Epic Games Losing Hundreds of Millions (Happily) on Exclusives

Epic Games has been extremely generous in its bid to make a PC gaming store that can compete with Steam, hemorrhaging cash to get exclusive deals on the Epic Games Store and offering developers a very favorable profit split. According to new details reported by PC Gamer, Epic has spent so much the company is actually losing a lot of money — though, if you believe the CEO, this is a worthwhile investment.

The estimate comes from Apple’s summary of findings, which it’s submitting as part of its ongoing legal battle with Epic over antitrust allegations (yes, that’s still going on). It concludes that the Epic Games Store can’t be compared with the App Store, and uses as evidence the fact that the former isn’t profitable. According to Apple’s evidence, “Epic committed $444 million in minimum guarantees for 2020 alone” with “minimum guarantees” being an advance Epic pays the publisher. The document also says, “That includes at least $330 million in unrecouped costs from minimum guarantees alone.”

Epic Games’ own data sort of backs this up, with the 2020 Year in Review saying that players spent $265 million on third-party game sales. Apple concluded in its report that, when you add up all the exclusive deals Epic has made, it has yet to recoup as much as $330 million in minimum guarantees.

Tim Sweeney, Epic’s CEO, was very sanguine about the situation on Twitter, saying, “And it has proven to be a fantastic success in reaching gamers with great games and a fantastic investment into growing the business!” He added in a follow-up tweet, “Apple spins this as ‘losing money’, but spending now in order to build a great, profitable business in the future is exactly what investment is!” Epic also filed its own conclusion document claiming the Store would be profitable by 2023.

Source: PC Gamer