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Business Epic Games lost almost $181 million & $273 million on EGS in 2019 and 2020, respectively

KyoZz

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A new court filing has revealed some interesting new details about Epic Games and Epic Games Store...



According to the filling, Epic has lost around $181 million & $273 million on EGS in 2019 and 2020, respectively.
This basically means that Epic Games Store has not been profitable these past two years. Epic expects its store to turn a profit in 2023, though this sounds like an optimistic scenario. Furthermore, Epic’s exclusives are not that profitable for the company.

Additionally, EGS has currently more than 160 million registered users and more than 56 million monthly active users.
Lastly, the 12% distribution amount charged by EGS is sufficient to cover the operating costs of EGS.

It will be interesting to see whether EGS will become profitable in 2023. It will also be interesting to see whether Epic will keep signing up new exclusive deals in order to further increase its market share.

 
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Guilty_AI

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I mean, they did make clear they'd be in the red with the store in the beggining.

That said, i've no idea how the store would fare in a profitable manner, aka without all the free games, discount coupons and exclusivity deals. As much as they sing about all the registered and active users, the numbers they showed suggest almost 2/3 of the money they're getting on the store come from v-bucks.
 
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Deleted member 17706

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Crazy if true. I believe Fortnite makes 20 ~ 40 million every month, so it isn't nearly offsetting the losses from EGS when you factor in the wages they need to pay to keep the game running.
 
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regawdless

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Getting into business segments that are already occupied - with extremely strong competition that has been there for a very long time - is expensive and takes time.

No surprise here. But it will be interesting to see how long it'll take until the store becomes profitable.
 
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Deleted member 17706

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Getting into business segments that are already occupied - with extremely strong competition that has been there for a very long time - is expensive and takes time.

No surprise here. But it will be interesting to see how long it'll take until the store becomes profitable.

What's a successful example of buying your way into a space resulting in faster success than starting small but profitable and scaling up? I'm sure there are plenty, but I can't think of one at the moment.
 
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Hugare

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" I believe that Steam should also moneyhat some exclusives and give games for free

EGS strategy is the future, you see? How many new users they've got with this?

Steam should respond somehow, they can't ignore it. "

Hopefuly, some of you guys will see the parallels with some other business models.
 

Guilty_AI

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What's a successful example of buying your way into a space resulting in faster success than starting small but profitable and scaling up? I'm sure there are plenty, but I can't think of one at the moment.
Amazon does it all the time. Also, sony with the original playstation
 

Hendrick's

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With as bad and antiquated as Steam is, you would think somebody could step in with a viable alternative. Everyone seems to struggle for whatever reason.
 
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Lucian

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It's money they can afford to lose and expected to lose when they started out on this thing.
 
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Deleted member 17706

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Amazon does it all the time. Also, sony with the original playstation

What's a good example of Amazon doing it?

Also, how is Sony (or Microsoft for that matter) deciding to enter the console video game business and funding new development projects while providing compelling terms to existing 3rd party developers comparable to EGS? Sony won with PlayStation because their product was more appealing to consumers and developers.
 

Bonfires Down

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What's a successful example of buying your way into a space resulting in faster success than starting small but profitable and scaling up?
How would they do that? Can you mention some features that would get you to switch from Steam to EGS?
 

Skifi28

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After all that preaching about giving more money to devs and how steam and apple are the devil because of 30%, perhaps it's not so easy to be profitable like that.
 

regawdless

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What's a successful example of buying your way into a space resulting in faster success than starting small but profitable and scaling up? I'm sure there are plenty, but I can't think of one at the moment.

There are companies that simply buy other companies to get access to new businesses. That works pretty often.

But the way epic does it here doesn't happen that often. They go into a new space and are basically throwing money at the problem (free games all the time, exclusive games etc.)
 

tsumake

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Dec 3, 2019
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A new court filing has revealed some interesting new details about Epic Games and Epic Games Store...



According to the filling, Epic has lost around $181 million & $273 million on EGS in 2019 and 2020, respectively.
This basically means that Epic Games Store has not been profitable these past two years. Epic expects its store to turn a profit in 2023, though this sounds like an optimistic scenario. Furthermore, Epic’s exclusives are not that profitable for the company.

Additionally, EGS has currently more than 160 million registered users and more than 56 million monthly active users.
Lastly, the 12% distribution amount charged by EGS is sufficient to cover the operating costs of EGS.

It will be interesting to see whether EGS will become profitable in 2023. It will also be interesting to see whether Epic will keep signing up new exclusive deals in order to further increase its market share.


Hey now! I posted this same article on the other EGS thread. How dare you steal my thunder, petty as it is?
 
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Guilty_AI

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What's a good example of Amazon doing it?

Also, how is Sony (or Microsoft for that matter) deciding to enter the console video game business and funding new development projects while providing compelling terms to existing 3rd party developers comparable to EGS? Sony won with PlayStation because their product was more appealing to consumers and developers.
There is a famous story of amazon going nuclear on a (former) popular diapers site.
Also from what i remember, rather than just funding, at the beginning sony would go around developers and closing deals with them. Tekken was like that i think? And tomb raider 2 too i believe.
 
