> "We're spending significantly more than we're making, and we have to make major cuts to keep the company funded," he said.
Sorry, HOW?!?
How can a company like Epic games with one of the most successful gaming products of the last few decades be losing money with a product that is so mature? Almost every other games developer would love to be in their position on Fortnite but they've somehow turned that into a loss making proposition?!? I'm baffled.
They aren't losing money on Fortnite, they're losing money on vanity projects like the Epic Game Store where they spend tens of millions of dollars for exclusivity deals with developers, and give away free games to try to poach Steam users with an otherwise inferior product. Unfortunately it is their employees that are paying the price of leadership making it rain with their overflowing coffers they couldn't help but burn.
It's still funny to me that they would rather burn 9 figures in cash on these silly deals to try and 'trap' gamers on their platform instead of just... I don't know... making a better platform? The reason nobody competes with Steam is simply the sheer number of integration and platform features that make it easy to buy, play and share games with my friends. It's not that hard, stop trying to 'force' me to use your platform. Just make it a nice experience.
> The reason nobody competes with Steam is simply the sheer number of integration and platform features that make it easy to buy, play and share games with my friends.
I don't agree. The reason I personally prefer Steam is that all my existing games are on Steam so if I keep buying on Steam I don't have to make and maintain accounts on other stores, if I keep buying my games on Steam I can keep using Steam as my only game launcher, and all my friends are on Steam so games with Steam multiplayer integration are easier to play if I too play it through Steam.
The Epic Games Store client and game integration could be significantly better from a technical perspective in every possible way, and I would not be interested in moving to it. Steam is good enough and switching has a massive cost. I can't really imagine much that would make me use the Epic Games Store other than exclusivity or the promise of free games. Though I would be more likely to just not play a particular game if it's only available through the Epic Games Store.
Another big thing is trust. With any of these digital markets I'm not truly buying games, I'm purchasing a revocable license. That requires a certain amount of trust that the platform isn't going to screw me over.
Steam isn't perfect: they initially had to be forced to offer refunds, and their item economy enables barely disguised gambling. But by and large they have behaved very predictably and consumer-friendly. Sometimes by outright consumer-friendly policies like generous refunds or labeling games with AI assets. But usually by just not doing anything greedy. Or as the meme goes: "Gabe does nothing. wins."
I agree. No company is perfect, but if someone asked me to name the most consumer-friendly large tech company, I'd say Valve. And honestly, I can't think of a second one.
I'm normally firmly against piracy, because I believe it to be morally equivalent to theft and I want to fund the artists making stuff I enjoy. But if Valve shreds my purchases when Gabe dies or retires, I will hoist the black flag on those games and not feel an ounce of guilt. As the saying says: if buying isn't owning, then piracy isn't stealing.
But we'll see. I hope it doesn't come to that. That said, I'm trying to change my purchase habits over to GOG because even if Gabe's successor doesn't screw over the Steam customers, eventually someone will. With GOG there's no possibility of the games I pay for being taken away from me.
They have shown its a wildly successful model. They would be very crazy if they changed it, and it would make them vulnerable to Epic and the Windows store. It's more likely that your OS/ hardware will change in a way that isn't supported by an old game.
Unfortunately, "this is a wildly successful model that prints money for us with almost no upkeep required" has historically not been a bulletproof argument when new management comes in and wants to prove themselves. Human beings are not necessarily rational and the kinds of people that tend to rise to the top of large corporations don't necessarily have the best interests of customers or the business itself in mind.
That being said, I believe that Gabe is taking his "succession planning" seriously, so I'd be fairly optimistic for the next decade at least.
One thing to keep in mind is that Valve is fully private so Gabe can not just be replaced by some random person by a board of directors like in other companies.
He probably already has a will set up that details how ownership should be transferred.
It is, but I'm not sure why that's relevant? xdertz's point wasn't, "Valve is private and therefore it engages in ethical consumer practices"; the point was "Valve engages in relatively ethical practices and because it's private, the board can't replace Gabe with a CEO who would engage in more unethical practices".
Not sure if this is relevant, but I have read reports[1] that Tencent currently holds a 28% stake in Epic Games. So private, but with unknown levels of ownership.
I've rebought games on Steam I had on Epic for free, just because the platform is so terrible. As far as a metric goes, that's pretty clear.
It's definitely not about lock-in for me. It's everything from local streaming, to linux support, to cloud saving working properly, to 100s of other things that become apparent if you try to do anything other than launch a game in a bog standard way on a windows machine.
Same. Sometimes I will play a givewayway game on EGS and like it enough to e.g. buy the DLC. In that case I'll buy the game on Steam, just to buy the DLC there too.
I have the EGS with games on it me and my kids actively play. I don't resent EGS for exclusivity deals nor hold any other kind of grudge towards them. If a game I want comes out first on EGS, I'll buy it on EGS. I don't actively play with friends, so who is or is not on EGS to play with is barely a factor on my radar.
I still prefer to buy on Steam if I can, because using the EGS sucks in every way possible compared to using Steam. If I want to sit to rest I can do it on a cold and irregular rock, but if there's a bench right next to it, then I'll use the bench.
That said, you can do a lot worse than EGS. MS Store I'm looking at you. In the above metaphor, you'd like sitting on the wet and muddy ground.
The big one for me is linux support, followed by steam input remapping. Input remapping, turbo, combo / chord buttons is incredibly important for accessibility.
agreed, the epic games store is crappy enough that i will not use it even for free and/or exclusive games. I might have if it was marketed as a clean, unobtrusive experience, but we all know that will never happen.
It makes sense that those with huge libraries may never want to move. But there are many existing and future PC gamers who do not have particularly large libraries on Steam, who would likely be much easier to lure if Epic actually made their launcher worth it.
The ideal number of app stores I want installed on my computer is ZERO. I don't want to have to load a damn "store" just to obtain and run your game. I am willing to angrily live with ONE store on my computer, Steam, but no way in hell am I going to tolerate having to have an Epic Store and a Microsoft Store and an Activision Store and a goddamn Rockstar Store and an Ubi Store and a fucking Adobe store for Photoshop. I don't want to have to install store after store for each damn app developer on my computer, yet that's the way the industry seems to be headed.
I don't know why "zero" is ideal. That means going back to the old days where every single company would need their own launcher.
Having a separate company focus on distribution sounds more ideal.
Epic Games had an opportunity here to erode the app store margins through standardization, instead, they've become a copycat of what they resented with a slightly smaller cut.
Just install the damn game, ask if you want icons on the desktop as well as in the start menu.
OS handles it all for you.
Perhaps some multiplayer functionality and such makes sense to share cross-game, but I miss the bad old days of every game having a bunch of privately maintained servers and its own server browser list etc. You could eventually find a few servers that fit your playstyle and make online gamer friends that way.
The only benefit steam brings to the table as far as I can tell is making it easy to reinstall your library on a fresh PC.
Yea, that's another way games are terrible today. I don't want a launcher for my game. My OS is my launcher. I don't want a launcher, I don't want a store, I don't want a "helper," I don't want a tray icon, I don't want an updater. Why can't game companies just ship their game and that's it?
I mostly play games on a computer in my living room. It boots into Steam Big Picture, which I use to launch a game (or sometimes buy new games) using an xbox controller.
But other platforms really are rather pathetic in terms of feature set compared to Steam. Steam has a bajillion features, and it looks like other platforms aren't even trying to compete to provide a good user experience.
It's truly incredible how difficult business people make doing business.
Doing business is very simple, easy, and straightforward, but I suspect in a lot of cases the individual behavioral aspects of the executives get in the way of doing good business.
Direction and leadership is something that these companies never seem to get right.
Well, we might make it a nice experience until we've attracted enough of you people to have a network affect. And then it's a steady march of price increases, additional revenue streams (including selling your data!) and reduction in features because they were "too expensive to maintain"
Steam does. That's why they're the undefeated king.
This applies to everything. If you see a product category where users are legitimately unhappy; then enter it, build something actually good, you'll be the biggest and richest in no-time.
People hated steam when it launched but you needed it to play CS 1.6. It made installing mods easier. Then HL2 released, orange box, and they were able to get a critical mass as they provided platforms support for other games. Steam got better. It’s still not great but they have so much market share that basically any PC gamer already has it. Epic wants some of that money. The problem is nobody wants to install another store and they aren’t doing anything to improve gamer’s experience other than giving away games and having some exclusives. They’ll never hit the critical mass needed that way.
I still don't like Steam. I resent that I have to have this "Store" middle man on my computer just to have access to games. I want to pay a company for their product on their web site, download the installer, and install it on my operating system directly. I don't want this other layer that I'm dependent on, who could switch off my access to the things I "bought" whenever they want.
Steam has multiplayer integration so you don't have to connect by IP to play indie games, that is massive. So many people either don't have access to their router or don't have the skills to configure it to play multiplayer without steam without having a server middleman which most indie games wont have.
Then steam reviews are the most accurate reviews there are for how likely you are to be happy with the purchase. I am much more hesitant to spend money on a game where I can't see the steam reviews for, so there is basically no way I'll buy a game on epic store that doesn't exist on steam since I am basically buying it blind.
Looking at what many of your games do I think it is better option. I have zero doubt that there wouldn't be countless downloaders and accounts and poorly written startup menus for each game and each publisher both big and small.
Simply getting installer would not be option for most games.
I vaguely recall Half-Life 2's launch being pretty problematic.
I started using Steam in 2007 and it was fine. In 2006 there was still some residual animosity towards it but I think the tide had well and truly turned since the early days (and I think there were a handful of third party games on it by then too which I guess was something of a vote of confidence - a few were Source engine titles so they may have got a discount or kick-back from Valve, but not all were).
> People hated steam when it launched but you needed it to play CS 1.6.
I thought CSS was the first release on steam beta? I remember playing the crap out of it, then the actual steam release happened, and it somehow turned into a laggy buggy hunk of crap for months.
Not sure of the exact history but pretty sure Steam was launched as a beta in 2002, or maybe 2003. In September 2003 or so the database was wiped and Steam was launched, again with probably only Counter-Strike available.
Counter-Strike Source was launched some time in 2004 and then Half-Life 2 came along in November 2004.
I mean, people really didn't hate it. There was some grumbling about digital and not having a cd, but by and large people liked it as soon as they had broadband.
Steam has a lot of issues but there are too just lots of areas where better products don't win out over inferior products, that's just not how the world works for lots of reasons.
Updating games on HDDs on Steam takes ages; I often see the download complete but then wait another 30 minutes for their diff to complete; and that happens with 10-20 games every week when they have big updates (10GB+). Just for this one thing I would switch elsewhere.
If Valve started to routinely do Bad Things on Steam they'd be gone pretty quickly. Many would go to GoG, some just stop buying games. Bad Things do occasionally happen (bad things like those "oops, we don't actually have licenses for the music used in the game you bought" revokes), but Valve keeps succeeding in keeping it to a rather low background noise level. Competitors have two decades of being that good or better to catch up. You can't buy trust, you can just put money into not losing any of the trust that grew over time. When competitors have done that for two decades, Valve, unless they fail in the meantime, will have even more.
I heard the same thing for Discord last month, and reddit and Twitter a few years back. It kind of worked for Twitter due to be outstandiningly bad, but it still didn't "kill" Twitter in the colloquial sense.
I don't see it going down any differently with Steam. It may take a dent and open up a competitor, but it won't do a move so catastrophic that it losses its leader status from that alone.
Which of them are privately owned? In a publicly traded company, there's an inherent logic that people who believe that the company can get by with squeezing customers a little harder will end up with higher projections than those who think it's better to get by with a moderate approach. Price goes up with the bids from the squeezers and occasionally a moderate will sell until eventually the squeezers own an identity-defining fraction. Valve only is what it is because of the ownership structure, its closeness to being bootstrapped (I assume that in reality ownership is a little more complicated, but close enough)
We could also call those squeezers "optimists", and publicly traded implies ownership by the most optimistic (well, the most optimistic who have money to invest). Leading to behavior patterns that could be described as suicidally chasing the most unrealistic money making projections. (and founder majority stakes are surprisingly susceptible to falling in line with those optimists, because those owners still don't want to see their valuation going down, doubly so of they ever started borrowing against their stakes)
"pretty quickly" is a few years, not one month. Chrome dominated the browser market pretty quickly even though the richer bigger company microsoft already had most of the browser marketshare, and that was 3 years. Before those 3 years it seemed like nobody would be able to make a dent in microsofts monopoly, and then it was gone in just 3 years.
If steams fumbles as hard as microsoft did with internet explorer they too could be mostly gone in 3 years, replaced by a giant competitors product.
The Reddit blackout is coming on 3 years old now. The twitter kerfuffle is almost 4? I'm not holding my breath.
And yes, chrome is a great example. That came right on the legs of Microsoft losing an anti trust case. For something that seems so quaint in 2026. I miss when regulations had teeth.
> If you see a product category where users are legitimately unhappy; then enter it, build something actually good, you'll be the biggest and richest in no-time.
> It's not that hard, stop trying to 'force' me to use your platform. Just make it a nice experience.
I feel like this is good advice, and should still be a pillar of building a business: prioritize customer satisfaction, and your happy customers will become repeat customers. But I don't think it's enough. Epic tried to launch a store in 2018, 15 years after the launch of Steam. That's 15 years of customers buying their games on steam, building a friends list, and getting used to making Steam their PC gaming "home." How do you convince someone who might have hundreds of games tied to one online account, that it is in their interest to open a new online account with a new merchant and start over from scratch? Your experience can't just be nicer, it needs to have some level of appeal that convinces customers to peel themselves away from whatever platform is their current default.
I don't have a good answer for how to accomplish this. Epic tried it by paying devs for exclusives and freebies, litigation, and a PR campaign that Valve and Apple and Google were ripping people off. Their approach was hostile and didn't prioritize making a nice experience, and it seems to have failed. But I think these platforms are sticker than we give them credit for, and just making a nice experience isn't enough.
15 years is not some insane gap that you can't get around. The biggest issue is that the EGS is just an inferior experience compared to steam, that's simply it.
If Epic games really wanted to start eating away at steams market share, they would do one thing. Make EGS not shitty for the user
15 years is a humongous gap. Almost an entire generation. Do you expect to make a Facebook killer in 2022? A WOW killer in 2017? Make a DOTA killer right now?
There's so many people who aren't even your market, they are an "one game player". You can't target that realistically unless that one game shits the bed.
Roblox is in some ways there, I think Epic thought fortnite could have competed. IMO they made a strategic mistake in shackling their game-as-a-platform to Fortnite. I thought the music fortnite thing looked interesting, but I have negative interest in installing Fortnite.
Call it something else and make it literally the first thing you see on epicgames.com, have it work on mobile, and maybe things would be different today.
(Aside: Roblox wins because I can go from typing in roblox.com into my browser and be playing a game with a friend in under 20s)
Instagram was a Facebook killer until Facebook bought it.
Snapchat was a Facebook killer until Facebook bought a VPN service and tracked every user without consent then stole half its features
I guess you could say LoL is a DOTA killer since its significantly more popular now, although some of that is likely to do with the Russian/Ukraine war
Giving actual compelling reasons to get users on your platform is the only way and the best way and that isn't really a function of time. TeamSpeak, Ventrilo and Mumble got eaten up by Discord and also most game forums
One of the biggest issues with all these stores that are other than steam is that they suck in terms of UI/UX and they are HUGE resource hogs, I am more inclined to kill off the epic games launcher from running in the background because it taking up gigabytes of my system memory and that annoys me
Steams's UI is also meh and is also a resource hog. There's a good reason I don't keep any launcher running at startup.
>Giving actual compelling reasons to get users on your platform is the only way
And sometimes there is no compelling reason. People may only want 1 or 2 things and they bias towards what they are familiar with.i suspect that's why Twitter is still technically a market leader (despite falling apart behind the scenes).
I also think it's really funny that talk about offering a good platform then mention an example where the market leader just gobbles them up.
