The Epic Games Store's Lack of Profitability Persists Over the Years
Epic Games Store remains unprofitable even after years of operation, as confirmed by Epic Games in a court statement
The Epic Games Store remains unprofitable even after five years in operation, as disclosed during the Epic vs Google trial. Steve Allison, the General Manager and Vice President of Epic Games, testified that the store has not achieved profitability. Nonetheless, Epic remains committed to expanding and growing its PC games storefront.
In December 2018, Epic established its online digital game storefront as a direct competitor to Valve's Steam platform, which held a near-monopoly. To set itself apart, Epic offered game developers a more favorable revenue split, giving them 88% of generated revenue compared to Steam's 70%.
Moreover, Epic pursued the tactic of securing timed exclusives for certain PC games. However, this approach faced mixed reception, partly due to the high costs involved. For instance, Epic paid $146 million to secure a six-month exclusivity period for Borderlands 3, whereas the typical duration is 12 months.
As of 2021, Epic Games CEO Tim Sweeney acknowledged that the storefront had yet to generate profits, and this remains the case in 2023.
Unfortunately, Epic Games laid off more than 800 employees in September. At the time CEO Tim Sweeney said the company had "been spending way more money than we earn."
Editor's P/S
As a passionate gamer, I have mixed feelings about the Epic Games Store's lack of profitability. On the one hand, I appreciate Epic's efforts to challenge Steam's dominance in the PC gaming market. Competition is always good for consumers, as it leads to lower prices and more innovation. On the other hand, I worry that Epic's unsustainable business model could eventually harm the gaming industry.
If Epic continues to lose money, it may be forced to make drastic changes to its store, such as increasing its revenue share with developers or reducing its spending on exclusive games. This could have a negative impact on the entire industry, as it could lead to higher game prices and less choice for consumers.
Ultimately, I believe that Epic needs to find a way to become profitable if it wants to continue to be a major player in the PC gaming market. Otherwise, it risks becoming a cautionary tale of a company that tried to take on Steam and failed.