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ZehDon

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Epic is smartly playing the long-game. How do you compete with the behemoth that is Steam? The same way Microsoft decided to complete with Sony and Nintendo with the first Xbox: you spend an un-Godly amount of money to establish yourself and you make it up later on.

When the app isn't like pouring acid in my eye holes, I'm sure I'll enjoy using it and they'll start making money.
 

Three

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This is really bad, how can you have such a poor performing year in 2020 when everything was up by a huge percent thanks to COVID. Insane losses, no way it makes a profit by 2023.
By doing deals with devs for free games to try and grow an install base. A lot of companies are doing that. 😉

EGS has 56 million monthly active users. Not bad, not bad at all. Wonder how they will turn a profit. If it's a cut from microtransactions then that seems wierd considering their idea about the Apple store. Maybe they plan a subscription too.
 
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Deleted member 17706

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How would they do that? Can you mention some features that would get you to switch from Steam to EGS?

No, but if I could, I might try to start my own store and launcher.

GOG managed to be competitive (at least for my money) by offering DRM-free games and actively helping companies make old games playable on modern operating systems.
 

Reindeer

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Makes perfect sense with the way they've been throwing money at exclusives and the fact that many EGS users don't purchase games there. Funding games like what they're doing with Remedy and the guy who made Last Guardian makes way more sense for them going forward instead of throwing crazy cash at temporary exclusivity.
 

xrnzaaas

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This is gonna be an interesting case what changes in the next few years. A lot of gamers are already spoiled by free games and discount coupons, imo it's gonna be difficult to convince them to buy more full priced games. Funding fan favorite projects is a better way to go than pissing people off with the yearly exclusivity deals, but will their games end up profitable?
 
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Deleted member 17706

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This is just the Epic Store not the entire company.

It's a major pillar, though, if they are spending that kind of money. Still, I imagine their primary profits still come from engine licensing.
 

Reindeer

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Funding fan favorite projects is a better way to go than pissing people off with the yearly exclusivity deals, but will their games end up profitable?
Even of they're not profitable, I doubt they will lose anywhere near as much as they're losing with their current business model. Their games don't even need to be profitable, they just need to bring enough people to their platform. It's hard to not see these games at least break even if they put them on the consoles as well.
 
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Concern

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Don't play on pc, so never understood the egs hate. Don't they give developers a bigger share of profits or something like that?

OT: These new business ventures hardly if ever, start off smooth sailing.
 
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Holammer

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You have to spend money to earn money.
I firmly believe Tim Sweeney is fattening EPIC so he can unload his stock, retire and start working on AI research.
 

Sentenza

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With as bad and antiquated as Steam is, you would think somebody could step in with a viable alternative. Everyone seems to struggle for whatever reason.
? They had a complete renew of the interface (which puts them comfortably ahead of pretty much any competition around) barely a year ago and they never stopped adding more features since launch.

In fact ironically enough since the EGS launched Steam added way more new features to its client than Epic did, despise already starting so far ahead.
You sound like you don’t have a clue of what you are talking about.
 

Holammer

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? They had a complete renew of the interface (which puts them comfortably ahead of pretty much any competition around) barely a year ago and they never stopped adding more features since launch.

In fact ironically enough since the EGS launched Steam added way more new features to its client than Epic did, despise already starting so far ahead.
You sound like you don’t have a clue of what you are talking about.


How do you do fellow PC gamers.
 
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Diddy X

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I use it and I like the free stuff but I'd like to see how they do after they run out of candies and stop investing so much money on exclusives, will they be a true rival to Steam?
 

KungFucius

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This is really bad, how can you have such a poor performing year in 2020 when everything was up by a huge percent thanks to COVID. Insane losses, no way it makes a profit by 2023.
That is not how these things work and this thread title is spreading the confusion. If they have a plan to be profitable by 2023 and are on track they are not losing money, they are investing in growth to meet their 2023 goal. How do you know their bottom line wasn't better than planned?

Every PlayStation generation takes a couple of years to turn a profit. Would you call Sony poor performers because they are at a net loss on PS5 6 months and 7 million consoles into the generation?

Now if they don't have a plan and aren't hitting any of the milestones they laid out, then OK blowing hundreds of millions to try to compete with Steam was a bad idea, but if they do start making money and recoup that investment then it was worth it.
 

Denton

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Sweeney is such a strange fellow. On one hand, lowering store cut is nice for developers, and possibly for gamers (developers having more money can result in more/better games).

On the other, instead of investing all of his manpower into making EGS awesome place to buy games at...

he antagonizes the entire PC gamer community by buying up artificially moneyhatted exclusivities...while offering zero added value with the store/launcher itself, whose development is progressing at utterly pathetic, glacial pace.

He could have been an awesome addition to PC gaming, and even new place to unseat Steam. Instead, he just loses money, people pick up moneyhatted free games, and...go back to Steam, which offers actual value.

It's bizzare to me that it is Galyonkin (Steamspy) of all people that runs EGS in this dumb manner.
 
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