> How do you convince someone who might have hundreds of games tied to one online account, that it is in their interest to open a new online account with a new merchant and start over from scratch?
I haven't play a PC game in a long time, so don't have any experience with the modern game stores and playing downloadable games.
I understand that these stores are more than just places to buy games--they also include extensive social media aspects.
But surely you don't have to give up one store if you make another account on another store? If you are on Steam and have a large friends list there and want to try a game that is only on some other PC game store couldn't you send a message to your Steam friends saying you are going to try that other game and asking if anyone else wants to come play with you?
If you meet people in that new game and want to be online friends, just point them to your Steam account and say that's your main gaming social media site, or point them to some non-gaming social media if you actively use any and they aren't also on Steam.
Freebies and discounts helps get people in the door. Having an experience that people don't hate might keep them there.
I don't buy a lot of games, but when I do, I don't usually look at Epic. I'd rather buy on GOG or Steam. Steam is probably from inertia, but if Epic provided a better than Steam experience on the games I've gotten for free, than I might consider it. I don't really know what would qualify as better than steam though... maybe faster startup, less dumb prompts?
I don't even consider buying games on the Microsoft store though, so Epic has a leg up --- if it's sale season, I will look to see if Epic has a bigger sale than Steam.
Why does anyone need to make a store? Walmart and Target both exist. Generally, consumer choice and industry competition are considered good things that drive innovation and the nicer experiences we're talking about.
The litigation angle to legitmatize a mobile storefront was smart. Having a company able to offer premium mobile games with a proven track record could have had it stand out from Steam, or at least open on an untapped market.
But it seems that gamble slowed as the economy did. Worse yet, China and Korea have gotten much more attractive to get people into their casinos. Competition is stiffer than ever.
One of the more fascinating parts of the Xbox plan of attack for its new console is its apparent marriage of Xbox, Steam, and Epic among possibly others in a unified console experience. Having a true console like experience with a variety of PC game stores plugged in I think is a rare lane available for Xbox to try and do something other than reproduce Steam but worse, and I'm curious how it's going to go.
This being microsoft, my expectation UX wise is that similar to those Xbox ROG devices you'll have to drop to the windows desktop to install updates, and they'll probably also throw in some copilot to help you through the process. I don't think they have it in them to innovate here and make it pleasant in any meaningful way
Yeah, I agree. There are certainly engineers at Microsoft who are skilled/talented enough to do something cool. But it doesn't matter if the business people will just saddle them with bad requirements that drag the experience down.
My guess is it doesn't go well -- with Gamepass they've taught Xbox gamers not to buy games, and with Steam integration they've given Xbox gamers a competing place to buy games (where Microsoft will pay a percentage to steam!)
It'll probably turn a division of Microsoft that usually loses money into one that loses...more money.
Right and itch.io and much besides. However, these integrations are janky and not built in as first class console experiences. Not that they need to be necessarily, I think having the steam store is enough in many respects. But for me, the dream is being able to browse and install games from itch.io with the same convenience as steam itself. So there's at least notionally and unclaimed lane for providing that kind of experience. It's the only available Lane that I can think of for out-Steaming Steam.
You're not wrong, at this hour success is as much about picking up the pieces from one of the singularly worst disasters of brand confusion we've ever seen. Even this attempted recovery is a bid to get into the lane now owned by Steam.
The SteamOS is capable of getting out of the way, which is something Microsoft is pathologically incapable of designing Windows to do. And these days I think Linux and the Linux desktop are just objectively better than Windows, and the days where Windows embodied what it meant to have when anything goes PC are long gone.
So you're left with limited options. I think a first class console experience for a wide range of storefronts is the best bet to out-steam Steam but it assumes a degree of execution capability that I don't trust Microsoft to have.
As much as I love steam, some of this isn't even a high bar. I've always had issues with stuff loading slow or odd behavior on the steam store tab in the application. My understanding is it's because the store tab in the steam application is essentially a web browser, and it sorta works like ass.
I like having a huge library of games on epic-store but when I try to buy a game there - because they're having a sale - its a pain to find games. Steam's search isn't top-notch either, but its 1000x better than epic's.
For example. I search for "roguelike" and it brings up 1 single game (which is coming soon). There are few tags on games. No way to refine a search. In fact they have a category called "rogue-like" which has a lot of games, but somehow the search just misses them. There's no way to refine results by popularity or most sales.
I suspect this is all an intentional design philosophy of epic, a way to have a lot more control over what the user sees than steam, because its so bad it doesn't make any other sense.
Also for some reason their store takes a LOT longer to load than steam.
The game library UI is much worse. Pretty sure there's no easy way to mod games through the epic store or see dev updates or talk on a forum or submit bugs. Just so bad.
I can't help thinking the battle was lost before it even started, no matter how good the offering was because the PC and mobile platforms (where epic operate their store) have 99.9% already decided who owns them. The way I see it Epic wanted to copy what Counter-strike and HL2 was to Steam, but using Fortnite to push their store for a fresh generation of gamers. The problem is they couldn't replace or exist alongside the incumbents while trying to bring in more than a trivial amount of income. The only way I can see the outcome being different is if they were in the position Valve were in around 25 years ago with a fresh or poorly served market or something other than video games, few remember Stardock Desktop as a place they got their games.
Epic games goes out of their way to be hostile to Linux users. I'm at the point where I just ignore windows only games. And I'm the exact type of person they'd want to convert cause I tell all my friends about my gaming experiences. They could even take proton and use it in their store.
This is basically my opinion as well. There are enough games that run on Linux that I don't have time to play them all, so if the game is windows only I skip it.
The steam chat app is kind of terrible and there was a Linux UI bug that caused UI lag a few years ago. Epic Games just can't replicate the goodwill.
They could totally carve their niche if they focused in making their store better.
Could it surpass Steam? Probably not. But you don't need to surpass Steam to have a viable, profitable store. GoG is the alternative that proves the rule - it is smaller, but they have their niche offering.
EGS is shit, and relied on exclusives (which everyone typically hates, especially on PC).
IIRC GoG has a pretty poor history in actually turning a profit with the exception of when CD Projekt release on of their own games, and even then they do the vast majority of their business on steam or the console stores. If GoG was a decent money-spinner then CP projekt wouldn't have split if off. Even a niche has a cost to operate, and that's with GoG being a pretty plain service on top of game downloads.
I think sweeny is an awful person overall. The lawsuit against apple and google is a net positive for consumers though. Having someone as big as Epic stand up to these digital silos is a good thing.
Assume for one moment that they were all great people over there.
I suspect that they would STILL be in the same boat that they are in. You see a silo where I see a service provider.
Does apple make money on doing what they do.. You bet.
But the lesson here is that they make that money because of scale, and without it replacing payment processing, fraud management, and the customer service you need with it is a HARD problem. Epic needs more than Fortnite to justify running all that on their own or it's going to turn into a black hole: because payment processing for "digital goods" is a nightmare.
I suspect that both apple and googles extension into payments at point of sale, has contractual ties to their App Store payment processing. Something Epic will always lack.
The real pain in the ass here is the incumbent card processors, and their fee structures.
I suspect that the industry is going to need to go back and re-visit micro transactions in the coming years.
I think he's still at heart a developer. That's why all his initiatives that aren't Fortnite are so developer friendly.
But he still is a CEO. So there will naturally be some evils he seeps into to make the company (and himself) richer. He still has his own interests, but my second hand experience is that even these layoffs are relatively respectful compared to most of the industry.
I recognize that CEO side. But it's a real shame many people mostly turned on him in order to defend Steam. Steam sure isn't a saint either.
Steam is actually not that good as an application. It’s slow, it’s full of ads, the UI is complex …
But they are the Amazon of gaming : it’s a no brainer to buy games because you know you won’t get issues being reimbursed if it’s needed. Also SteamOS/Proton/Steam Deck are nice.
And EPIC managed to do worse than that.
I do feel GOG Galaxy could become a threat to Steam someday if they added official Linux support and a full screen version but last time I tried it it was pretty buggy.
Not only does Epic refuse to make their game store any better, Tim Sweeney will continue to whine about how Steam's 30% cut is way too much. Surely if it's too much, Epic Games should be able to provide the same service for their cut? But no, they continue selling a moped while saying how all of the motorcycle manufacturers are ripping you off.
And lets not forget Tim Sweeney's dishonest representation. Sure, Steam can take a 30% cut, but they also offer a lot of avenues to avoid that. With Steam, a publisher can get a ton of activation codes and sell those activation codes on their site and not get hit with the 30% cut. No fee on in-game transactions, and as you build a user base for your games, Steam also lowers the 30%.
Network effects disagree, sadly. You don't get market share from the leader by simply "being better". There's way better netowkrs than Facebook, Twitter, and Reddit out there. But some habits are as harder to break than they were to form.
I don't disagree with what you're saying. But for technical platforms it needs to be a combination of both. Discord is the perfect example of this, plenty of people I know of were completely fine with their Mumble/Teamspeak/Ventrilo setups, and in a lot of cases some of those were better than what Discord was offering for individual features, but the overall feature set and platform ease-of-use that Discord was offering drew in a large initial user base which then created the network effect you describe. A lot of my friends feel 'locked in' to Discord now and with their age verification roll out fiasco a lot of people want to leave, but there isn't a single offering that matches Discord's platform features and integrations. There definitely needs to be an incentive to leave sometimes and break away from that network effect, but if there's no actual competition then obviously yeah you're always going to be stuck.
Let me make a disclaimer, I don't if it is true as CEO speech truthfulness seems to be made by ai.
But once I saw the interview with the guy from epic or someone big there, I don't remember and they said the money for developers was from marketing campaigns which makes sense to me. They said that they wanted to make a better experience so the developers themselves would try to help being people to the platform but that never happened.
It seems that the technology behind the epic store is, epically broken, pun intended. I've read somewhere that they tried to decouple chunks of the store and restart but the thing was so poorly done that it would be more expensive than just let it fade away and at some point they had a new epic store 2 created from scratch but to develop it to the end would be too expensive.
As a swe myself, maybe they were trying to scale to steam level before being steam? I don't know.
My last experience trying to use epic was trying to buy a game. But being greeted by a store login, then a loader of a store then a initial store that tried very hard to sell me call of duty and EA stuff. I found whatever I was trying to buy but I couldn't due to some bug in the payment.
And never again. Not for any particular reason. I just didn't spend more time there.
And now, with these layoffs what are they going to do? Are they revoke all the licenses for the games they gave and sold?
I don't care about my Steam profile. I do care about the convenience of having all games in a single "launcher" and seamless Linux compatibility through Proton.
A big reason it feels like nobody competes with steam is that if you want to sell your game on steam it can't be cheaper elsewhere. So any other store can't compete on price.
If you don't sell your game on steam you are missing 90% of the market. So as long as Valve continue to make steam good enough, nobody has an incentive to switch.
It's an abusive monopoly. Steam take 30% of revenue from developers and Epic take 12%, but the prices can't be 18% cheaper for the consumer without giving up 90% of the market!
Are you seriously blaming Steam for game developers setting the price of their games the same on all platforms? They're the ones pocketing that 18% difference by the way and that 18% difference is literally the selling point that is supposed to lure in game developers to the epic games store. There has never been a promise of cheaper games.
The "most favored nation" pricing you're complaining about being abusive refers to Steam key sales on third party platforms and that pricing exists for a blatantly obvious reason. How much of a percentage does Valve get from that sale? 0%. Absolutely nothing. The developer generated keys are free and Valve will still pay the distribution costs (storefront, downloads, multiplayer, etc) for you. If it was possible to sell a Steam key cheaper on another platform, then nobody would buy Steam keys from the Steam store anymore, which means their revenue would tank to zero, which in turn means they would have to cancel free steam key generation, duh. Valve is being extremely accommodating here and you're twisting it into its opposite, which is pretty disgusting.
The problem is the Steam Distribution Agreement isn't public so I don't have a way to prove if this is true or false.
At the same time there are articles like this https://www.bbc.co.uk/news/articles/cx2g1md0l23o on the bbc claiming a tribunal ruled a case can continue against Valve for "forcing game publishers to sign up to conditions which prevents them from selling their titles earlier or for less on rival platforms".
> Unfortunately it is their employees that are paying the price of leadership making it rain [...]
Epic's employees reaped the gains while it rained in the form of paychecks. While it sucks that people are losing their jobs, those individuals received (much of) the upside of this investment and their jobs never would have existed in the first place had the investment not been made. Their paychecks are not being clawed back. Shareholders (including executives who are largely paid via out-of-the money options) are bearing the costs. Consumers also benefit from increased competitive pressure on Valve and subsidized game prices.
Would it be "better" if Epic had not invested in the Epic Game Store and paid a dividend or conducted a share buyback?
For what it’s worth, Epic is a private company and employee upside has been capped in the sense that compensation has been mostly cash (and not Netflix tier cash). Exposure to equity may been a better way to share in upside and ensure some buy-in.
IMO investing in a marketplace was fine, but hemorrhaging money for 7 years on non-performant software + free game bundles is probably not defensible from an executive standpoint.
In my experience the buy-in you get from employee stock programs scales inversely with the head count. I worked for a huge company that gave out stock options. Nobody was really motivated by the stocks, because the company was so large your individual contribution meant exactly nothing unless you were at least a VP. A vesting bonus of some kind would have done just as much.
In my experience, the Epic Games Store downloads faster, installs more efficiently, and launches games faster than Steam. The social features I actually use (i.e., add a friend, join them in a game) work fine. I'm not aware of any features Steam has that EGS lacks that I actually use frequently (Valve's VR, streaming tech, and Proton are great, but I don't use those frequently). It's not just me, many indie game developers are also big fans of EGS (most recent example that comes to mind are Jeff Kaplan's remarks during his 10 hour stream a week or two ago). Gamers' vehement defense of what is effectively a monopoly continues to confuse me.
Nearly every time I add the free EGS games to my cart the checkout fails. I frequently have to restart the EGS client for checkout to work (and even then it fails often).
I launched EGS just now to time some comparisons and it's a black rectangle on my screen with no GUI (probably self-updating). I had to kill the process and restart it.
The Look and Feel for the EGS client just feels slow. Not that Steam is always amazing in this regard either but it's way better than EGS. Go to your EGS library and click between "favorites" and "all games". Switching from favorites to all games takes me ~4 seconds, every time (if you have any meaningful number of games).
The search/sort is slow. Steam's feels instant.
The library list has a ton of wasted space. In terms of vertical space, the Steam library lists three games for every game EGS lists.
The EGS social features compared to Steam are downright anemic (and Steam is pretty bad compared to something like Discord). You can't even set an avatar in EGS. Even EA's Store app (whatever they call Origin now) lets you do that.
One thing that steam does better than any other place is create an incredible store experience to sell games on. I don't think any other game distributor has an algorithm as good as theirs, and all the integrations and hookups that come with it. For example, Nintendo's shop page for each game is sparse in detail and lacks so much information buyers have access to in that game's Steam page counterpart. The store search and other store views display games far more efficiently than nintendo's search and store views, making it much easier to find what you're looking for in fewer clicks and fewer minutes.
if you have the time, try to find a game on nintendo vs on steam. Don't google for the pages, go to their base shop page and start from there. Try to avoid directly searching the title, instead search for keywords as if you're a gamer trying to recall a game suggestion you heard from a friend like 2 weeks ago. You'll notice the plethora of differences that combined puts steam on a whole other level of sales and content distribution if you go about it like that
They could at the very least just package it up to run with Wine, but Sweeney is stubbornly set in his linux hating ways. I could use their store through the Heroic launcher, as I do with GoG, but I won't because fuck you Tim.
If we're being realistic from a business standpoint: Linux is at best, 3% market share. A very passionate 3%, but 3%. Using resources to support such a niche sector is a hard sell.
3% of millions of people is a massive number of people. Given how easy recent work on wine has made porting from windows, it's really hard to defend not having a linux version, from a business standpoint.
