Epic Games Store may have launched nearly five years ago but according to the latest reports, the company is not making a profit. The company behind Fortnite spent a pretty penny obtaining some shiny PC exclusives for launch and going by this news, it doesn’t appear that this investment has paid off further down the line.
Not content with shelling out masses of cash upon launch, the company has continued to hemorrhage money to obtain PC exclusives, the latest of which is Alan Wake 2. Epic Games Store also continues to offer free weekly game giveaways in a bid to tap into the lucrative PC gaming market, so the question is, how are they not turning a profit?
What is Epic Games Store doing wrong?
As seen on The Verge, Epic made confirmation of this at the ongoing Epic vs. Google Trial. The company filed a lawsuit alleging that Google’s mobile app store constitutes an illegal monopoly over apps and in-app payment processing. This is off the back of the legal action that they raised against Apple for a similar which concluded in favour of Apple earlier in the year.
Things seem to be going from bad to worse for Epic after the substantial layoffs in September, which saw around 830 employees made redundant. In a market that is completely dominated by Steam, many will wonder how the Epic Games Store will survive, given the current financial climate and the fact that they aren’t making any considerable profit of note.
Epic Games Store boss Steve Allison was on the stand in the ongoing Epic vs. Google Trial and stated that although the company was not seeing profit ‘yet’, it was dedicated to maintaining growth. The statement is slightly surprising given the recent company layoffs and no doubt many will be wondering how they intend to grow the company after a high number of redundancies.
Despite offering attractive revenue terms for publishers and developers to try and bring more games to the platform, the company is still running at a loss on the eve of its 5th anniversary next month. Compared to Valve which takes a 30% cut of Steam sales, Epic Games Store is said to offer publishers and developers an 88/12 revenue split.
The recent news regarding Epic Games Store’s failure to make a profit since it launched appears to not have surprised many in the community, going by comments on social media.
“I like the free games and all, but still f**k the EGS. Epic has f***ed over the PC market with these horrible exclusivity deals and Epic hasn’t made meaningful improvements to the launcher still, years later.” – @videotechuk_
“Sounds to me that in another 10 years from now. They’ll close EGS and add fortnite, alan wake 2, and many other games to Steam. Which is good because one less launcher to download.” – @Pc_Elitist_
“How can you be a company in PC gaming for such a long time and still not understand the market.” – @DDR4_Gaming
It appears that whilst many players are happy to log in every week to get their free game, not many people are happy to pay for anything, which is probably a telling statement regarding the company’s current fortunes. With Steam breaking a record for concurrent online users at the turn of the year, it appears that Epic will struggle to compete for some time at this rate.
With Epic currently engaged in a costly legal battle with Google, the last thing the company needs is to be not turning a profit. Despite being launched nearly 5 years ago, the fact that the Epic Games Store is not seeing profit might be viewed by some as worrying. Whilst the focus may be on growth for the company, many will wonder how long that can go on without seeing a return on what has been a considerable investment.