According to the filling, Epic has lost around $181 million & $273 million on EGS in 2019 and 2020, respectively.
Same thing Microsoft is doing with GamePass here. Utilizing profit-heavy elements to offset losses on investments in other business areas. Did anyone really expect them to be making tons of money with all the free games they throw out there? Obviously Fortnite is funding their foothold here. Too bad Epic can't lose $10 million more to improve the store with features that have been on Steam (and GOG) for ages now.
The losses are most likely to be from the expense of including the weekly free games and the great costs incurred from paying the developers. But it’s biting it with the hope of growing consumer loyalty so in the long run it can be profitable.
It's pretty crazy, I have gotten over 100 free games from them and haven't spent a dime in their store. haha Thanks to all the Fortnite kids!
@JustTheFax Hahaha, at first I thought your post was one of those spam posts that you see here all the time. You know, "I have earned $2000 in one week working from home".
@fax well you did sell your soul to the devil, divine punishment will come in time ;)
did not happen..won#t happen since too many of us are loyal to Steam and are just having egs accounts for the free games without buying anything there
At least they will become profitable in a few years. “New court documents reveal that the Epic Games Store is expected to be profitable by 2023 and has spent over $700 million in revenue share to developers.“
I'd like to know where this sharp swing from big loss to profit is supposed to come from. I would imagine the expectation is that they'll dial back the free games and try to get those only there for the freebies to become actual customers, but my stance from the start has been that no strings attached free games won't build a customer base. With that in mind, I'd wager Epic has put themselves in a bad place to turn around the money bleeding EGS.
@lucky, I agree, the big ticket free games had to hurt. There aren't as many of those today and I expect they'll continue to diminish. And I don't know how much the exclusives for a year costs them but I think they need to keep doing that to survive against Steam.
@lucky They probably think that people will just start sticking to the service when they've given 0 incentive for anyone to do so. Free games and timed exclusivity and people still avoid them like the plague. If you read the suit, the way Epic speaks and talks they talk as if they expected Apple to just bend over when the lawsuit happened. They also expected a bunch of children to root for them online but nobody cared. This pompous out of touch ego is whats going to kill their store and leadership.
It makes me vomit every time i have to open epics stupid store.
"Epic expects its store to turn a profit in 2023, though this sounds like an optimistic scenario." Keywords, "Epic expects." This is based on an Epic court filing. It's going to steer more toward optimism than realism.
Except Phil Spencer has stated GamePass is completely sustainable business as it stands. I’m not sure you can exactly lump that in as given it’s losing money.
Phil Spencer says a lot of things.
"We’re definitely investing in it, but not investing in a way that’s unsustainable." That's in no way saying it's profitable right now. If you read between the lines, he's actually saying the opposite. I'm sure they have a plan to make it profitable in the future, just like Epic does...
@crazycoconuts It's crazy how twisted that statement is when PR falls back to fallacy statements. You can say anything, and then when people repeat it back later suddenly it's exactly what he wanted people to think without ever needing to lie about it.
All Phill Spencer does is flap his flip flapper.
So all you console warriors talking smack really can't point to any factual evidence. A sustainable business is not a business that is losing money. But Spencer reassured listeners that the Xbox Games Pass is “completely sustainable” at its current cost, and there are no plans for a price increase anytime soon. “I say there’s no plan for us to do anything like that. We like the value that Game Pass is today and from a business model it’s completely sustainable the way it is and I mean that,” he said. For a business model to be completely sustainable just the way it is... it cannot be bleeding money, because bleeding money is not sustainable. And I said you cannot automatically just lump it in as a business that loses money, none of you have presented any evidence that it is losing money as it currently stands... And that was my point.
Being sustainable means they as a company can afford to pay for it. It in no way means it is making them any profit.
Why would anyone trust Phil Spencer?
They've got a long way to go to match Steam. And it's not like steam is standing still either...
Yes, I'm sure Microsoft's losses are even higher giving away more games for $1/mo.
@Magog, Do you have the conversion rate of how many of those people flipped to a subscription? If you do please post them... I'm guessing you don't?
Wow, didn't expect to see such high loses. But like everything, you have to pay to play, especially with the big boys.
That is a bit surprising. Because while it was pretty obvious that they weren't making money with third party sales - their last earning report point out to something close to 30M (before tax) in 2020 coming from third party games, that get even lower after factoring the 23M that Epic gave away in the form of coupons - anyone would assume that their own games would still be able to foot the bill. Given that they are more than 60% of the total store revenue and contrary to third party software EGS is not restricted to only 12% of their revenue. But if this reports are to be believed. And look like they are. In 2020 alone the EGS costed almost 1B to run.
I stopped using EPIC because there was an error that wouldn't let me login for a month.
I have to say when it comes to pc gaming, steam is the only reliable storefront for me. I've had some issue or other on all the other platforms that stopped me from accessing games at some point. I'm not talking about consoles here.
GoG has been solid for me. I have most of my games there with some Total War stuff on Steam, because I can't get them at GoG.