I'd hope this community of all places would understand that "just integrate X with Y" is never as simple as "just". It's still something a team needs to do, and the gain is minimal unless Epic is also going to try and make their own console-esque device. That's the incentive for Steam.
Going by the Steam hardware survey, 3/4 of Linux users were not using Steam Decks when they got polled. So I’m not sure if a console-esque device is actually required. A large part of the reason why Linux usage is growing, is probably that it mostly just works these days
Yes, it's not the most optimal business decision as a software company to invest in hardware. The clear move is to either grease Microsoft's palms, or let then outright acquire Steam (or Valve as a whole). Valve not doing that is either in part ideological, or part very long term thinking on the best financial path later, instead of now.
But at the same time: while the ends was "be independent from Microsoft", their means at first was very Microsoft esque. Partner up with hardware vendors, make some Pcs with Steam built in, and brand it as such. Didn't work. Their goal had to be to roll their own hardware because that's what was needed to get the ball rolling (as well as a form factor that accompanied a desktop instead of competed against).
The problem for an also-ran app store is that you need every user you can find.
Linux support may not be a huge deal in the overall market (although it's growing due to the steam os devices) but it's just one more element to Steam's moat.
It's a glorified wrapper around curl, wine and a webview, a few interns could knock this out in a few months. For "3% market share" (growing every day, thanks to Valve) its a no brainer, but Sweeney has no brain.
How is steam a monopoly? People would be excited for EGS just like they are for GoG, except EGS has a track record of anticonsumer behavior.
I fear for valve in a post gaben world, and they certainly aren't blameless. They also aren't a monopoly. Hell, steamOS is the opposite of a locked ecosystem.
It has 90% marketshare and has been shown to use its monopoly uncompetitively to force price parity on devs. Textbook definition.
>People would be excited for EGS just like they are for GoG,
People "like" GOG. I woildnt say they are "excited for it". The revenue of GOG these years don't reflect the supposed enthusiasm.
>EGS has a track record of anticonsumer behavior.
Anticonsumer isn't anti competitive. Especially not as a new player in the game. They can't brute force this stuff with money like a trillion dollar company could.
> Hell, steamOS is the opposite of a locked ecosystem.
I'll believe that when they release a full distro with all the feature the Steam Deck enjoys.
> Gamers' vehement defense of what is effectively a monopoly continues to confuse me.
It is a monopoly but that can be a good thing sometimes. Steam is really good! Is it 30% cut good? Maybe not but I do think Valve has managed to keep Steam good for a very long time and if they lose their monopoly they're going to have a strong incentive to fuck things up.
Another example is WhatsApp. Sure, sucks for Google and Apple that WhatsApp have a watertight monopoly in most of Europe (and probably much of the rest of the world; I haven't checked). But it's pretty great for actually users. We've had at least a decade of totally free messaging that everyone has with no ads and e2e encryption.
Meta are just about starting to fuck it up but it's been a pretty great run.
People are generally okay with monopolies as long as they feel they're benefiting from the monopoly instead of being taken advantage of.
Epic garnered a lot of ill will with all the early exclusives. If I have part 1 and part 2 of some franchise on Steam, and then part 3 comes out as an Epic exclusive, it's going to irritate me.
In my experience, the Epic downloader would frequently lead to degraded performance and/or system instability when I'd leave it running; I've never noticed such problems at all with the Steam client.
That's a weird way of saying "lack of competition". As others have mentioned, why should Epic Games bother supporting Linux?
Considering that I'm gaming on Linux, the number of competitors is pretty small and close to zero, I'm not sure why I should be forced to switch operating systems to support the "better platform".
I say this as someone who's been running Vortex/Skyrim modding on Linux years before there was official support for it and I'm kind of shocked honestly to hear that people are cheering for something I did so long ago (5 years to be precise) I hardly remember the time doing it.
I try out the Launcher every couple years to see if it's improved. I just installed and logged in for the first time since 2023.
Looks like they have finally fixed lag and freeze jank that occured on every action, blocked scrolling, and etc.
Unfortunately just clicking on the "Featured Discounts" items on the store home page.. 3-4+(more like 4-5+ on further testing) FULL seconds of blank until the game details load. An ecommerce site where the items take 3-4 seconds to display!? I flipped over to Steam and everything in the store loads "instantly".
Sigh, I'll check back in 2028.
Edit: It boggles the mind and defies reason that they can't get a handle on table-stakes UX after all this time, energy, and hundreds of millions of dollars sunk into it. Nepotism; gotta be, yeah?
The major feature that EGS lacks and which makes it appealing to indies and repulsive to gamers is user reviews. User reviews are a major influence on consumer choice; and Steam even shows recent vs long term, which signals if a recent change was received well or not.
User reviews, guides, discussions, workshop and shared screenshots and videos: bold social features that are an incredible source of agony for mediocre and bad indie games.
A truly fascinating part is that feature and quality-wise EGS is still, after years of development, miles behind Steam.
Epic likely has talented devs and clearly invests a lot of money into all of this, but it took them years to finally implement a cart. It's not the end of the world to not have one, but not if you are a digital store!
It doesn't even have (or at least didn't the last time I checked) a review system. Steam isn't just a store anymore- it's closer to a social network with communities, discussions, mod workshop (which makes it stupid easy to install mods if a game supports this).
With forums dying and reddit turning into whatever it is turning into, Steam forums is IT for a lot of gamers.
If I see a game on sale the first thing I turn to is a review section- more often than not it's enough to gauge whether I'll buy this thing or not. And it's a nice place to ask whenever something in the game bugs our or doesn't work, or to just vent.
EGS is (or least was) really damn slow to start (never mind to launch an actual game). Linux support is non-existent.
Sure, it is extremely difficult to tackle a leader when a headstart is this large, and when people already have massive libraries of their own on Steam, but it's been what- 7 years of development? Epic had a clean slate, no compatibility to worry about and all the features their main competitor had, mapped out to copy- and they didn't even try to reach feature-parity.
Giving out free games only takes you so far when people lack the necessities to stay at your platform
The exclusivity deals they struck early on are an albatross that still drags them down. I think the audience would have been much more receptive to deals like Alan Wake 2, where that money spigot got turned into something totally unique that wouldn't have existed without that capital investment.
Among other vanity projects, they hired Simon Peyton Jones, long the most prominent developer of Haskell, to build "Verse", Tim Sweeney's hobby language [1].
I'm sure SPJ isn't that expensive, but still, it's pretty far from Epic's "core mission."
Epic lost billions of dollars when they were kicked out of the App Store and Google Play and they were out for a long time. Only now Fortnite is coming back to mobile.
Exactly. Their holy war on the App Stores blunted Fortnite’s momentum at its apogee.
On one hand, I admire their chutzpah. The App Store model has weighed down the entire software industry and has prevented entire categories of new products from growing out of infancy due to anticompetitive practices. Everyone, Apple and Google included, would actually be better off without the App Stores in their present form, and I’d love to see them weakened or eliminated.
But on the other hand, Epic actually accomplished very little in their war, and nowhere near what being unavailable on mobile platforms for years cost them.
Additionally, their refusal to go after Xbox, PlayStation, and Switch never made any sense to anyone except for those with a financial interest in those arrangements. The rest of us were just confused — the console App Stores are the exact same model as the mobile App Stores.
I suspect Epic’s actual reason for not going after the consoles was a bit of realpolitik or cowardice depending on how you look at it. They couldn’t afford to be locked out of the mobile and console stores at the same time, so they invented some tortured rationale for why they could pay the console vendors their 30% but not the mobile vendors. But, this muddied their message and they came up mostly empty handed in the end, and here we are today.
That's not how I see it at all. Steam has some abusive policies like not allowing your game to be on other platforms for a cheaper price. They take 30 percent cut. Compare that to epic takes nothing on first million revenue and then 12 percent.
Epic are trying to break into what is nearly a monopoly.
there’s a huge component to gamers that they are emotional and resistant to change. gamers hated steam when it came out. and now the backlash against epic store is huge. they haven’t done a good job fixing the perception of epic store the way steam did
I certainly still hold a grudge against tim sweeney for saying piracy made them not release stuff on pc and after a while going back to releasing on pc while whining about valve fees and then launching epic games with similar fees and way worse service for the developers...
As I understand it, epic charges less but also offers less services that a developer can need like the gamehub and steam's 30% i think is tiered and reduces with sales volume? I'm not sure, though, don't take my word for it.
1. Those features aren't a la carte, so the share matters if you're not utilizing those extra services. You're basically paying for the audience.
2. Valve does have tiered shares, but it's based on publisher sales. And it's extremely high. I have to check again, but I believe the threshold was 25m yearly revenue for 25% and 50m for 20%.
Innsome ways it's more frustrating. It's basically a tax cut for the rich.
If you are a large game, they will not provide you an appreciable portion of your sales as keys. Sales made this way also likely hurt your organic distribution.
Re: value propositions: Steam's 30% reduces to 25% after $10M made, and 20% after $50M.
> there’s a huge component to gamers that they are emotional and resistant to change.
This is just wrong. You portray people as being irrational / "emotional", but Steam was actively bad when it first launched. The fact that people changed their opinions on it when it later became actually good is not emotional, that's in fact exactly rational.
The Epic Game Store doesn't need to fix "perception", they need to fix their actual product instead of trying to take shortcuts to gaining users by burning hundreds of millions of dollars per year on exclusivity deals, which are extremely anti-consumer, and will obviously result in rational backlash against somebody blowing money to attempt to force people to use their product for access to a completely unrelated product.
Exactly. Steam an launch was some other program you had to have running on your machine, that was buggy, taking up resources when most people were barely running most games (people upgraded computers to play Half Life 2!), and had no point.
Steam with thousands of games, that regularly has (or had) massively deep sales that let you get games for cheap, barely uses resources (most players are not struggling now to run games), and run very smooth. Is a very different beat. Valve earned trust.
Without commenting on any other part of this exciting console war, I don't know if this is true. Steam on my machine still always consumes nonzero CPU when minimized, possibly because it opens to the busy animation/video-filled front page then its WebView doesn't detect minimization. It's funny how Steam never comes up in the "stop making WebView/Electron apps" discussion when they were the original sinner (yes I know they were using IE originally).
You are correct. Steam was actively bad at launch when it only had Valve games on it. And they fixed the platform and then started allowing other devs to put their games on it.
EGS is currently bad and trying to position themselves as a Steam alternative when they simply are not even close to the same quality.
It's hilarious how I must have like 80 games there, with zero intention of ever installing Epic, or even playing those games. Yet I must "claim" them... just in case. I bet the majority of users do that hahaha
Interestingly, I don't even think that the Epic Game Store was a vanity project. It was probably a good idea, they had a successful product and could build up their store out of it. Basically what Valve did originally.
But instead of focusing, you know, in making their story desirable to use, they focused on shit like exclusives. And for that, they should fail.
I prefer GoG over Steam, even while I am super grateful for Steam making gaming on Linux possible. And GoG didn't need to rely on exclusives for this.
How do they win with exclusives? The strategy is nonsense.
For Sony, I get it. I want to play Demon Souls, I buy a PS5, now I own a PS5 I'm gonna buy more games for it.
But for EGS this doesn't make sense. It costs me nothing to install both stores on my PC. I buy Alan Wake 2 on EGS, great, that doesn't make me any more likely to buy the next game I want there. Nothing about the platform is sticky or requires a sunk cost.
Unless they're making enough money on the exclusive games to justify the deals on their own (which, given this announcement, seems unlikely) I don't see how they or you think it could work.
> It costs me nothing to install both stores on my PC.
But you wouldn't bother unless you have a reason to. I put off buying games I wanted to for months because I'd've had to install a new store. No-one is going to install a store for nothing.
> I buy Alan Wake 2 on EGS, great, that doesn't make me any more likely to buy the next game I want there.
Now every time you launch Alan Wake 2 they get a chance to sell you another game. If you see a game you like, why wouldn't you buy it on EGS now that you've installed it and know it works? They've got your email address now and can send you recommendations or tell you when there's a sale on.
Sure, it's still going to be an uphill struggle. But if they can't get you to install the store then they can't even start.
It's called a network effect. At some point, you use it because you use it. And without any killer feature, you have no reason to move. It's not "wrong", but it explains why "just do better than Steam" does not work.
No, I am sadly human. Heck, these days I'm sloppier with my typing specifically to avoid such accusations.
You asked why and I answered with the real reason. It's not that deep. People don't leave because people don't leave. If that's not a satisfying answer, I agree. But reality can be irrational.
Historically, exclusives have been the only way to get an edge in. And it only takes one system seller to pull it off.
Or at least, that's how it worked 20 years ago. Thing is, games got so diverse, as well as the rise of "forever games" that there's fee actual "systrlem sellers" these days. It's really just GTA that comes to mind now.
I'd love steam to have some competition. epic isn't it though. Epic sucks up your personal data to sell to advertisers and "marketing partners", the client itself is trash, it's just one more middle man to get in your way (https://old.reddit.com/r/EpicGamesPC/comments/zc5ri3/playing...) at inconvenient times.
A good competitor would not come from a game publisher. It wouldn't collect any more data than it needs and wouldn't use your data for marketing or sell it to anyone else. It also wouldn't be able to remove your ability to access and play the games you've already purchased for any reason.
Bad products/services that are more trouble than they are worth do not magically become good because they might compete in some ways with something else.
GoG is the closest thing to a steam competitor right now and even in that case I have zero incentive to install their client.
Competition is good, the EGS is bad and anti-consumer.
Two anti-consumer products is probably better than one, but I also hate Epic as a company, so I would just prefer for Steam to win. At least I like half-life.
> Unfortunately it is their employees that are paying the price of leadership
Neoliberalism at its finest. The world moving towards conservatism has left us with this model: The working class takes the hit of each crisis from small to big.
> ”Sorry, HOW?!?
How can a company like Epic games … be losing money with a product that is so mature?”
I’ve been playing Fortnite a bit lately, after my nieces got me into it.
One thing is that although the player counts are high (always hundreds of thousands of players online, just in the main Battle Royale game), the average revenue per player can’t be that high.
For one thing, once you’ve bought the $10 battle pass once, you only need to average maybe 1 or 2 games per day to earn enough vbucks to buy the next season’s battle pass with vbucks. So if you stay active you can pay once then play the game free forever and still get access to a huge amount of free cosmetics. And much of the player base is kids who are just begging their parents/uncles to buy them stuff in the game rather than spend money themselves because they don’t have credit cards to link to their Epic accounts.
Compare this to something like Hearthstone which is similarly mature. They have a similar battle pass but there’s also a strong incentive to pay real $ for extra card packs and cosmetics. And there are clearly plenty of adult whales buying this stuff. For example, there’s a new mythic Deathwing skin on a gacha wheel that costs, on average, about $200 (!!) to get. It’s only been out a few days and I’ve run into multiple players who have it.
Hearthstone battle pass isn't really comparable to Fortnite cosmetics. Hearthstone is pay 2 win where the majority of new cards are better than old ones.
> you only need to average maybe 1 or 2 games per day to earn enough vbucks to buy the next season’s battle pass with vbucks. So if you stay active you can pay once then play the game free forever and still get access to a huge amount of free cosmetics. And much of the player base is kids who are just begging their parents/uncles to buy them stuff in the game rather than spend money themselves because they don’t have credit cards
I lack the vocabulary to describe how fucking shit this is. Poor kids that have been sold into this versus the games we had that didn’t outright exploit.
Kinda shame on you for contributing in to this. It’s gross.
Honestly, Fortnite is run pretty responsibly. It's not bad at all compared to some of the other nonsense that's out there. Everything in the store is straightforward and fair. No gacha/gambling mechanics, no “pay to win”, no insanely priced super rare items.
