Epic will lose at least $ 330 million as a result of all these exclusives and free games from Epic Game Store. But on Twitter, Epic CEO Tim Sweeney sees it as an investment and looks surprisingly excited to lose hundreds of millions of dollars.
This information was seen and reported by PC player from new court documents that emerged from the ongoing legal battle between Apple and Epic. While these two big companies are fighting in court, we all have a new view of the financial situation of the Epic Game Store. Not great!
Epic spent $ 444 million on grabbing exclusives and free games for the store. This money was earmarked for a lot of “minimum guarantees” for publishers and developers. These minimums were paid to publishers regardless of whether a game sells well enough to cover it, which is why so many companies hired Epic Game Store. A little guaranteed cash is better than a possible loss. For example, to achieve Control the Epic Game Store as the exclusive Epic paid $ 10.5 million. If we look at Epic’s own 2020 end-of-year report and let’s do some math, we find out that players spent $ 700 million on the Epic Games store in 2020, but the third-party games, for which Epic made offers, only accounted for $ 265 million of that large number. So that comes out millions in advances and lows that Epic has yet to recover. If you include 2019 offers, Apple calculates it in $ 330 million.
According to Apple, in total, including expensive exclusives, free games and all other expenses, Epic Game Store will cost Fortnite developed about $ 600 million in losses by the end of this year and that store will not be profitable until 2027.
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Epic, in a rebuttal, turns this around in a different way. His lawyers explained that all of this is part of the plan. That this is just a big investment (VERY BIG) to grow the store and user base quickly. Epic also claims that even with a 12% reduction in revenue from transactions, the store will start making a profit in 2023.
In response to IGN Reporting on the massive losses, Tim Sweeney looked good, even excited about all the money Epic was losing. “That is correct!” Sweeney said, “And it has proven to be a fantastic success in reaching out to players with fantastic games and a fantastic investment to grow the business.” He also tweeted a great infographic which looked nice, but it also didn’t include the money Epic was losing 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 buy V-Bucks into the game through its own payment system, ignoring the Apple’s system and the usual cut of the phone manufacturer. This is a big no and shortly after doing this, the game was ripped off by both Apple App Store and Google Play Store for Android.
Since then it is it has been a coming and going in the courts between the two companies. Epic says that and other developers should be free to sell their own apps and services on devices like the iPhone without Apple’s involvement. Apple says nah. And so the legal struggle continues.
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