![]() The upshot of all of this is that commentary from Epic’s folks makes it clear that they’re well aware of these monetary shortfalls… and are largely just fine with them. Now, while this isn’t precisely the type of method for using “free” as part of a business model as we’ve talked about in the past, it’s close enough to count. The main driver of EGS’ losses, instead, is Epic’s generous program of “minimum guarantees.” These encompass the advance payments Epic has used to attract so many timed exclusives to its storefront and seemingly also cover the free games Epic makes available to Epic Games Store users every week. On the contrary, though-in its own court filings, Epic says that 12 percent revenue chunk has been “sufficient to cover its costs of distribution and allow for further innovation and investment in EGS.” You might think Epic is incurring those losses because it only takes a 12 percent cut of third-party game revenues, compared to the industry-standard 30 percent cut on other digital storefronts. Documents and testimony from Epic itself show a $181 million loss for the store in 2019 and projected losses of $273 million in 2020 and $139 million in 2021. The raw numbers, as reported in a “Proposed Findings of Fact and Conclusions of Law” document Apple filed last week, show massive incurred and projected losses for Epic’s game download hub, which launched in late 2018. And we have Epic’s battle with Apple to thank for the information. The reason for those losses? Well, largely they have to do with all of those free games and timed exclusives. Well, Epic is getting a decent chunk of market share with its tactics, even as the platform takes on major losses in doing so. Now that we’re 2 years on, how has this all shaken out? ![]() And the launch of the Epic Store in the early days was not without its hiccups, either. Crowdfunding got weird due to the exclusivity. The public doesn’t like exclusives generally. ![]() Then came Epic’s free game releases, where the platform worked out deals with publishers to offer up AAA game titles for literally no money as a method for getting gamers to adopt the platform.Īll of this didn’t come with zero fallout from what Epic was doing, of course. On top of that, Epic used those splits to gobble up a bunch of exclusive or timed exclusive releases of games, which ended up pissing off many in the gaming public and, of course, Steam. Epic’s plan appeared to be essentially a PR battle at first, drawing in the public by proclaiming that Steam’s revenue splits with developers and publishers were bad for the gaming industry and by drawing in publishers and developers with a better version of those splits for them. If you’ll recall, the Spring of 2019 saw a new entrant into this ongoing battle, with Epic releasing the Epic Store. It’s been a while since we’ve checked in on how the PC gaming platform war is going. Thu, Apr 15th 2021 07:33pm - Timothy Geigner ![]()
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