Epic’s commitment to disrupting digital distribution status with the Epic Games Store (EGS) costs the company hundreds of millions of dollars each year.
The court documents filed by Apple before its high-profile clash with Epic indicate the Fortnite the creator lost about $ 181 million in the EGS in 2019 and was projected to lose an additional $ 273 million in the showcase by 2020.
The filing also notes that Epic has pledged $ 444 million in minimum guarantees for 2020 alone and anticipates a further loss of $ 139 million in 2021. Epic had already revealed that PC customers were spending more than $ 700 million on EGS in 2020, of which third games accounted for 37%, to $ 267 million.
While it’s no surprise to see Epic throwing cash at a new store to compete with established powers like Steam, it’s still interesting to see how much the company spends to get exclusive deals and distribute free games monthly.
In fact, Epic itself has acknowledged that the incentives and investments it has made for developers and publishers will result in “unrecovered costs,” but in its own legal filing statements, the market will be profitable in 2023. Apple had suggested that the store would not be profitable until 2027 at the earliest.
“The Epic Games store is not yet profitable in its current scale and development phase because it has frontally charged its marketing and user acquisition costs to gain market share,” Epic said. “The 12% EGS transaction fee is sufficient to cover the variable costs of running EGS, including payment processing, customer service, and bandwidth.”
The latest exchange comes before the two companies go to court on May 3 for Apple’s decision to withdraw it Fortnite of its platforms after Epic breached the App Store guidelines.
Epic claims that Apple has turned the App Store into an “unfair and anti-competitive” monopoly by refusing to let other companies implement third-party payment options. Apple, however, has argued that it has a lot of competition from other showcases that work similarly and, in its most recent presentation, stated that “Epic Games Store is not profitable and is not comparable to the App Store.”
You can view and download the findings proposed by Apple and Epic on Scribd.