Epic Games Is Losing An Absurd Amount Of Money On Exclusive Games
The company appears set to lose around $300 million to pay for Epic Games Store exclusives.
Epic Games seems to understand that, given the lead Steam had and its massive current user-base, the only way it can be a viable competitor is to have games that you can't play on Steam--at least for a period of time. Exclusivity deals with third-party companies cost money, and it looks like Epic Games is losing a huge amount of money to make those exclusives happen. However, Epic Games CEO Tim Sweeney doesn't seem remotely worried about this. In fact, he seems pretty proud of it.
As spotted by PC Gamer, despite paying approximately $444 million for "minimum guarantees" on third-party games for the Epic Games Store in 2020, sales of all third-party games for the year amounted to about $265 million. Apple said that Epic Games lost about $181 million on the Epic Games Store in 2019, putting the total losses thus far at more than $300 million, should these figures be correct. Big games like Metro Exodus and Control were released first on EGS before coming to Steam later. At the time, especially with Metro, the respective game companies were criticized for this decision. Since then, it has become a fairly common practice.
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Apple used these figures in a statement as part of its lawsuit against Epic Games, pointing out that the service is unprofitable and is missing security features that Apple's App Store includes. It pointed out that most of Epic Games' Fortnite revenue is generated on platforms other than iOS, as well, which would seemingly mitigate the effect of the game not being available there anymore.
Epic Games CEO Tim Sweeney doesn't seem worried about the revenue losses in the slightest. He confirmed Apple's estimates on Twitter, pointing out that it's an investment in the business and has been "a fantastic success in reaching gamers with great games."
These loss numbers are still fairly small compared to Epic Games as a whole. The company was valued at more than $17 billion last August after securing additional funding. And despite being unavailable on iOS for months, Fortnite continues to thrive on other platforms.
The Epic Games v. Apple trial kicks off on May 3. The outcome could determine not only if Fortnite can return to Apple devices, but also if Apple can keep a monopoly over digital purchases on its platform.