Anast Even gog messed up on me with an update making it so my baldurs gate 3 game wouldn't recognize for some reason and the cyberpunk 2077 pre order pre download glitched where it wouldn't unlock the game. Had to rebut both on steam. Everything else on gog works right now though that I downloaded
Never had a problem with GoG. Pre download of cyberpunk worked for me With steam I had a couple of login errors, where a game wouldn't start and I couldn't launch steam manually. Worked after rebooting but still...
Giving games like GTA V for free is expensive.
Did anyone not expect that? It's just how it works until you establish yourself with the big boys. Their Unreal Engine profits will cover any losses easily.
If you read the suit theres way more to it then just this. Not only did they lose hundreds of millions they got taunted by Apple for the fact they're never profitable, provide inferior service for developers, have a much smaller customer base, provide inferior service to customers, and they've been victim to 2 security breaches they've never disclosed. This is on top of the fact they told console makers about the price change months before the suit, but stealth launched it on Mobile to trigger the suit.
"According to the filling" hopefully it's cherry pie filling.
Don't they make that much money a day from fortnite
They will get thier rewards soon. I can't believe I've such a good library built up with epic cheers
Tim Sweeney has about 4.7 billion net worth he can afford it.
I contributed to that. I havent paid Epic Games a single penny. They wanna just give games away? Alright, Ill take free. I dont buy Microtransactions either so they dont make any Fortnite money off of me and Im a happy gamer, taking on The Man. You can own large corporate business, by playing their game but not by their rules, looking for technicalities and Ive got a pretty impressive game collection vs the guy thats spending on parishible digital items we're seeing with PlayStation Store. Who knows, Epic may be ignorant enough to fail miserably but theyre having to use free games to compete with Steam but Steam stands on its own through business practices, etc. Epic is playing the Microsoft game trying to buy everyone off but the smart consumers that know how to take advantage of that without giving corporate a dime make out like bandits and control the corporation.
All the free EGS games are low-quality now. The last decent game they gave out was Troy Total War Saga. It's how PS Plus did when the PS4 came out.
Very cheap loss to develop an entire new platform with so much traction. Just look at Uber, they lost $1.8bil even though the pandemic had everyone order things.
True if is working. But EGS report tell us that is not. Active accounts went from 61M to 56M in the wake of the GTAV giveaway. User spending on third party software is at record low $2.3 while their own games are almost double that. Growth between launch and last year was 5% in revenue but that come with a operational lost increase of 50%. And that on a year where basically everyone that deals with digital was setting records. The thing about EGS is that as a launcher for Epic own games. It's a tremendous success, but as a store that deal with third party software they are really struggling to convert their own player base in costumers and even more to convert the people that got enticed by the giveaways.
The only thing I got out of the report was that they are happy with the way the platform is going and are confident the platform will be profitable by 2023. It is too early to call any trends. There is also significant deep value in the platform because all metrics assume EGS will continue to charge 12% developers fees and not come up with new business models. For instance looking at EGS in a vacuum hides the effect it has on proliferating the Unreal engine in the industry. The bottom line it is too early to call any trends except they have disrupted the industry and "losses" are reasonable in comparison to other digital platforms. Look at Bili Bili, they have around the same losses every year.
@plmkoh Because you read this report in a vacuum. And no public exchange company will publish a report that make them look bad. That is why you read them within the context of the previous established ones, making possible to form a picture of what is happening. All the metrics assume that EGS will continue to charge 12% because that is the only thing that they have to offer. If they ever increase that rate their already unappealing store will be in a even worst position. And as to come up with new business models? That is for sure a possibility for Epic as whole, but for a license store? Really hard to come up with a something new. You really need a citation for this sort of argument: "For instance looking at EGS in a vacuum hides the effect it has on proliferating the Unreal engine in the industry". Without a actual study on the matter that is just wishful thinking. The bottom line is that is not too early to call any trends. Because that is what they are, "trends" and that is how we work in the real world. It is however too early to say that the store is a sure failure, I will give you that. And for the love of all that is sacred don't ever compare bussiness that have nothing in common other than chinese goverment funding. Because we all can do that shit in order to make a point. For example I could pick literally a dozen or so companies or platforms in the digital era that operated with yearly losses and that got wiped out of the map during the dot-com crash.
I'm sorry to hear that. I find it a bit surprising considering that I'm regularly contributing to that site by logging in weekly and downloading plenty of, hum... free games... Seriously though, I'll buy at some point, I promise, but they should take a couple pages off of Steam's book and add features and functionalities, and opt for a better UI. Not that I've ever bought anything on Steam mind you, as my PC is nowhere near beefy enough to run most modern 3D games for now, as I've always been a console player (thanks for enabling mods in the PS3 version of Unreal III back then by the way, Epic!) But, that could change soon. I'm starting to have enough of all those console manufacturers' antics...
Like we didn't all know that EGS only survived like a yunkie addicted to Fortnite money. Taking only 15% of the sales while giving tons of free games and paying millions for timed exclusives, it sure didn't look like a sustainable business, and it's only going to get worse when Fortnite starts slowing down more and more.
Imagine being able to burn through that much money and still be ok.
Or they have very clever accountants and offsetting the losses against profit ..
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