I think big media companies are just structurally unable to stop trying to double their revenue. They just keep pushing out more products and over-extend at the same time everyone is losing interest in them. That's how you end up with say the MCU producing at quadruple the old pace and the movies making less than ever. At some point there's just nowhere to go.
They could have loads of money and still would need to tighten their belt once usage drops. I could have 100ks in my savings accounts but if my hours / salary was reduced at work, I would still reduce my spending. It's just being smart.
>"We've had challenges delivering consistent Fortnite magic," Sweeney said, adding "market conditions today are the most extreme" since the early days of the company founded in 1991.
Probably the closest way to say "we're in a recession and gaming isn't resistant to this one" I've heard yet. But it makes sense: a "free" service that entices with cosmetics is easy to cut when parent money gets tight.
And if kids lose interest they will move to another game. Or more likely, TikTok and its medium. Just increasing the dopamine.
Wonder how developers working on profitable parts feel about it. I’ve been at an employer who burned their cash on vanity projects and hubris and turned around to people working on the bread and butter profitable parts and said “sorry hard times hit, no bonuses this year, we have to tighten our belts”. It's when I left.
That's pretty much every tech company these days. People wrongly claim they "over hired", but in reality these companies were trying to open up a half dozen new initiatives all at once. I worked at Unity and you'd be surprised what aspects were worked on (publicly, so I can pull it up if interested " that you probably never heard of.
Those all shuttered as companies went into maintenance mode. I'm sure Epic has similar reactions. I remember them going pretty hard on cinema and architecture, but those have been quieter over the years.
So I guess they are finding out that running an app store isn't very profitable and dare I say suggests that the percentage Apple charges was not unjustified?
Seriously? Are you seriously making this argument?
Are you seriously comparing running a PC app store vs App Store? One is the most open platform and the other has only one (1, uno, sole, single) app store.
My nephew was deep into Fornite for years - now at 15 he (and his friends) moved on to GTA V. Imagine what a treasure trove of gaming you can discover as a teenager today, looking back at a pool of 15-20years of great games.
I started playing in my late 40s, but it got stale pretty quickly. Epic keeps changing things to try to keep it fresh, but they change the wrong things: usually making the game harder and more frustrating for casual players, in order to cater to pros and streamers. When I started playing, I could win a few matches if I got lucky. Three chapters / 15+ seasons later, I get spanked within 5 minutes of joining a match by people who live and breathe the game. I stopped playing because it's just not very fun for someone who just logs on once a week to play for a half an hour or so.
Tbf, "just make the next Roblox" is kind of an insane business proposition. Roblox has enjoyed unprecedented success at engaging the same age range for 20 years. Most games that are anywhere near that old have for the most part followed their playerbase as they aged. Runescape is a great example, where enough of their playerbase in 2013 were the same people who were playing 2007 that they demanded a reversion.
Roblox, in contrast, has been extremely popular with 7-16 year olds for 20 years. They're funneling in new players faster than old players age out. It's pretty wild.
My personal theory is that Roblox largely stepped into the amateur game dev hole that Flash left.
> I don’t think this is necessarily what is happening.
This is exactly what happened with my niece, my nephew, and all of their friends.
Which isn't to say they've outgrown all of the games they played when they were younger. They still play minecraft, stardew valley, kirby, mario, etc. I don't know why, but they all bounced off of Fortnite after they hit a certain age. I wonder why.
I think these type of shooter games have significant competition. So you have games and genres that peak for times and then slowly or quickly get replaced. And entry to this is hard. You get lot of failures and few successes.
Counter-Strike might be a exception. It seems to keep older players well while still getting enough new ones. And also have enough gacha mechanics to make lot of money...
Right. I think one way to think of your relationship to customers is you grow up with them. Trying to be intergenerational can be really hard because you have to keep winning over a new generation for the first time.
They are paying creators a lot. $220 million in 2023. [1]
That combined with trying to undercut Steam on royalties, the 2025 softening of their cash cow, the Apple legal wars, a number of R&D bets, giving away free games, and an absolutely MASSIVE marketing budget...it can go fast.
> Almost every other games developer would love to be in their position on Fortnite
I seriously hope that isn't true because Fortnite is a showcase of nearly everything wrong with modern gaming. It's an ad platform/casino that prays on children and is designed to make them feel like shit by pumping them full of anxiety/FOMO over their various passes, gambling, and vbucks balance. I think the only good thing you can say for Fortnite is that it's not often pay to win (although there have been skins that gave players advantages over others) and it isn't run on child labor like roblox is. If Fortnite is actually losing players that's great news.
I hope that most games developers would be ashamed to release a game like Fortnite and that the ads and predatory casino mechanics are something they'd choose to avoid in their own games.
> "We're spending significantly more than we're making, and we have to make major cuts to keep the company funded," he said.
The chances this is accurate are extremely small. This is either anticipating AI coding goals, the CFO proved they were overloaded on developers, or they're just cutting to hit quarterly numbers.
I'd be sad if "quarterly numbers" is a reason for a privately held company with 40% controlling stake still held by Sweeney to lay off 1K folks.
As an indie dev, I generally like the guy's stance on shifting the PC gaming industry's support and financial incentive structures, so I'd be a bit surprised if he just did mass layoffs like Embracer and co.
That said, the article implies things that aren't necessarily canon: "cut jobs as Fortnite engagement falls" doesn't mean "cutting people because Fortnite is flagging". It's much more likely because the Epic Game Store struggles to push enough volume to recover the cost of developer acquisition on the platform.
It might be a case where they're projecting costs and a pessimistic Fortnite market a few years out. I doubt this something you do after the money is gone. You'd look ahead and see your runway in a down market is way too short and cut costs.
You can't just bet the farm on dropping a new $5B/year game.
Cosmetics suck. It's all the same rehashed "urban style" characters with the same design again and again. I don't want to buy those. I've bought some video game characters like Geralt, but that's it. They can do historical figures, old movie characters, national costumes and songs, maybe something military etc., but they don't. And I don't want to buy battle passes recently, they are boring and stupid, all those items from them only clutter the inventory that you have to clean manually.
I suspect they've been behaving like google in using a stable golden goose to fund moon shots, but unfortunately for them now that golden goose is rather sick and no longer making so many golden eggs.
Epic Games does way more than just purely making games.
They also have their own Steam competitor (Epic Games Store) and, more importantly, they develop and support Unreal Engine used by tons of other game dev companies.
If you want an apples to apples comparison (i.e., other big live-service game companies) in terms of the employee count, you got:
Mihoyo (Genshin Impact, Honkai Star Rail) - ~5,000-6,000
What about Valve itself? They have ~350 employees. They make Steam, SteamOS, Steam Deck, Steam Machine, Steam Frame, the Source engine, and run four actively successful live service games: CS2, Dota2, TF2, Deadlock.
Last I've heard Valve makes use of a lot of contractors however. So the number of people working on their projects is a bit higher than their employee count suggests. Anyone's guess how many though.
I know they're sponsoring a bunch of ARM and Linux projects as well.
The small size of Valve is simultaneously mind boggling but also not, given its very intentional independence. I would have to imagine that they must contract out or have partners at least for their hardware relationships if not for their massively multiplayer online games. At just 350 people that's enough annual revenue to make everyone there a millionaire several times over. Simultaneously plausible but mind boggling.
They contract out all the time, they've admitted to it in lots of interviews. So I think through the amount of contracting they're able to keep their core hires down.
Yeah but Valve is not publicly traded, so that comparison is of course totally unfair! /s
Having skilled and happy employees that aren't constantly changing and do not spend all of their time on ways to fuck over customers and chase trends is simply impossible. Releasing a piece of hardware and leaving it open for customers to do with what they want? Linux? Not hiring people the second line goes up and then immediately firing them when line stagnates? Preposterous.
The game store doesn't need a lot of employees. A few years ago it was reported that Valve only needed about 70 employees to run Steam while it generated billions of dollars in Steam fees (30% per game). It's basically free money for Valve. I bet the situation is similar for the AppStore and Google Play.
Though Unreal Engine does indeed need quite a few developers. Additionally, using UE is much cheaper (5% on games exceeding 1 milion USD gross revenue) than using Steam (30% on every game). So they not only need more developers than Valve, they also earn less money.
Steam doesn’t really attempt to gatekeep submitted content the same way that Apple or Google do so I would expect those companies to have much larger teams supporting, in mostly non-development roles. Steam support has also historically been kind of a joke (not sure if it’s improved in the last 5 years) though I don’t know if Google/Apple provide a better experience
Don't make games, but Unity does operate worldwide and has a LOT of supports for ads (their main money maker, unless something recent happened).
That globalization is a big reason many tech companies swell. When you need a team to work in and around every region's laws and regulations, you get big quickly.
But also, unity has slimmed down and scaled down on a lot of initiatives.
Games with micro transactions are one of the most profitable things that you can do today and fortnight being fortnight. There are tiny mobile companies being sold for billions and making massive profits with predatory mtx transactions. Gatcha games are doing extremely well, and fortnight is no exception.
Valve is making a killing over CS gambling and MTX as well, so not a good example. Steam is obviously making more but even CS itself would have made Valve a very successful and profitable company. Pretty much all of these build on predatory practices though.
If we are talking about games without MTX, yes that’s a very rough business.
They're also paying out hundreds of millions to map "creators", the majority of which are pumping out low effort game modes like Steal The Brainrot. I can't help but feel this isn't helping their situation at all. Then again, Steal The Brainrot often surpasses the actual Fortnite game modes in player count, so maybe it is worth it. It doesn't seem like a sign of good health for Fortnite overall, though.
Ok, but Fortnite is a massively popular success, even as its popularity slips. Fortnite's run so far could have sustained Epic for years, even without other revenue they get from things like Unreal Engine. Games as a whole may be a risky venture, but we're talking about Epic here; the mystery is not how to succeed in games, but how a company that had an earth-shattering run of success in games is now in such a position.
It absolutely is a profitable industry, maybe not as profitable as todays greedy shareholders would like it to be. Just look at the CD Projekt that releases 1 game per 10 years and still makes a fortune through Netflix colabs and selling merch.
I agree with your sentiment, but I also don't know if CD Projekt is a great example because its not their original IP. I am sure the games saw a boast in sales from awareness given by the TV show. But I am assuming Andrzej Sapkowski is probably the one who gets most of the money from licensing from Netflix. Although I will say, I don't 100% know all the details for the Netflix deals. And due to lawsuits and what not, exactly what Andrzej has the ability to sell rights to isn't very easy to find out with quick searches.
Edit: Ah, maybe CD Projekt does own the rights completely? They may have bought the right completely from Andrzej? So Andrzej may not have been the primary party selling the rights? Or maybe not? Andrzej may have retained film/tv rights and not sold those to CD Projekt.
The person I was replying to is asserting that the winners of the metaphorical lottery are not in profitable employment, so you aren't making the point you think you're making.
Well, you goto be good nowadays, you compete against the whole worlds dreamy eyed teeangers wanting to make "their"game. A wellfunded, pig-trough-slop-mill ala hollywood can not compete against that when it comes to fun, art and experiences. They fled into gambling, but gamers actively ostracize lootboxers nowadays.
Gamers love, love, love lootboxes. Can't get enough of them. There are many lootbox games with 10-100s of millions of players. The Reddit/HN vocal minority who hate lootboxes (myself included) probably represent <5%, if that.
They made products that were effectively only targeted at the gaming audience, and when they pivoted, they were rewarded substantially, as the wider market recognizes how small the niche they used to be in was compared to where they are now.
You have literally no fucking clue what you're talking about. The games industry is ~200 billion dollars per year. Film is 30, music is 60. Not only are games the largest entertainment sector, nothing else is even close.
A hardware company pivoting to the AI bubble has literally nothing to do with the profitability of software.
This is the worst take I've seen in a while on HN. Nvidia doesn't make games, and for its case, they can either sell the same die as a gaming GPU for $2,000, or as a server GPU for >$30,000, the math is simple and obvious, which is why the stock jumps.
Epic doesn't have anything else besides the gaming market. And the gaming market is huge, it's more than music and movies combined, so please just stop spilling bullshit.
Right now even Valve realizes that Steam will literally run out of steam. This is why they have been trying to become more like Nintendo and selling their own hardware (with varying success) .
Developers chase the user base. If and when the users choose Linux developers will target Linux.
Proton as a project let's valve hedge on the heir apparent OS without upfront developer cost. If the Linux player base grows, developers will follow and valve is poised to remain dominant.
Because of Oracle v Google, supporting applications running in the Win32 userspace isn't necessarily leaving yourself open to threats of Microsoft meddling.
There's tons and tons of older software that people still want to run that might never be ported to Linux. And that's fine, because there's no problem with building compatibility layers to make it work. Microsoft can't do anything about that.
I believe they have proved that very few games are actually Windows games. The few remaining are mostly those which require Windows kernel drivers to run or connect to online services.
Hmm, citation needed on that one imo. Consensus is that their hardware strategy is in service of selling more games. Hardware revenues for Steam Deck are proportionally tiny; Frame and Machine aren’t going to meaningfully change that.
I am not Tim Sweeney's biggest fan. I know he and his company have many detractors. Please read this comment with that in mind, because while I don't love them, I also think that as layoff announcements go, this is good. No beating around the bush, explicitly NOT blaming AI, taking responsibility, taking care of those impacted. If you are gonna do it, this is as good as it can get.
I think the reality is that Epic got big because of Fortnite but nothing lasts forever. They would have been better off building a war chest and pulling a Valve (though I'm sure they'd hate hearing it that way): going silent and making whatever they wanted for a while, and then trying to repeat the cycle, rebuilding the chest, and then going on. Video games are the exact opposite of Infinite Growth Forever. People get bored and move on.
Meanwhile, Epic has many stable and valuable businesses - Unreal, the game store, etc. - which are perfectly capable of sustaining a sizable company. Just not one as sizable as Epic is. The best case for them is they figure that out, and manage to make a sustainable go of it doing that.
> Video games are the exact opposite of Infinite Growth Forever. People get bored and move on.
To me, Epic Games were clearly trying to "pull a Valve" and capture the platform magic that allows Valve and other platforms like Roblox to be sustainably profitable. Obviously they have their own game store, but they also have a Fortnite Creative / UEFN (Unreal Editor for Fortnite) platform where people can create minigames inside Fortnite that work similarly to Roblox.
They even had the right idea for a while - refusing in-app transactions in their Fortnite Creative platform to encourage actually fun games rather than greedy games that prey on players. Unfortunately they had to walk back that system recently, which I now assume to be for the same financial reason as this new layoff.
I think their idea didn't work for two reasons. First, they locked down the UEFN platform too hard, leaving not a lot of options for developers to modify core gameplay features like movement and player controller. Devs like me who wanted more control over the player character and game mechanics were really severely restricted - if it was intentional, it was a bad call, and if it was unintentional then it shows that UEFN was too half-baked technically when they launched it. Second, Fortnite already had the reputation of being "just that Battle Royale game", so people didn't innovate too far beyond the game's base gameplay, rather than Roblox which was more like a true game engine / platform where every genre was possible. This kind of doomed their plan to compete head-to-head with Roblox from the start.
> To me, Epic Games were clearly trying to "pull a Valve" and capture the platform magic that allows Valve and other platforms like Roblox to be sustainably profitable.
Valve have headcount of under 400 people. Obviously they have contractors working creating assets for CS / Data / etc, but company itself is swift and agile.
Epic was around 1000 people at Fortnite release then grown to over 4000.
Yeah, UEFN when you dig past the surface is rough. I think it's a mix of both your reasons. UEFN seems to be a spinoff of their Fortnite Creator workshop while making use of their new Verse scripting. If this was originally only meant to mod Fortnite, I can see why it's so half baked as a Roblox competitor. You really are pulling teeth if you want to make anything other than "Fortnite but X".
I broadly agree, though it does seem like Minecraft has some plot armor here. I think people are still buying and playing Minecraft a lot. I like Minecraft, I play it occasionally, but I guess it's a game that has much more staying power than average.
