Epic is going to lose at least $ 330 million as a result of all those exclusive Epic Game Store and free games. But on Twitter, Tim Sweeney, CEO of Epic, sees this as an investment and seems surprisingly excited about the loss of hundreds of millions of dollars.
This information was noticed and indicated by PC gamer from new court documents emerging from the ongoing legal battle between Apple and Epic. As these two big companies fight each other in court, we all get a new insight into the financial situation of the Epic Game Store. It’s not great!
Epic has spent $ 444 million acquiring exclusive and free games for the store. This money went towards a number of “minimum guarantees” for publishers and developers. These minimums were paid out to publishers regardless of whether a game sells well enough to cover it, which is why so many companies have closed Epic Game Store deals. A guaranteed bit of money is better than a possible loss. For example Check exclusively in the Epic Game Store Epic paid out $ 10.5 millionIf we look at Epic’s End-year report 2020 and doing some math, we find that players spent $ 700 million on the Epic Games Store in 2020, but third-party games, which Epic negotiated deals on, only accounted for $ 265 million of that large number. So that goes away millions in advances and minimums that Epic still has to recoup. If you include the 2019 deals, Apple estimates it $ 330 million.
According to Apple, the Epic Game Store will cost in total, including expensive exclusive offers, free games and all other expenses Fortnite developer about $ 600 million in losses by the end of this year, and that the store won’t become profitable until 2027.
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Epic, in a rebuttal, revolves this in a different way. The lawyers explained that this is all part of the plan. That this is just a big (VERY BIG) investment to grow the store and user base quickly. Epic also claims that even with its smaller 12% drop in sales in transactions, the store will turn a profit by 2023.
In response to IGN Tim Sweeney reported on the massive losses and seemed okay, even excited about all the money Epic lost. “That’s right!” Sweeney said, “And it has been a fantastic success reaching gamers with great games and a fantastic investment to grow the business!” He also tweeted a big old infographic which looked nice, but also not how much money Epic lost in the store.
The ongoing legal battle between Epic and Apple began in August 2020 after Epic quietly added a feature to Fortnite that allowed players to purchase in-game V-Bucks through their own payment system, bypassing Apple’s system and the phone manufacturer’s usual cut . This is a big no-no and shortly afterwards the game was ripped from both the Apple App Store and Android’s Google Play Store
Since then it has been been back and forth in court between the two companiesEpic says it and other developers should be free to sell their own apps and services on devices such as the iPhone without the intervention of Apple. Apple says no. And so the legal battle continues.