason to bring up those articles.
Because Epic likes throwing money at games to keep them away from the launcher people actually like.
I didn't even find any reason to buy any game from their store reverb with the 10$ coupons they normally give away. I just get the free games when u remember to check the store and hope to one day maybe play them which, if it happens, will be in a steam deck lol
For the bolded, I always thought that buying up other multiplayer game devs to try and score another GaaS hit like a normal publisher was a smarter move than the current exclusive games strategy. I'm not a fan of the moves as a consumer, but buying Rocket League and Auto Chess is a completely logical business move to me. Same goes for BL3 exclusivity since that's the type of game that will keep people coming back to the launcher. Instead, their existing Fortnite is a complete mismatch with the indie darlings they tend to target with deals.
Now that I think about it, it probably would've been a smarter move to at least try to turn Unreal Tournament into a platform with microtransactions too. There's no way it could be as big as Fortnite of course, but I can easily imagine it doing better than Quake Champions if they made the art style more cartoony and had crossover events, etc. Instead they canceled it and made everyone work on Fortnite instead.
That all tracks (and I am kinda jelly of the Initial D ngl) but I really don't get it either. Between this and the weird #FreeFortnite stuff it seems like they felt that all of the hype and goodwill from that fanbase could essentially bend reality. Maybe all those young Fornite fans really will have that kind of brand loyalty in a few years though, who knows.
Total armchair analyst here I know but I'd honestly be surprised if they manage to really ever make any sort of profit, especially by 2027. They've pretty much pissed off a lot of PC Gamers with the exclusive games (and remember, that first batch of exclusives were announced very late, particularly Metro) and their choices for exclusive games pissed off even more people (Outer Worlds and Shenmue 3 in particular) and over 2 years later they still lack several of the basic features that Steam has and they haven't even bothered to carve out their own niche to justify it (Windows store has Game Pass, GoG has no DRM and lots of old games, for example) which means that people aren't really using it as much as they could be. Not just that but they still aren't consistently getting every big third party game that Steam does. There's no Mass Effect, no Final Fantasy, no Tribes of Midgard, no Dark Souls, no Elden Ring and many more. Even for games that are on there like GTA 5, none of the previous games are there like they are on Steam
Right now, people are gonna be going to the EGS for the weekly free games and for Fortnite. If/when they stop the free games, people are going to stop going to the store and with their limited library of day and date releases and limited functionality, they'll likely have less revenue to match it. If Fortnite ever really dies, the same thing will happen, people won't be going to the EGS every week or every day and potentially see the sales or think to buy games.
Lastly, they also haven't done anything to really convince people to buy on EGS over Steam barring regional pricing. Steam is the default for a whole lot of reasons and one such reason is that they have physical gift cards you can buy. I can go to Target and right next to the Xbox and PSN gift cards there are Steam gift cards, but there's no such thing for Epic, even digitally. I'm so heavily immersed in PC gaming and Steam in large part because when I was a teenager and got my first laptop I got some Steam gift cards not long afterwards even though I got Steam only for COD World at War
Right now, people are gonna be going to the EGS for the weekly free games and for Fortnite. If/when they stop the free games, people are going to stop going to the store and with their limited library of day and date releases and limited functionality, they'll likely have less revenue to match it. If Fortnite ever really dies, the same thing will happen, people won't be going to the EGS every week or every day and potentially see the sales or think to buy games.
Lastly, they also haven't done anything to really convince people to buy on EGS over Steam barring regional pricing. Steam is the default for a whole lot of reasons and one such reason is that they have physical gift cards you can buy. I can go to Target and right next to the Xbox and PSN gift cards there are Steam gift cards, but there's no such thing for Epic, even digitally. I'm so heavily immersed in PC gaming and Steam in large part because when I was a teenager and got my first laptop I got some Steam gift cards not long afterwards even though I got Steam only for COD World at War
It makes me wonder what is Tim Epic's plan. The man is a narcissistic piece of shit with a big ego, but surely he must have realized that EGS right now depends on Fortnite's success. Epic strategy in moneyhatting third-party developers not only didn't work, it also backfired. So what is his deal? At this current pace, I really doubt that by 2027 EGS will make a profit. Epic even continues refusing to add features like user reviews or forums.
EGS could have been a good competitor, but Epic decided to go with the 'easy' way instead of developing a robust storefront that would attract customers.
EGS could have been a good competitor, but Epic decided to go with the 'easy' way instead of developing a robust storefront that would attract customers.
The #FreeFortnite stuff is surreal because it was kind of written off by most as a tone deaf PR gimmick, but given how the actual lawsuit played out I can't help but continue to believe that Epic truly, seriously was expecting Apple to bend the knee and give Epic what they wanted and that the lawsuit was never supposed to happen at all. Like they thought that they could mobilize their Fortnite fans into enough of a frenzy to do legitimate damage to Apple as a company and when Apple said "nah, we're good, see you in court" it was a genuine surprise.
I just can't believe the alternative that they wanted a head to head battle with one of the most powerful companies in the world on extremely tenuous legal grounds, because that's just incomprehensibly stupid.
Incrusting yourself into the market share of PC digital storefronts when Steam is such an absolute immovable bastion is gonna cost, a lot. This should be expected.
What are Epic's other sources of revenue? Their film and television stuff? Engine technology? Realistically, is that covering the store?
Microsoft was taking a bath on XBox forever, but they never really felt it, does Epic feel the EGS?
Microsoft was taking a bath on XBox forever, but they never really felt it, does Epic feel the EGS?
Epic has raised billions dollars of venture capital in the last few years (presumably all to spend on the store and other future ventures -- a wildly profitable company doesnt raise money unless they need to spend fast)
they literally just raised another billion this year at almost twice their 2020 valuation, including repeat investors, so their investors clearly believe in how the business is going
lots of people getting lots of free games and lots of smaller developers getting financial support
i can't be upset about this
i can't be upset about this
Even with the timed exclusives people are waiting for Steam (according to their own data).
Yep, gotta spend money to make money.
Epic is in it for the long run, I doubt they expected to turn over a profit within the first three to five years.
I never expected to really get into pc gaming but the Deck has me sold. Kicking myself for not paying more attention to the free epic games. Redeemed some for the hell of it, but missed out on lots of really good games.
I know some take issue with Epic, but I see them as a big positive for pc gaming. At least for myself. Hopefully they can keep up giving away games for some time.
I know some take issue with Epic, but I see them as a big positive for pc gaming. At least for myself. Hopefully they can keep up giving away games for some time.
Here's data from the lawsuit, $100-$125 million in revenue a year off of Unreal. IDK about profits, but if they were losing money on it I'd bet it's because they're deliberately undercutting Unity with their pricing. There's also all the other middleware acquisitions they just made to consider too.
They also have piles and piles of investor capital.
I don't get it either. I don't think the case is definitely gonna go in Apple's favor but it certainly seems like an uphill battle and I can't imagine this was part of the plan either when it started with Tim Sweeny emailing Tim Cook demanding that he be allowed to put EGS on iPhones.
but here we are with people wanting to be a failure.
It amazes me how quick the mod team actsd against the people trolling with the "but is other launcher comment" but turns the blind eye to the people trolling and shitposting about this, i findo those are in the same spot.
I play Fortnite and was baffled, like they really thought they had a personal army in Fortnite players.
Even the subreddit was mocking it.
They will open store for all developers any day now. That will sve them. I still can't believe that 3 years later store is still closed for majority of developers. But again it is kinda logical because even with current limited number of games releases get buried really fast. I really would like to see sale numbers per day for some indie games released year ot two ago.
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