I though my grievances with Epic are primarily because we never got Jazz Jackrabbit 3.
Minecraft is kind of a perfect storm for longevity. It is a sandbox game, that has a lot of depth. But its also extremely easy to jump into casually (unlike idk Kenshi or Rimworld). Its also family friendly but not in a way that makes it off putting to adults so anyone 5-500 could play it. Its also not so expensive that people refrain from rebuying it on different platforms.
Someone is suing mojang because they break EU/Swedish law (It was a youtube video worth watching)
Minecraft bedrock is having some incredibly shitty tactics to move people towards their marketplace while community calling it bugrock
I don't think that many people who play Minecraft really appreciate Mojang being bought by Microsoft. Many are oblivious to the fact sure but overall, community's sentiment is negative towards Microsoft buying Mojang imo.
I don't own a Windows computer so I only play the Java Edition, which still shockingly gets regularly updates and is very mod-friendly even still. When MS bought Minecraft I assumed that they were going to drop support for the Java version but I was clearly wrong about that.
Didn't know about the lawsuit though, I will give that a look.
Mojang and apparently someone at Microsoft who listens are smart enough to know that while most of the Minecraft revenue comes from bugrock, 99% of YouTube content comes from Java.
They need that and the modding community to keep the game alive so that new players buy a copy on phone/console/etc.
> When MS bought Minecraft I assumed that they were going to drop support for the Java version but I was clearly wrong about that
Oh they sure wish that but the community loves java and for a good reason actually but their first step towards this was migrating mojang accounts into microsoft accounts as previously bedrock had microsoft accounts iirc and java had mojang accounts and microsoft accounts both but they have now blocked mojang accounts
AFAIK Java Edition is still the actual development branch. Mojang develops new updates for Java Edition first, then lets another team port them to Bedrock.
I don't think their approach is getting to stable, valuable businesses and keeping them that way. Their company name is Epic, not Mediocre BlueChipGameCo. I think their approach has been to make big investments into things, almost like Amazon's earlier approach where they would re-invest everything into the business and that might be where Epic now has to react to the market slowing for them and pull back.
I have to imagine AI is having an impact but not in the way people jump to about them using AI. How many people out there have ideas for games and can't execute them because they don't know the tech? How many people in the software industry were drawn to computing because of gaming?
If they built AI into Unreal Engine so that someone could approach it from a Game Producer/Designer role and not have to get deep into C++ programming or shaders and art assets, and produce games, games that go to the Epic Game Store and they take a cut? That would move the market in a way that would be more fitting for their company name.
> They would have been better off building a war chest and pulling a Valve (though I'm sure they'd hate hearing it that way)
Isn't that exactly what they were trying to do with the Epic Game Store?
Steam is the thing that has made Valve successful. They were great as a game company, but as you said, the games don't last. Steam does, and I don't think Valve would be that successful in a business sense without it.
At least they're doing severance, health insurance, etc. Nowadays if I got laid off at a company I'd expect to just find that my key didn't work and a "check's in the mail" letter to the wrong address.
You see this trap in tech companies as well as game studios. I call it "acting like Google before you're Google". And in fact virtually nobody becomes Google.
Google has been a money printing machine for 20+ years almost unparalleled in human history. That's allowed Google to write bespoke software for everything, which has been useful because almost nobody has Google's problems. It's also allowed Google to contribute a bunch to open source and engage in vanity projects. They can afford it.
Then you see the likes of Twitter a decade or more ago who dedicated possibly hundreds of engineers to make Cassandra work. That's doing Google shit. But they aren't Google. And eventually those chickens come home to roost.
Games are like any content business where the owners and leadership are trying to create a formula that can be repeated infinitely. Content business actually hate the creative people who make their content because creativity doesn't scale. This is why movie studios churn out sequels and superhero movies. It's a formula.
Games eventually fall out of favor as genres get stale and new genres get created. Minecraft is an almost unique exception to this. There's a reason it sold for ~$2 billion. It's still popular. It's crazy. But that kind of example is so incredibly rare you should assume it's never going to happen.
The hubris at Epic was that they could challenge the Apple and Google app store monopolies. They were wrong. And they wasted an extraordinary amount of time, money and opportunity chasing that. That was a strategic mistake, even though I agree with their philosophical position.
I'm reminded of id software. John Carmack was legendary for years. Wolfenstein was groundbreaking. So was Doom then Quake. But eventually (IMHO) id games ceased to be games but because tech demos to sell engine licenses before ultimately being acquired and swallowed.
I feel like Epic is the same with the Unreal Engine. Fortnite is a success while it's popular and people buy cosmetics but when that popularity wanes, they have a huge revenue problem.
> Then you see the likes of Twitter a decade or more ago who dedicated possibly hundreds of engineers to make Cassandra work. That's doing Google shit. But they aren't Google. And eventually those chickens come home to roost.
Isn't it the other way around? Using off-the-shelf solutions like Cassandra didn't work, so they had to resort to doing actual Google shit, a custom solution, to meet their needs.
Look at Facebook/Meta. They use MySQL (plus some other stuff on top). Twitter was at the peak of being trendy and trying to make NoSQL work. It was quite literally an idoelogical vanity project.
I think you're overall point is correct, but the specifics about twitter are backwards. Twitter would have been way better off using Cassandra (but it wasn't built yet!), instead you're 100% right, they did their own bespoke stack, trying to replicate what google had internally, and they didn't have the $$$ to do it.
It was Facebook/Meta that later open sourced Cassandra and a buncha other great open source stuff.
Someone else suggested I was misremembering the Twitter Cassandra timeline so I went back and checked. No, Twitter droped MySQL for Cassandra in 2010 [1], after Facebook open-sourced it in 2008 [2].
Twitter claimed they were using Cassandra (or at least planned to) for storing tweets [3] but had rolled something else entirely (called Manhattan) by 2014 [4][5].
So yes it was originally released by Facebook but it was Twitter who spent a massive effort trying to make it work in production. And failed.
It’s a reasonable take, but I do think there is a wrinkle: Tim is an AI proponent, but also understands the current politics of it. Personally, I doubt that AI has nothing to do with this: Tim just knows not to admit it.
Companies fire people all the time. Layoffs are regular. To the extent that AI has much to do with layoffs in the past few years, it's mostly AI being used as an excuse, rather than it being the true reason.
I understand that that’s generally the case; I’m saying that in this specific instance, there’s reason to suspect that it is actually a contributing factor - one of many.
Often when I see layoffs like this, I can't help but think "Wow that company has so many employees and yet, in practice, does so little". This perhaps a rather uncharitable sentiment, but I can't help but have it.
Yes, Unreal Engine keeps getting improved, more Fortnite content gets produced. But there is a general lack of innovation, one that I find personally painful when I look at Epic's recent-ish track record. Needing to fire this many employees is not just a result of market conditions, but also a straightforward consequence of not being able to leverage them for sufficiently lucrative outcomes.
Companies with this amount of capital are well positioned to take multiple strategic bets which aren't at all safe bets, but pose no real financial risk for the company in aggregate. Why do these bets end up being taken instead by indies with much more to lose? Well, partly because indies often _need_ to take riskier bets to carve a niche. But the other side of the coin is, what I can only surmise, a lack of imagination and adventurousness on the part of management. They could be funding many experiments and seek to have another hit like Fortnite, perhaps in a somewhat different market. Having to seek another hit while your finances are declining is less pleasant.
When a company loses its edge in this way, as long as it hasn't _really_ captured a demographic or created some very sticky ecosystem, it's bound to get whittled down repeatedly. I doubt that Epic will suddenly get more creative and adventurous at this point, but perhaps necessity will have its part to play.
(Aside from all of that, I agree with most commenters here that the layoff is being handled about as gracefully as one could reasonably hope.)
> "Wow that company has so many employees and yet, in practice, does so little"
Some of it is real need for things like support, payments, and compliance in a bunch of languages and jurisdictions and across a bunch of platforms and combinations of platforms.
A lot of it's just that large businesses tend to be shockingly inefficient, often taking literally many hundreds of person-hours to do things that a small company or small team might do in low-tens. Coordination costs are high, processes are often really bad in ways that nobody who could fix them is empowered to, serious principal-agent problems are the norm rather than the exception, et c.
One of the weirdest things to me about the AI craze is that I don't see how it fixes organizational problems, and most big orgs are already burning more cash on waste due to those than they could possibly gain from fairly-optimistic LLM gains. Like, if they wanted to 5x development speed, they already can without a single LLM involved, by managing better. They could have done that ten years ago. All the more wild that they're flipping out over LLMs. You can't even come close to efficiently organizing the resources you already have...
> if they wanted to 5x development speed, they already can without a single LLM involved, by managing better.
True, but leaders of large organizations always want to fix inefficiencies and presumably failing to. Kinda like saying "if humans stopped fighting wars, most of them would have better quality of life" -- people whose life quality is better at peacetime are already trying to avoid wars, and there's not much more they can do.
OTOH, AI is a practical step a CTO (or CEO or Board or whoever) can take to make the company more efficient (assuming the hype works out).
TLDR the beauracracy is by design, in part to preserve what jobs are there, and in part to dilllute accountability when it comes up. You can see how these two factors can lead to a negative feedback loop of inefficiencies, where CYA is more important than actual productivity.
Nanite is a good counterexample, very impressive and innovative technology. Even more impressive that they released the technical details instead of going the software patent route. I think trying to leverage the war chest to go after Steam's monopoly was exactly the type of adventurous plan you are talking about, the safe play would have been to make minimal investments and continue churning out games hoping for another big hit.
Lumen, Nanite, Substrate, Metahumans, and Chaos Physics all come to mind as major innovations driven by Epic. Nanite specifically has pretty much no alternatives. Additionally, the developer UX on UE5 gets better from release to release - for instance, being able to recompile your logic or animations while actively running the game is pretty insane.
I suspect the way you get to that size is having a team of 5 people doing X for Fortnite going "man, we could do our specific job a bit better if we has 7 people." Scale that to a whole corp.
Each job is justified in isolation to do a specific thing, at least at the hiring time. I suspect there aren't a lot of people thinking at a high level as you are "we have this many gajillion dollars - what are we betting on?"
Also as you get bigger you need more and more "glue" people, HR, accounting, etc. A five-man team can avoid all that, but you can't take them to 25 and have 5 5-people teams anymore. Some amount is just management.
> They could be funding many experiments and seek to have another hit like Fortnite
Remember that their success came from abandoning their original zombie game idea, and copying ideas from the new battle royale genre. With more polish, of course.
Why the good god do so many people care if business is effcient. If businesses were maximally efficient we'd all be starving to death or working at red line hanging on by a thread with no slack at a job to avoid staving to death, while like 5000 people live like gods.
1. More efficiencies makes for more quality products, and opens up opportunities for more initiatives which will also be higher quality than usual.
2. More efficiencies means companies become super leannin order to minimize labor and maximize costs, focusing on a few select profit centers.
I guess you fall under #2. Both are correct, depending on the economy. So you're rightm for now. #1 was the trend last decade despite horrible inefficiencies.
I don't think so. My experience at inefficient companies is not "Wow I have a lot of freetime." It's "Wow my day is completely taken up by useless bullshit that prevented me from getting anything of value done".
I think there's a good deal of wiggle room between being worked to death and teaching a manager that makes more than you how Jira works for the 10th time.
Epic's 2019 P&L was published as part of Epic v. Apple. According to that:
* Fortnight revenue was $5.5B in 2018 and $3.8B in 2019
* Employee counts in those years: 1063 and 1932
* Average "People" cost per employee: $141K, $142K (CPI adjusted is $182K in 2026).
* Average "Production & Hosting" cost per employee: $189K, $150K (CPI $248K, $194K)
* Platform royalty expenses were 25% of total game revenue
* Slightly under half their Operating Expenses were people
* Fortnight was >90% of revenue
I have a strong guess that "People" costs doesn't include all salaries, and that many employees are categorized under "Production & Hosting", although I expect that also includes other costs. I'll guess 75% is people, which makes total CPI adjusted average cost per employee somewhere around $320K-$370K, but I'll say $320K.
This means 5000 employees cost around $1.6B and cutting 1000 saved around $320M/year in addition to $500M of other costs.
Most estimates of Fortnight revenue claim it's roughly flat or falling between 2020 and 2025 fluctuating between $3B and $6B.
Unless Unreal Engine or EGS revenue took off, it's kind of weird to quadruple headcount while keeping revenue basically flat or falling. If fortnight only makes $2B next year, then they would be underwater on just royalties and salaries.
> Today we’re laying off over 1000 Epic employees. I'm sorry we're here again. The downturn in Fortnite engagement that started in 2025 means we're spending significantly more than we're making, and we have to make major cuts to keep the company funded.
Layoffs really, really suck, but at least there's not a whiff of the "we're doubling down on AI to boost productivity" cop out that we're seeing across the industry.
It's sad that a company being honest about a difficult decision is praiseworthy these days, but here we are.
> Layoffs really, really suck, but at least there's not a whiff of the "we're doubling down on AI to boost productivity" cop out that we're seeing across the industry.
I agree, though it might also be worth pointing out that for a game company there's some risk in that messaging that doesn't exist for a normal SaaS company. Investors might like to hear it (whether it is the truth or not), but the game-playing audience tends to be only slightly less anti-generative-AI than say the art community.
I’ve wondered how much money was burned on Tim Sweeneys quixotic quest to re-create the Steam store. I know a lot of people who would religiously download the “free games” but never spent a cent.
The Epic Games store/browser is awful. I have bought one (insanely discounted) game on it and get all the free games, because i like to collect videogames. But i almost never play them, because the application is super slow. Steam has absolutely the best application, then (with a huge enormous gap) comes Gog, Amazon, Xbox, EA, Ubisoft and Epic at the rock bottom. I don't use Blizzards program, so i can't judge on that one.
My favourite thing about GOG is that it uniquely does not demand that you install their software, instead letting you download installers straight from the website.
They're not fake netinstallers either, which doubles as a guarantee that I keep all of my games even if GOG goes bankrupt/bans my account/wipes my library/etc.
Just a note, on Linux at least, if you use the Heroic Launcher, you can get your games from the Epic store without using their awful launcher. You can just run the games through Heroic, which I find less irritating.
> But i almost never play them, because the application is super slow.
And people say C++ is dead and everything must be done in Electron because developers are expensive and computers are cheap.
This here, is the reason performance matters and fast development time is not always the answer if the competition is strong and their product is high quality.
Starting thinking of it as collection licenses to maybe install games, assuming the license is still valid when you finally get around to playing it. And your account is still valid. And the servers are still running. And your operating system will still run it. etc.
Maybe just get off the train. Your numbers add to the awful business model these games are built on.
The majority of games on Gog offer fully offline installers, where the copy you download is enough to run forever (assuming Windows and hardware compatibility, of coruse).
What do you think these game companies should do instead? The license lets you make your own copies on your own devices while preventing stealing by people who might make a copy and then resell, which would absolutely happen if allowed.
You are absolutely right that they are just licenses and there always be a risk i cannot download or play the games anymore because of some decision. In that perspective Gog is absolutely the best. No doubt about that.
> I don't use Blizzards program, so i can't judge on that one.
It’s… fine. Unnecessary, if you ask me, but ok. OTOH, it is on a completely different scale compared to Steam and GOG. I am sure it would be a disaster otherwise, it really is not designed for that.
I think the following is the bare minimum to compete with Steam at this point:
1. Store with discoverability,
2. A functional cart feature at launch
3. A wishlist with notifications for discount
4. Relatively high download speeds (500Mbps at least)
5. Friends list and activity feed
6. Achievements
7. An equivalent to steam input API
8. Regional pricing with robust payment options
9. Development/Beta build distribution as easy as steam.
10. A useful in-game overlay with at least performance metrics. optionally a web browser and notes.
All of the competition has missed either one or more of the features, making them feel like only a cash grab trying to avoid Valve's cut for providing these features.
