The competition with Steam is apparently expensive for Epic Games. The company is making immense losses – but President Tim Sweeney is satisfied with the strategy despite the numbers.
In order to compete with Steam, Epic Games is investing astronomical sums in (temporally) exclusive game deals and free gamesoffered on the Epic Store. In the context of the dispute between Apple and Epic, Apple now claims that Epic is using this strategy makes at least 330 million US dollars (about 277 million euros) loss. Epic President Tim Sweeney does not deny this, but is proud of the approach on Twitter.
Epic Games: Expensive Investments in Exclusivity Rights
In 2020 alone, Epic Games paid around 444 million US dollars for so-called “minimum guarantees” – down payments for time-limited exclusive rights with which certain games are only available for one year in the Epic Games Store and not on Steam, for example. In 2019, Epic paid for example, $ 10.45 million solely for the exclusive rights of Control.
In its 2020 annual report, Epic Games states that players have spent the past twelve months Spent approximately $ 700 million on the Epic Games Store have – of which, however, related only $ 265 million on third-party games. This means, on the one hand, that Epic’s own games still account for a large part of the platform’s turnover, but on the other hand, it also means that the “minimum guarantees” paid out could not be recovered by a long way.
While Apple cites these numbers as evidence that the Epic Games Store not expected to be profitable until 2027, Epic President Tim Sweeney referred to the reports on Twitter, sounding anything but concerned, but defending the strategy as a fantastic success:
Epic Games: Free games continue to be part of the concept
While Apple declares the above numbers as losses, Epic Games calls them an investment. The popular free games also fall into this category: While you can usually grab one game per week, you will even get three free games on April 15th: Deponia: The Complete Journey, Ken Follett’s The Pillars Of The Earth, and The First Tree. Despite the newly published figures, Epic does not seem to have any doubts about its own business model.
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