In an industry where cutthroat, inhumane competition is considered normal, many scoffed at Epic Games CEO Tim Sweeney when reports confirmed that the Epic Games Store, which offers the most generous developer pay percentages and weekly free games, has run at a loss. Specifically, Epic Games committed $444 million to fund deals, developer incentives and free games in 2020.
In an end-of-year report, Epic Games said they spent approximately $700 million on the Store in 2020, but that game sales only amounted to $265 million. “EGS is not yet profitable at its current scale and stage of development because it has front-loaded its marketing and user acquisition costs to gain market share,” said Sweeney in an internal Epic Game Store filing.
The Epic Games Store went headfirst into a market dominated by Steam, the PC game distributor owned by Valve. Steam boasts more than 60 million daily users and monthly log-ins in the hundred millions. The Epic Games Store launched with both developer and consumer incentives less as a choice, and more as a means of survival.
Epic made a bulk of their portfolio with the massively-successful Fortnite, which still rakes in millions for the company. When signing developers to their store, Epic generally gives developers monetary guarantees meaning that even if a certain game doesn’t sell well on the store, the developer isn’t punished. Also, The Epic store only takes a 12% cut of purchases on their store compared to the industry standard of 30%. This means that developers have a real incentive to host their games on Epic’s platform.
Epic users, also, aren’t out in the cold either. During the 2020 Winter Sale, Epic Games offered users infinite $10-off coupons for any purchase over $15 on top of existing discounts. If a game was on both Steam and the Epic Games Store during the 2020 Winter sales, it was a no-brainer to buy the game on Epic.
If you are a player at all concerned with industry ethics and fair treatment of developers and game creators, consider learning more about Epic Games’ philosophy. No matter how you feel about the platform, for what ever petty reason, recognize that the people who make games are treated better on Epic, and that is incentive enough for me to choose a game on the Epic Store over Steam or GOG.