Those features are important but I think the key things are the actual games and friends. You cannot start with empty catalog and you also cannot start with older games people already own on Steam. You also need friends to be there on day 1 for multiplayer.
I guess everyone gets different value from different features but I for one would not even notice if Steam removed the overlay, achievements, activity feed, input API or beta distribution. It all seems like bloat to me.
Reviews for sure but I think you could drop linux and just add it whenever everything is stable, I don't think Linux is that big of a gaming population( though growing, thanks deck! )
If Epic wasn’t actively hostile toward Linux (to the point of calling Linux cancer) I could be persuaded, but as it is now Steam is basically the only company actually trying to make gaming on Linux a thing. And because of that Steam will always get my money.
I was at EA during peak Origin mania and the defining regret of my career is not having slapped sense into the appropriate people when I had the opportunity to do so.
We really did have a far better shot at it than even most insiders appreciated (to the point rival companies would tell me to my face how confused they were by the apparent failure to execute), however, the core team were more interested in fighting over who would take credit for it when it succeeded than ever ensuring that it would.
Always thought the hate against EA Origin was unwarranted. They 24 hour no questions ask refund policy back in ~2010 that took steam like 5 years to implement themselves.
Outside of being forced to use a game launcher to launch their games, what was the real crime? Not enabling gambling on their platform like steam?
> Outside of being forced to use a game launcher to launch their games, what was the real crime?
To me, this was the crime. Me and my friends played mass effect 3 multiplayer around launch, which was an EA Origin exclusive. It was a total pain! All of us needed to download and install the launcher, then buy & download the game through it. Then add each other as "EA origin friends". The whole process was riddled with bugs at the time - including payment problems and download problems. Origin would crash sometimes. Sometimes we couldn't see each other in multiplayer, and needed to restart origin to fix it. Sometimes another of our friends would join us - and it was always "oh god, what do I have to do to make this work??".
I really love mass effect 3. But the experience was traumatic enough that I never bought or played anything through EA Origin ever since then. The quality of Steam is table stakes now. And there's so many good games coming out that game exclusivity usually isn't enough to get you over that initial hump.
The biggest gripe I have with the origin launcher (and to a lesser extent, the epic launcher) other than "why does it exist at all?" is how laggy all UI actions are. Game developers can render a 3d world at 120+fps. Why on earth does it take multiple seconds for the UI to respond to a button press sometimes? Its completely inexcusable. The blizzard launcher is (IMO) the best launcher by this metric. You can tell competent people made it, because everything responds instantly. (The EA launcher might be good now, I wouldn't know. I mostly only play games that release on steam.)
I bought Battlefield 2 and it's DLC and one of the earlier Dirt games on EA Origin and it was an absolute nightmare. My games and the DLC would constantly not be authed in my account and I still have like dozens of support threads in my old mailbox trying to get things working.
At the same time Steam had polished a lot of the rough edges like this for their catalog and other publishers so there's really no excuse. I've never had to open support tickets with any other storefront because the DLC map pack for a game would stop loading while the base game kept working.
Yes but EA Origin was still very consumer friendly at that time. They were one of the only people offering digital refunds at the time. Being able to refund a game on origin then buying a different one on steam was definitely a peak in consumer gaming (that plus the humble bundle being good added to the feeling).
No matter how consumer friendly they were, nobody trusted them in the long term. Buying games on EA Origin meant giving them control over games' sales, and a EA monopoly in digital distribution was a nightmare scenario. Their bad PR at the time simply killed the platform, no matter how good or bad the product itself was at the time.
I agree with you about the consumer friendlyness at the time and honestly it was not bad at first, but the problems they had were way more technical with difficulties in buying and downloading and hell even just friending someone and jumping in. When it first came out I thought it was decent and improving but then it just....stopped. They could have competed with Valve but it really felt like they stopped caring one day
Everyone that needs to respond to shareholders has tried already, and failed against a privately-owned company.
Gabe Newell is a billionaire and has shown no particular need to enshittify his brand just to extract more profit. May he blessed with health and a long life.
I can't even play the decent free games I got because I can't find them in the UI. It doesn't have sort by rating (or any other popularity metric) so you have to wade through the junk. Imagine paying for that experience...
I wouldn't say it was quixotic. Think about it this way: If fortnite made at it's peak $5.5b, and 2/3rd of that was PC (I have no idea of the ratio, just guessing), Epic would have been paying $1b to Valve in just that one year (3.66* 0.30).
You could spend a lot on developing a store to avoid paying $1b in fees!
Plus, your chance to launch a store is when you have a big product. Valve launched Steam with Half Life 2. It didn't really work that well at first but everyone wanted to play HL2.
It's a noble quest. And realistic; it's almost beyond reason how bad EGS is/was for so long with so much money and "the best people" thrown at it for a decade+.
I've been involved enough with a few (mobile and PC) efforts in this direction, and now believe the US business culture can't create new ones in established markets.
The reason is the highly successful competitor, in that case Steam, inspires a sort of megalomania in those aiming to compete with them, which leads to spectacular self destruction and consumer confusion as stores try to act big long before they are self sustaining.
Also really makes me question your average USA based developer. Making a program and storefront to manage few dozen to few hundred applications can not be that complicated problem. I am not here even talking about scale of Steam libraries that outlier customers have.
There must be some fundamental problem with either developers or management system or both...
my completely uninformed speculation is that they didn't want to just build a clean, simple store that got out of your way, they wanted to throw in some sort of rent extraction or user control at every step.
It's the same issue as games. No one ever says "I bought this game becsuse of its clean UI". Not unless you're a dev doing market studies. But at the same time, a bad UI in many genres can sink a game. So UIs tend to be as minimal as necessary to ship. Even Steam had the same UI for some 15+ years beffoe finally giving it different library views
The minimal here was to take the Unreal Launcher (which was always meh. But devs rarely interact with the launcher) and shove the tab into there. Any problems with that launcher were passed to the EGS, and amplified by being B2C.
If I have to be honest, it's also tribalism. Exclusives are not a new concept even on PC. But the reaction to some EGS exclusives was so extreme. The PR hit didn't do many favors.
> Tim Sweeneys quixotic quest to re-create the Steam store
Building a marketplace or AppStore isn't quixotic - it helps build distribution and gives Epic the power needed to drive studios to the Unreal Engine, though this strategy clearly went to the backburner due to Fortnite and it's entire ecosystem becoming the golden goose.
That said, Epic is also significantly more overstaffed than it's peers.
>The folks impacted by the layoffs will receive a severance package that includes at least four months of base pay, with more based on tenure. We’re also extending Epic-paid healthcare coverage.
>For example, in the U.S., they’ll receive paid coverage for 6 months. We’ll also accelerate their stock options vesting through January 2027 and extend equity exercise options for up to two years.
As far as layoff packages go, this is pretty good. 6 months health insurance and at least 4 months pay. The last 2 layoffs I experienced were just 1 week pay for every year you worked there and zero extended health benefits. And they made sure to note that they didn’t have to pay out anything at all, legally.
The wording of the announcement is better than the usual corporate non-speak too.
> they didn’t have to pay out anything at all, legally.
And still the overwhelming sentiment on HN is that unions are worthless.. When my company had layoffs the laws (thanks to the unions) made it favorable to us without needing the goodwill of the company. Additionally, representatives from the union were involved in all steps and made sure everything went as it should.
I think they're arguing that it should not be up to the companies being nice. Yeah, Epic's layoffs were nice, but a lot of companies give shit or no severance at all.
I've been laid off and I only get paid until the end of the week, and for healthcare the only thing I have access to is overpriced COBRA.
Well I have a job now so it's not as big of a deal. This was awhile ago.
I live in NYC, and when I was laid off from a job in 2023. I looked into the COBRA options, and they wanted something like $3500/month, which is a lot of money. I called around around and I was eventually able to do a program through NYC where we got insurance for free. It actually worked great; we were able to get insurance within a week. NYC ain't perfect but every now and then they come through.
If I get laid off or fired, I will likely check this option again.
There is a legally required 60 day notice period, and plenty of states have their own requirements on top. New Jersey for example explicitly requires 1 week of severance for every year worked. Yes tech companies are often more generous, but doing a mass layoff with no notice and no severance was never an option to begin with.
Line goes up is also not enough anymore. The slope of line going up is most important. You made 10bn last year, but only 9 bn this year - this means time for some layoffs to please "the market". I have no way to explain this world we live in.
"The line" referenced by "line goes up" is typically understood to be revenue or profit, so if you made 10bn last year but only 9bn this year, "the line" actually went down even if you have more money at the end of this year than at the end of last year.
They just hiked VBucks prices too... conveniently after they "won" their settlement with Google that includes a full on anti-disparagement clause against Google but fully allows them to keep on attacking Apple as much as they wish.
It's really strange too. I thought these settlements and 3rd party app stores would lower prices, but prices continue to go up! And now as prices are going up, Epic is also laying off workers? Hmmm.
You're right they don't have a board and definitely weren't punished by both the FTC/DOJ for anti-trust and manipulative business practices.
Just a small mom and pop shop that somehow seems to elude themselves from the typical braindead MBA playbook of ruining lives to justify their shitty business decisions.
Hopefully the beloved indie game studio can navigate these waters successfully! Lots of sharks out there that like to rat fuck the commons for personal gain, wouldn't want that to happen to the gaming company that helped normalize gambling to children.
Market in this context doesn't necessarily mean the publicly traded markets, it can mean the investor market (and their ability to raise), the financial market (their ability to get loans or other financial products), all of these things are dependent on their overall company performance, which can be manipulated in the short term by mass firing 1k employees so some executive can hit a KPI and get their bonus. Ya know, sociopathic stuff like that.
I also don't understand, this is just a failure from Tim Sweeney being blamed on external factors. With that amount of money and the IPs they own he should have been able to keep the company going but didn't.
A lot of folks wax sympathetic for the employees who've been laid off. But rare is the company which grows large and doesn't develop a lot of entropy in the process. Hiring beyond its needs, bloating, and mismanagement of resources.
Does the company owe a living to those people that it doesn't actually benefit from having on board? Sometimes it sounds like people think so.
1. It's more a matter of respect in the process than the act. People are notified out of nowhere, irrespective of performance, and they need to quickly change many plans. You do that to a company and it's "unprofessional". The double standards are real
2. Given the economic conditions, I am more sympathetic. Normally a large severance would he good reassurance that they'd land on their feet. But I see more and more devs (especially game devs) going through year long gauntlets just to find something not as good. Tim, in comparison, will manage.
This will be an unpopular take but I agree with it mostly. Always remember that you are not entitled to a job just because you need it to live. Always make sure you stay sharp and prepared for the worst case
If you're not entitled to a job, neither is anyone in the capital class entitled to own shit, they own the best houses, all the means of production - they're not entitled to any of that either.
Many of them, no. Tim's been in the weeds, but most billionaires inherited millions and had the money make money for them. They start in positions with more money than many will see in a full career.
A job is a mutually beneficial agreement between two parties. Either side can generally sever the agreement if it's not viewed as beneficial.
Owning things like houses and companies is more about the compact between people and the government. People are entitled to "own shit", because that's how our government is set up.
Not long ago I was looking at my favorite games of decades past. Unreal Tournament figured very prominently, made of course by Epic. So I wondered: why did they stop making Unreal games? I looked at their game chronology. On one hand, they made Gears of War, an Xbox exclusive that never interested me. And the other one? Oh, right: Fortnite. That's where Unreal Tournament went. They made tons of money for sure. But no company, including Epic, has made a competitive FPS + CTF game as solid as UT, UT2003, or UT2004 since that era
They had Unreal Tournament 4 in development around 2018 but it never gained much traction in the pre-alpha phase. Once Fortnite blew up they seemed to just focus on that and their app store.
Halo Infinite is the closest I've gotten to the UT feeling nowadays. Simple arena, equal playing field, drop in drop out, tools-not-loadouts design. It's a shame how a variable and strong design gets put off into the corner to wither.
I wanted to play UT2004 for some nostalgia recently. Turns out even though I own it on the Epic game store, I can't play it because Epic removed it from the Epic game store.
They removed all UT games from online stores and added UT 3X which is a free version of UT3 with Epic Online Services baked instead of original ones.
The only way one could legally get UT99 is to buy physical. And it's been like that for many years prior to an event above, which also disabled the server browser after 22 years of running intact.
Same reason valve doesn't make games anymore. They followed the money and licensing their engine did a lot more than making games. Any games they made were to showcase the engine.
They just happened to hit the goldmine with Fortnite.
I think the problem is also that there are many FPS multiplayer CTF games even if they are not all great, they all compete for attention in a crowded market. Destiny, Call of Duty and all their variants.
Can confirm. There are even growing numbers of high-quality games/projects on the platform (I explored it recently), including a fully interactive+realistic nuclear reactor and 1:1 DCS-like Airbus A320 simulator.
I suspect the popularity and ease of distribution/development on the platform makes it very attractive for developers with a dream.
Many of the games that actual kids spend time on are the purest expression of gaming slop (half-broken microtransaction gambling hell with schizophrenic flashing colors). Roblox and Fortnite's Islands system are both guilty of this. The problem is kids don't know any better and don't yet understand the value of money. The obvious response is "parents should handle this" and while I agree, there is no system to let them say "here are Robux/V-Bucks you can spend on quality content (e.g., Fortnite's Battle Pass is very well designed, quality content), but gambling slop is disabled".
With the downturn in Fortnite (and with it the dream of Fortnite as a platform), and apparent failure of Meta Horizon (at least on the Quest) . . . does that mean the entire concept of a 3D metaverse type UI is dead for another generation?
Considering that they aren't properly separating the two groups, I don't see this "response" as anything but a weak excuse to do what they wanted to do anyway.
Core to the problem is that Roblox’s social media features allow pedophiles to efficiently target hundreds of children, with no up-front screening to prevent them from joining the platform.
For example, in 2018, prior to Roblox going public, a 29-year-old was caught by police with 175 hours of video footage of him grooming and engaging in explicit behavior with 150 minors using online platforms, namely Roblox.
Media and non-profit exposés from 2020 to July 2024 revealed digital strip clubs, red light districts, sex parties and child predators lurking on Roblox. The National Center on Sexual Exploitation in 2024 labeled Roblox “a tool for sexual predators, a threat for childrens’ safety”.
Numerous criminal indictments from 2019-2024 allege that sexual predators groomed children in-game, ranging from 8-14 years old, then kidnapped, raped or traded sexual content with them.
Following years of scandals, we performed our own checks to see if the platform had cleaned up its act. As a test, we attempted to set up an account under the name ‘Jeffrey Epstein’…only to see the name was taken, along with 900+ variations.
Many were Jeffrey Epstein fan accounts, including “JeffEpsteinSupporter” which had earned multiple badges for spending time in kid’s games. Other Jeff Epstein accounts had the usernames “@igruum_minors” [I groom minors], and “@RavpeTinyK1dsJE” [rape tiny kids].
We attempted to set up a Roblox account under the name of another notorious pedophile to see if Roblox had any up-front pedophile screening: Earl Brian Bradley was indicted on 471 charges of molesting, raping and exploiting 103 children. The username was taken, along with multiple variants like earlbrianbradley69.
After we found a username, we listed our age as “under 13” to see if children are being exposed to adult content. By merely plugging ‘adult’ into the Roblox search bar, we found a group called “Adult Studios” with 3,334 members openly trading child pornography and soliciting sexual acts from minors.
We tracked some of the members of “Adult Studios” and easily found 38 Roblox groups – one with 103,000 members – openly soliciting sexual favors and trading child pornography.
The chatrooms trading in child pornography had no age restrictions. Roblox reports that 21% of its users are under the age of 9, a number that is likely underestimated given that Roblox has no age verification aside from users seeking 17+ experiences.
Registered as a child, we were also able to access games like “Escape to Epstein Island” and “Diddy Party”. We found over 600 “Diddy” games, including “Survive Diddy” and “Run From Diddy Simulator”.
