Every week, the Epic Games Store gives out free games. Often fantastic ones but the company has never explained how it has managed to distribute 749 million copies without going broke. Until now, that is. We’re getting our best look yet at how Epic isn’t quite throwing billions of dollars away, thanks to new documents released as part of the legal discovery process for Epic’s huge antitrust lawsuit against Apple, and a series of tweets from Epic CEO Tim Sweeney.
Another argument against supporting #FreeFortnite is "this is just a billion dollar company fighting a trillion dollar company about money". But the fight isn't over Epic wanting a special deal, it's about the basic freedoms of all consumers and developers.
— Tim Sweeney (@TimSweeneyEpic) August 14, 2020
Apple vs Epic
How much is Epic Games Losing
In any case, Epic is losing a substantial chunk of a billion dollars here: $330 million, it appears. According to Apple’s lawsuit petition, “Epic pledged $444 million in minimum guarantees for 2020 alone.” “Minimum guarantees alone cost at least $330 million in unrecovered costs.” However, both of those figures are significantly less than the retail worth of those games, which is $17.5 billion according to Epic CEO Tim Sweeney.
source: The Verge
How is it possible that it is only paying a fraction of a billion for both exclusives and freebies when the free stuff alone should be worth billions? Epic does not pay a charge for each game, much less the full sum, as Sweeney confirmed on April 10th: “Our free game offers are arranged with developers where we pay them an agreed dollar amount, not each copy.”
Why is it that the Epic Games Store doesn’t seem to mind if it loses money?
To answer this and the preceding question, the Epic Games Store is a storefront that is not intended to sell games. It isn’t yet, at least. Sure, some players will spend money in the store, but with the abundance of discounts, coupons, and simply free games, the chances of a player paying full price for a title is low when compared to other stores. Of course, framing it in this manner assumes a few things. The first and most obvious assumption is that It urgently requires the funds. With Tencent’s support, Its $450 million loss is a drop in the ocean for one of the world’s largest firms.
In fact, Epic Games’ CEO is North Carolina’s wealthiest man. Facts like these should demonstrate that Epic isn’t exactly short of cash. Tim Sweenwy, the company’s CEO, sees the Epic Games Store’s losses as an investment.
Bringing up The Epic Games Store
Right now, the store’s sole purpose is to develop a passionate, involved fanbase that will purchase games in the future. Epic still has some catching up to do if it wants to compete with Steam for the top spot as a PC marketplace. This is most likely why the Epic Games Store throws away so many games for such a low price.