On Monday, during the first day of the Epic v. Google legal showdown over app store fees, both companies gave their opening statements and began poking at each other’s witnesses. And during the day, Epic admitted that its digital PC game store still isn’t profitable.
The Epic Games Store launched in late 2018 as a direct competitor to Steam, offering free games to users every month and a more favorable profit split for publishers and devs. The store has continued to grow since its initial launch, adding more features and games, including some exclusive titles (temporarily at least…) only available on the Epic Store and not Steam. During that time, the store has angered some gamers and been a controversial money sink for Epic. And now in 2023, five years after it went live, the store is still failing to make money for the company behind Fortnite and Unreal Engine.
Today, The Verge reported that while on the witness stand during the court proceedings, Epic Games Store boss Steve Allison admitted that the PC store isn’t profitable and said that “growth” was still the company’s main goal.
In 2021, this was Epic’s same argument. During its highly publicized legal fight with Apple over the same in-app fees it’s now suing Google about, Epic CEO Tim Sweeney tweeted that losing more than $300 million on the store was all part of the plan. It was a “fantastic plan” and helped grow the store and its business. Also during that same trial, Epic said its PC store would start turning a profit in 2023.
Now, in the year *checks calendar* 2023, Epic has admitted that its grand plans to spend hundreds of millions of dollars on free games for its users to grow its store at an artificially fast pace didn’t pan out and EGS is still not profitable. And remember, Epic just went through a massive round of layoffs in late September because the company was—as explained by Sweeney—spending more than it made.
It seems that throwing endless stacks of cash into the void in hopes that you’ll start making money one day isn’t a viable strategy for running a massive company. Who would have guessed?