Since September 2nd, 2024, third-party monitor ‘Moderation For Dummies’ has reported ~12,400 erotic roleplay accounts on Roblox. These include everything from “rape/forceful sex fetishes” to underage users “willing to do anything for Robux”.
Users seeking sexual experiences on Roblox are so pervasive that there are thousands of Roblox sex videos on porn sites, inviting users of unknown ages to make explicit content on the platform.
We tested out Roblox’s experiences to see what else kids were being exposed to. We quickly encountered images of male genitalia and hate speech in Roblox’s “school simulator” game, which had registered 28.9 million visits with no age restrictions.
The CEO is worth 7B+. 1000 employees at 100k/yr would cost him 100M - less than his net worth fluctuates on any given day and only 20% of other costs savings they have identified.
Executives care little about the stakeholders: the employees, the customers, the community. It's their company, too. They only care about investors and themselves. People who "own" pay a lower tax rate than those that "work". Let's fix that and make things great again.
I think you should reconsider the cost there. $100k/yr is likely well under the average for the people they're letting go. In addition, pretax salary represents only a portion, say 2/3 or so very roughly of what it costs a company to have an employee. Benefits packages and payroll taxes can cost a huge amount too.
This is 25% of their workforce; this isn't some sort of greed thing it's a serious cut to the companies operational ability due to the downturn of their product line.
Maybe he could destroy his wealth to keep the employees around a bit longer but it's better for everyone if they move on and the company has a legitimate opportunity to survive. Besides people don't want to be on corporate welfare anyways, they'd rather be part of a company where they can add meaningful value.
>Besides people don't want to be on corporate welfare anyways, they'd rather be part of a company where they can add meaningful value.
Funny. Those companies don't seem to be hiring. Everyone is doing layoffs. Maybe you said that wrong? People running companies don't feel obligated to employ, therefore everyone is now Someone Else's Problem.
As far as I can tell job postings in software are up this year. Executives love expanding, it's the most exciting part of the job. While there are many sectors inside software which may be doing better/worse, I can say my company is hiring, and I have no trouble getting interviews elsewhere if I want them.
I'm not sure if that's true? There are a few companies in every industry who pay well above average, and then most jobs pay a more normal salary (110-150 would be my estimate). Maybe you're just not looking at the top companies anymore? Even if it was dropping through I don't see how that's relevant
a product line that is still expected to make $6B this year plus a bunch of other massive IPs. Come on, if he can't keep the team together with that budget then he should step aside and let someone in charge who can.
The vast majority of people have to work in order to leave and for the same majority leaving employment is not easy and frequently not an option because they risk being unemployed for long periods of time. Or when they do leave the new place is even worse.
This statement is divorced from the reality of the situation and, frankly, sounds like it comes from a position of privilege. Most job markets are not like the software developer job market where we can just leave and expect to find gainful employment with better pay and better opportunities within a couple of weeks.
Is that not an admission that his poor management and lack of vision cannot foresee any way to make profitable use of those people's labor?
A company raking in 5-6 billion per year can't find any profitable bets to make? Possibilities to invest in? All they can do is cut?
LOL. If you're that bad at capitalism then please resign and let someone else give it a try.
Reminds me of PG&E. So bad at being a for-profit electric company they need constant state handouts to guarantee profits. They made bad contracts so they need a PCIA fee for not selling me electricity. Hedging? Severing contracts? Arbitrage? Forecasting? Never heard of those, now make with the free coin! My son... if you are that bad at capitalism shut it down!
I agree with Warren Buffet's take here. A company that cuts or can only pump dividends is basically saying "we can't figure out how to make productive use of people and/or cash". What an unbelievable joke.
There are (were) ~5,000 employees at Epic. That seems like a huge number for company that has produced little more than various flavors of Fortnite and a failure of a store in the last 10 years.
Do keep in mind: they also develop, maintain, support, and market Unreal Engine, which is possibly the most advanced and innovative game engine out there. It’s used by tons of other studios (including AAA) and is used in other industries like space flight, automotive, etc.
If you look at the technical state of Unreal Engine 5, then how modern GPUs can barely run games without frame generation which also makes them look blurry, then you are not surprised.
Its not just gamers but also developers who are fed up with the status quo of how games are done these days.
The big use case for UE moved from technical excellence to churning through people who can work on your game for hiring convenience, because you don't have to train them on an inhouse engine.
Its unhealthy to have this much fluctuation with hiring people, then if the game fails or succeeds (it doesn't matter), people are laid off anyway.
It is just mismanagement of the money they earned with fortnite, they failed to keep the momentum and stopped taking risks.
The technical incompetency doesn't stop with UE5, it shows in the store, which is laughably bad and inefficient since forever.
I think its good these people get a new chance to start working for companies who can put their skills and time to good use and value their expertise. Long term nobody working there would be happy with the way the software portfolio is moving downwards.
> ... they failed to keep the momentum and stopped taking risks.
This is a problem that infects all of the large studios now, from Epic to EA, Ubisoft, etc. My read on it is that it feels less risky to double-down on an exiting successful live service game like Fortnite or Rainbow Six Siege. That's probably true for ~5 years. After those ~5 years, it's far riskier to continue investing in the game than it is to start winding it down into maintenance mode while working on new titles or IP. The related risk is assuming that since the one title was huge that players are going to crave other titles in the same brand or franchise. For example, Ubisoft's assumption that Rainbow Six Extraction would naturally follow the success of Rainbow Six Siege.
These companies get addicted to the recurring revenue stream and pivot their businesses under the incorrect assumption they will last forever, at the expense of new projects.
There are three other submissions in the queue and likely more on this.
I know someone in Epic and they told me that its no secret inside Epic that Roblox is killing them. Why? He told me a story where a neighbors kid came by and wanted to play Roblox but he told the kid he didn't have Roblox. The child replied "It's easy! I'll show you!" and this 8 year old sat at his PC, downloaded a few MB client, signs in, selects a game and is playing within minutes. The game was a brain dead platform jumping game where you jump to the top of a tower. No enemies. No items. No anything. Just get to the top. Yay. At one point the kid fell down and the game offered to move him back to where he was for $3. Yup a fucking game hit a kid up for hard cash. The people who makes these games are child predators. Scum really.
Epics problem is Unreal can't be easily deployed like Roblox. You want to play Lego star-wars? You need to first download the base Lego game of 30GB then the 20GB Star Wars pack. A Roblox user just downloads a small client, signs in and is ready to play a stupid simple game that isn't 50+ GB. Unfortunately most of those games are not games but attention stealers that entice users to spend real money on NOTHING.
Shame that everything has been boiled down to an attention and money milking scam.
The difference is that Roblox has a thousand "attention stealers" which have enough gameplay and multiplayer fun to keep an eight year old entertained for a long time. Fortnite is just the same recycled concept over and over, with an interface that is difficult for a child on a console. There are a number of Roblox games that are genuinely well-designed and fun, don't let the graphics fool you.
(Also, eight year olds don't have $3 in Robux unless someone buys it for them, so blame the parents as well)
No, Epic's problem is that they saw Roblox's success and went "we deserve that too because we say so, let's go all-in on this market that is already dominated by an established player!"
Roblox isn't killing Epic, Epic is killing itself by desperately trying to steal Roblox's players when they have no reason to stop playing Roblox. Even if they released a 50MB Fortnite client that streams low quality assets like Roblox, it would be no different because those kids would simply keep playing what everyone else is already playing. Tim Sweeney making another tweet about his metaverse or whatever isn't going to change that.
It's a very straight forward letter without all of the usual fluff, which I appreciate. Bit it's concerning how much Epic still seems to be hanging their hat on Fortnite. Trends come and go and it seems unlikely to me that Fortnite will grow significantly in the future. It had its moment, they should be focusing on the next big thing.
Game is a little bloated and loads slow especially compared to Roblox. The other games are not as fun as the ones in Roblox either. Both have a lot of doo doo, but Roblox does have some neat indie gems. It reminds me of BYOND but in 3D. The launcher sucks, and there is nothing like Steam Input or RSS feeds for everything. I added steam RSS feeds for some games to my feed reader and I still use the client to check for updates for other games. There are a lot of small features that none of the other stores really have.
Interesting how not many comments talk about the game itself and how Epic may have driven their own players away with changes that players dislike. I’ve played for most of the life of the game pretty regularly and I’ve found myself growing tired of “yet another season full of movie/TV crossover junk”. You can tell they’re focusing on pulling money in via partnerships, and not paying much attention to “is this what players want”. Unsurprising you’d see player numbers drop.
500M in savings seems like huge amount. Just how unstable is their income? And just what else have they been burning money on to look at that sort of cost saving goal.
Is there any reason Fortnite should be a "forever game" like Minecraft or Roblox? I haven't played it since it's so Linux-hostile, but isn't it still just a battle royale game with a building element?
The Valve comparison is apt. The difference is Valve built Steam as infrastructure first, then quietly stepped back from games. Epic did it backwards — they built the game first, then tried to force the infrastructure (EGS) into existence with money. Much harder to do it that way.
That just makes people install it it doesn't make people buy anything. I have installed epic store but I never ever even thought about buying a game there, I installed it since they give me free games so I'd assume most gamers have installed epic store. But getting people to install isn't enough.
I remember when Steam was just something I had to crack to play HL2 as a broke uni student. In the intervening decades I’ve shelled out for over 500 games on Gabe’s little experiment. Wild.
Valve built more games than Epic in the past 10 years. Epic essentially only released Robo Recall and Fortnite + extra content, plus a spinoff of Rocket League which was an acquisition. Valve released a couple of duds (Artifact, Dota Underlords) but also some good games: Half-Life: Alyx, Counter-Strike 2, and Deadlock. They also did "The Lab" and "Aperture Desk Job" which, while not full games, were quite good as demos for their hardware.
I'm sure any studio would trade their entire decade of portfolio to get where Fortnite is. Sony did in fact basically do that to great failure (despite Hell divers 2 being very well received, it's no Fortnite).
Speaking personally, the move to unreal engine 5 ruined the feel of the game. Somehow it had a very unique and polished gameplay loop that was as addicting as CS and the unreal 5 launch changed it, at least for the hardware I was running
For context, they recently increased the prices of the game's cosmetics significantly to, and I quote, "help pay the bills" [1].
Apparently, that wasn't enough, and the billions of dollars in revenue the game makes every year are simply too little to keep the lights on. So now they're laying off over a thousand people and cutting several official gamemodes, so they can continue paying hundreds of millions to the creators of AI slop modes like Steal the Brainrot [2].
It's becoming increasingly clear that Epic Games is a dysfunctional company that simply stumbled onto a golden goose by sheer luck, and now that the goose can't lay eggs any faster to keep the line going up, they're panicking.
Fortnite is 9 years old this year. Epic brought in biblical amounts of money from just this one property over this time. Where and how did they spend this money?
Another case of reactive management leaving employees to bear the consequences of executive decisions. Forcing 16% job cuts despite years of financial warnings says a lot.
Not a single comment mentioning UEFN? Epic's failed attempt at copying Roblox?
Epic has been pissing money away paying "creators" to churn out slop "red versus blue" modes/maps for Epic's meta-verse.
A lot of these maps are effectively hello world applications. Like the lowest of low quality. You add in a few weapon spawns, a few prefab buildings, and you're done. Time to get yourself a few thousand a month.
Epic was very lucky with Fortnite. Originally they showed the game at GDC as more of a mining, resource collection and building game. Frankly it looked boring.
Changing that to a shooter with the Battle Royale mechanic was a $10 billion win. They have managed it pretty well, but it seems they just over extended without innovating to attract and retain players.
And yet somehow the stats show that most likely 2026 is easily on track to be a bumper gaming year, surpassing 2025.
Revenue wise they might be down from the 6bn in 2025 to somewhere in the mid 5's, so might as well get rid of 1000 employees while handing out bigger bonuses to senior staff.
Rumor is Fortnite was stuck in development hell for a decade and was used as a punishment assignment for under-performing devs.
The Fortnite team added battle royal mode on a whim after a mediocre initial release and it has churned out five billion a year in revenue every year since.
> "We're spending significantly more than we're making, and we have to make major cuts to keep the company funded," he said.
Sorry, HOW?!?
How can a company like Epic games with one of the most successful gaming products of the last few decades be losing money with a product that is so mature? Almost every other games developer would love to be in their position on Fortnite but they've somehow turned that into a loss making proposition?!? I'm baffled.
They aren't losing money on Fortnite, they're losing money on vanity projects like the Epic Game Store where they spend tens of millions of dollars for exclusivity deals with developers, and give away free games to try to poach Steam users with an otherwise inferior product. Unfortunately it is their employees that are paying the price of leadership making it rain with their overflowing coffers they couldn't help but burn.
It's still funny to me that they would rather burn 9 figures in cash on these silly deals to try and 'trap' gamers on their platform instead of just... I don't know... making a better platform? The reason nobody competes with Steam is simply the sheer number of integration and platform features that make it easy to buy, play and share games with my friends. It's not that hard, stop trying to 'force' me to use your platform. Just make it a nice experience.
> The reason nobody competes with Steam is simply the sheer number of integration and platform features that make it easy to buy, play and share games with my friends.
I don't agree. The reason I personally prefer Steam is that all my existing games are on Steam so if I keep buying on Steam I don't have to make and maintain accounts on other stores, if I keep buying my games on Steam I can keep using Steam as my only game launcher, and all my friends are on Steam so games with Steam multiplayer integration are easier to play if I too play it through Steam.
The Epic Games Store client and game integration could be significantly better from a technical perspective in every possible way, and I would not be interested in moving to it. Steam is good enough and switching has a massive cost. I can't really imagine much that would make me use the Epic Games Store other than exclusivity or the promise of free games. Though I would be more likely to just not play a particular game if it's only available through the Epic Games Store.
Another big thing is trust. With any of these digital markets I'm not truly buying games, I'm purchasing a revocable license. That requires a certain amount of trust that the platform isn't going to screw me over.
Steam isn't perfect: they initially had to be forced to offer refunds, and their item economy enables barely disguised gambling. But by and large they have behaved very predictably and consumer-friendly. Sometimes by outright consumer-friendly policies like generous refunds or labeling games with AI assets. But usually by just not doing anything greedy. Or as the meme goes: "Gabe does nothing. wins."
I agree. No company is perfect, but if someone asked me to name the most consumer-friendly large tech company, I'd say Valve. And honestly, I can't think of a second one.
The big "test" there for Steam will be when "Gabe goes away". It's gonna happen sooner or later.
I'm normally firmly against piracy, because I believe it to be morally equivalent to theft and I want to fund the artists making stuff I enjoy. But if Valve shreds my purchases when Gabe dies or retires, I will hoist the black flag on those games and not feel an ounce of guilt. As the saying says: if buying isn't owning, then piracy isn't stealing.
But we'll see. I hope it doesn't come to that. That said, I'm trying to change my purchase habits over to GOG because even if Gabe's successor doesn't screw over the Steam customers, eventually someone will. With GOG there's no possibility of the games I pay for being taken away from me.
They have shown its a wildly successful model. They would be very crazy if they changed it, and it would make them vulnerable to Epic and the Windows store. It's more likely that your OS/ hardware will change in a way that isn't supported by an old game.
Unfortunately, "this is a wildly successful model that prints money for us with almost no upkeep required" has historically not been a bulletproof argument when new management comes in and wants to prove themselves. Human beings are not necessarily rational and the kinds of people that tend to rise to the top of large corporations don't necessarily have the best interests of customers or the business itself in mind.
That being said, I believe that Gabe is taking his "succession planning" seriously, so I'd be fairly optimistic for the next decade at least.
One thing to keep in mind is that Valve is fully private so Gabe can not just be replaced by some random person by a board of directors like in other companies.
He probably already has a will set up that details how ownership should be transferred.
Isn't Epic private?
It is, but I'm not sure why that's relevant? xdertz's point wasn't, "Valve is private and therefore it engages in ethical consumer practices"; the point was "Valve engages in relatively ethical practices and because it's private, the board can't replace Gabe with a CEO who would engage in more unethical practices".
Not sure if this is relevant, but I have read reports[1] that Tencent currently holds a 28% stake in Epic Games. So private, but with unknown levels of ownership.
[1]: https://www.tomshardware.com/video-games/pc-gaming/trump-adm...
I thought he was already effectively retired. Not sure who's running the show now but the COO Scott has been there 20+ years I think.
I hate to break it to you, you're never buying any games, only licenses. If you don't like that, get copyright law abolished.
Even if you "buy" a physical "game", you are just buying a license.
I've rebought games on Steam I had on Epic for free, just because the platform is so terrible. As far as a metric goes, that's pretty clear.
It's definitely not about lock-in for me. It's everything from local streaming, to linux support, to cloud saving working properly, to 100s of other things that become apparent if you try to do anything other than launch a game in a bog standard way on a windows machine.
Same. Sometimes I will play a givewayway game on EGS and like it enough to e.g. buy the DLC. In that case I'll buy the game on Steam, just to buy the DLC there too.
Doing Big Picture Mode well is another.
Epic have had decades to get any one of these right, and yet they refuse to meet us even half way on a single point.
I have the EGS with games on it me and my kids actively play. I don't resent EGS for exclusivity deals nor hold any other kind of grudge towards them. If a game I want comes out first on EGS, I'll buy it on EGS. I don't actively play with friends, so who is or is not on EGS to play with is barely a factor on my radar.
I still prefer to buy on Steam if I can, because using the EGS sucks in every way possible compared to using Steam. If I want to sit to rest I can do it on a cold and irregular rock, but if there's a bench right next to it, then I'll use the bench.
That said, you can do a lot worse than EGS. MS Store I'm looking at you. In the above metaphor, you'd like sitting on the wet and muddy ground.
If Steam was run by EA I’d abandon it in a second though. All those games that are left behind aren’t super relevant since I already barely play them.
The big one for me is linux support, followed by steam input remapping. Input remapping, turbo, combo / chord buttons is incredibly important for accessibility.
agreed, the epic games store is crappy enough that i will not use it even for free and/or exclusive games. I might have if it was marketed as a clean, unobtrusive experience, but we all know that will never happen.
It makes sense that those with huge libraries may never want to move. But there are many existing and future PC gamers who do not have particularly large libraries on Steam, who would likely be much easier to lure if Epic actually made their launcher worth it.
You don't need to move stores, though, do you? Want to play a Steam exclusive? Fine, launch Steam. Want to play an Epic exclusive? Fine, launch Epic.
What you do need is to avoid tying your game socialisation to a _store_. Some day, Steam will be enshittified too.
But I don't want all these app stores!!
The ideal number of app stores I want installed on my computer is ZERO. I don't want to have to load a damn "store" just to obtain and run your game. I am willing to angrily live with ONE store on my computer, Steam, but no way in hell am I going to tolerate having to have an Epic Store and a Microsoft Store and an Activision Store and a goddamn Rockstar Store and an Ubi Store and a fucking Adobe store for Photoshop. I don't want to have to install store after store for each damn app developer on my computer, yet that's the way the industry seems to be headed.
I don't know why "zero" is ideal. That means going back to the old days where every single company would need their own launcher.
Having a separate company focus on distribution sounds more ideal.
Epic Games had an opportunity here to erode the app store margins through standardization, instead, they've become a copycat of what they resented with a slightly smaller cut.
Why would games need their own launcher?
Just install the damn game, ask if you want icons on the desktop as well as in the start menu.
OS handles it all for you.
Perhaps some multiplayer functionality and such makes sense to share cross-game, but I miss the bad old days of every game having a bunch of privately maintained servers and its own server browser list etc. You could eventually find a few servers that fit your playstyle and make online gamer friends that way.
The only benefit steam brings to the table as far as I can tell is making it easy to reinstall your library on a fresh PC.
Yea, that's another way games are terrible today. I don't want a launcher for my game. My OS is my launcher. I don't want a launcher, I don't want a store, I don't want a "helper," I don't want a tray icon, I don't want an updater. Why can't game companies just ship their game and that's it?
A very bad copycat
I mostly play games on a computer in my living room. It boots into Steam Big Picture, which I use to launch a game (or sometimes buy new games) using an xbox controller.
And yet Epic is shitty today.
It's both things, really.
But other platforms really are rather pathetic in terms of feature set compared to Steam. Steam has a bajillion features, and it looks like other platforms aren't even trying to compete to provide a good user experience.
> Just make it a nice experience.
Haven’t you been paying attention? That’s not how we do things in business anymore…
It's truly incredible how difficult business people make doing business.
Doing business is very simple, easy, and straightforward, but I suspect in a lot of cases the individual behavioral aspects of the executives get in the way of doing good business.
Direction and leadership is something that these companies never seem to get right.
>It's truly incredible how difficult business people make doing business.
And they're the ones making the most money and avoiding the layoffs.
Well, we might make it a nice experience until we've attracted enough of you people to have a network affect. And then it's a steady march of price increases, additional revenue streams (including selling your data!) and reduction in features because they were "too expensive to maintain"
Steam does. That's why they're the undefeated king.
This applies to everything. If you see a product category where users are legitimately unhappy; then enter it, build something actually good, you'll be the biggest and richest in no-time.
People hated steam when it launched but you needed it to play CS 1.6. It made installing mods easier. Then HL2 released, orange box, and they were able to get a critical mass as they provided platforms support for other games. Steam got better. It’s still not great but they have so much market share that basically any PC gamer already has it. Epic wants some of that money. The problem is nobody wants to install another store and they aren’t doing anything to improve gamer’s experience other than giving away games and having some exclusives. They’ll never hit the critical mass needed that way.
I still don't like Steam. I resent that I have to have this "Store" middle man on my computer just to have access to games. I want to pay a company for their product on their web site, download the installer, and install it on my operating system directly. I don't want this other layer that I'm dependent on, who could switch off my access to the things I "bought" whenever they want.
Steam has multiplayer integration so you don't have to connect by IP to play indie games, that is massive. So many people either don't have access to their router or don't have the skills to configure it to play multiplayer without steam without having a server middleman which most indie games wont have.
Then steam reviews are the most accurate reviews there are for how likely you are to be happy with the purchase. I am much more hesitant to spend money on a game where I can't see the steam reviews for, so there is basically no way I'll buy a game on epic store that doesn't exist on steam since I am basically buying it blind.
With gaming on Linux, steam fixes so many middle issues. I can download a game and it just works through some combination of WINE and voodoo magic.
And all game controller even works!
Steam is a serious value add on Linux.
GOG/Humble Store/Itch is for you then.
With the added downside of less choice and/or delayed releases
Looking at what many of your games do I think it is better option. I have zero doubt that there wouldn't be countless downloaders and accounts and poorly written startup menus for each game and each publisher both big and small.
Simply getting installer would not be option for most games.
I mean, steam does install the game and you can run the executable, but yes, there is a level of trust that it won't delete the game or some such.
I vaguely recall Half-Life 2's launch being pretty problematic.
I started using Steam in 2007 and it was fine. In 2006 there was still some residual animosity towards it but I think the tide had well and truly turned since the early days (and I think there were a handful of third party games on it by then too which I guess was something of a vote of confidence - a few were Source engine titles so they may have got a discount or kick-back from Valve, but not all were).
> People hated steam when it launched but you needed it to play CS 1.6.
I thought CSS was the first release on steam beta? I remember playing the crap out of it, then the actual steam release happened, and it somehow turned into a laggy buggy hunk of crap for months.
No, it was 1.6 that was on the Steam beta. That was years before HL2 and CS:S were even leaked let alone released.
Not sure of the exact history but pretty sure Steam was launched as a beta in 2002, or maybe 2003. In September 2003 or so the database was wiped and Steam was launched, again with probably only Counter-Strike available.
Counter-Strike Source was launched some time in 2004 and then Half-Life 2 came along in November 2004.
Steam dropped basically alongside team fortress.
I mean, people really didn't hate it. There was some grumbling about digital and not having a cd, but by and large people liked it as soon as they had broadband.
it was pretty meh back then, so people had pretty understandable reasons. it made LAN parties harder for example :)
but it got a lot better.
Epic had more money and time compared to Valve. and their store is still worse.
sure, Steam has an enormous moat, but that won't be the case forever, Epic should be ready with a nice platform to exploit niches that Valve misses
instead they hemorrhage money on things that does not make their fundamental position any better.
Indeed people behave as if Gabe would live forever, or Valve's management will always take the perfect decisions.
Eventually like it comes to all of us, there will be time to a new generation of game stores, or gaming devices.
But it won't be Epic unless they change their attitude.
Steam has a lot of issues but there are too just lots of areas where better products don't win out over inferior products, that's just not how the world works for lots of reasons.
Updating games on HDDs on Steam takes ages; I often see the download complete but then wait another 30 minutes for their diff to complete; and that happens with 10-20 games every week when they have big updates (10GB+). Just for this one thing I would switch elsewhere.
That's what's happening to Windows as we speak.
Steam was first to market and it took forever for competitors to form.
It being a good service is secondary.
If Valve started to routinely do Bad Things on Steam they'd be gone pretty quickly. Many would go to GoG, some just stop buying games. Bad Things do occasionally happen (bad things like those "oops, we don't actually have licenses for the music used in the game you bought" revokes), but Valve keeps succeeding in keeping it to a rather low background noise level. Competitors have two decades of being that good or better to catch up. You can't buy trust, you can just put money into not losing any of the trust that grew over time. When competitors have done that for two decades, Valve, unless they fail in the meantime, will have even more.
I heard the same thing for Discord last month, and reddit and Twitter a few years back. It kind of worked for Twitter due to be outstandiningly bad, but it still didn't "kill" Twitter in the colloquial sense.
I don't see it going down any differently with Steam. It may take a dent and open up a competitor, but it won't do a move so catastrophic that it losses its leader status from that alone.
Which of them are privately owned? In a publicly traded company, there's an inherent logic that people who believe that the company can get by with squeezing customers a little harder will end up with higher projections than those who think it's better to get by with a moderate approach. Price goes up with the bids from the squeezers and occasionally a moderate will sell until eventually the squeezers own an identity-defining fraction. Valve only is what it is because of the ownership structure, its closeness to being bootstrapped (I assume that in reality ownership is a little more complicated, but close enough)
We could also call those squeezers "optimists", and publicly traded implies ownership by the most optimistic (well, the most optimistic who have money to invest). Leading to behavior patterns that could be described as suicidally chasing the most unrealistic money making projections. (and founder majority stakes are surprisingly susceptible to falling in line with those optimists, because those owners still don't want to see their valuation going down, doubly so of they ever started borrowing against their stakes)
"pretty quickly" is a few years, not one month. Chrome dominated the browser market pretty quickly even though the richer bigger company microsoft already had most of the browser marketshare, and that was 3 years. Before those 3 years it seemed like nobody would be able to make a dent in microsofts monopoly, and then it was gone in just 3 years.
If steams fumbles as hard as microsoft did with internet explorer they too could be mostly gone in 3 years, replaced by a giant competitors product.
The Reddit blackout is coming on 3 years old now. The twitter kerfuffle is almost 4? I'm not holding my breath.
And yes, chrome is a great example. That came right on the legs of Microsoft losing an anti trust case. For something that seems so quaint in 2026. I miss when regulations had teeth.
> If you see a product category where users are legitimately unhappy; then enter it, build something actually good, you'll be the biggest and richest in no-time.
In what role-playing game?
Not with that attitude!
Demanding it is how Steam came about!
only if you're publicly traded
> It's not that hard, stop trying to 'force' me to use your platform. Just make it a nice experience.
I feel like this is good advice, and should still be a pillar of building a business: prioritize customer satisfaction, and your happy customers will become repeat customers. But I don't think it's enough. Epic tried to launch a store in 2018, 15 years after the launch of Steam. That's 15 years of customers buying their games on steam, building a friends list, and getting used to making Steam their PC gaming "home." How do you convince someone who might have hundreds of games tied to one online account, that it is in their interest to open a new online account with a new merchant and start over from scratch? Your experience can't just be nicer, it needs to have some level of appeal that convinces customers to peel themselves away from whatever platform is their current default.
I don't have a good answer for how to accomplish this. Epic tried it by paying devs for exclusives and freebies, litigation, and a PR campaign that Valve and Apple and Google were ripping people off. Their approach was hostile and didn't prioritize making a nice experience, and it seems to have failed. But I think these platforms are sticker than we give them credit for, and just making a nice experience isn't enough.
15 years is not some insane gap that you can't get around. The biggest issue is that the EGS is just an inferior experience compared to steam, that's simply it.
If Epic games really wanted to start eating away at steams market share, they would do one thing. Make EGS not shitty for the user
15 years is a humongous gap. Almost an entire generation. Do you expect to make a Facebook killer in 2022? A WOW killer in 2017? Make a DOTA killer right now?
There's so many people who aren't even your market, they are an "one game player". You can't target that realistically unless that one game shits the bed.
Tik Tok is arguably a Facebook killer.
Roblox is in some ways there, I think Epic thought fortnite could have competed. IMO they made a strategic mistake in shackling their game-as-a-platform to Fortnite. I thought the music fortnite thing looked interesting, but I have negative interest in installing Fortnite.
Call it something else and make it literally the first thing you see on epicgames.com, have it work on mobile, and maybe things would be different today.
(Aside: Roblox wins because I can go from typing in roblox.com into my browser and be playing a game with a friend in under 20s)
Instagram was a Facebook killer until Facebook bought it.
Snapchat was a Facebook killer until Facebook bought a VPN service and tracked every user without consent then stole half its features
I guess you could say LoL is a DOTA killer since its significantly more popular now, although some of that is likely to do with the Russian/Ukraine war
Giving actual compelling reasons to get users on your platform is the only way and the best way and that isn't really a function of time. TeamSpeak, Ventrilo and Mumble got eaten up by Discord and also most game forums
One of the biggest issues with all these stores that are other than steam is that they suck in terms of UI/UX and they are HUGE resource hogs, I am more inclined to kill off the epic games launcher from running in the background because it taking up gigabytes of my system memory and that annoys me
Steams's UI is also meh and is also a resource hog. There's a good reason I don't keep any launcher running at startup.
>Giving actual compelling reasons to get users on your platform is the only way
And sometimes there is no compelling reason. People may only want 1 or 2 things and they bias towards what they are familiar with.i suspect that's why Twitter is still technically a market leader (despite falling apart behind the scenes).
I also think it's really funny that talk about offering a good platform then mention an example where the market leader just gobbles them up.
> How do you convince someone who might have hundreds of games tied to one online account, that it is in their interest to open a new online account with a new merchant and start over from scratch?
I haven't play a PC game in a long time, so don't have any experience with the modern game stores and playing downloadable games.
I understand that these stores are more than just places to buy games--they also include extensive social media aspects.
But surely you don't have to give up one store if you make another account on another store? If you are on Steam and have a large friends list there and want to try a game that is only on some other PC game store couldn't you send a message to your Steam friends saying you are going to try that other game and asking if anyone else wants to come play with you?
If you meet people in that new game and want to be online friends, just point them to your Steam account and say that's your main gaming social media site, or point them to some non-gaming social media if you actively use any and they aren't also on Steam.
Freebies and discounts helps get people in the door. Having an experience that people don't hate might keep them there.
I don't buy a lot of games, but when I do, I don't usually look at Epic. I'd rather buy on GOG or Steam. Steam is probably from inertia, but if Epic provided a better than Steam experience on the games I've gotten for free, than I might consider it. I don't really know what would qualify as better than steam though... maybe faster startup, less dumb prompts?
I don't even consider buying games on the Microsoft store though, so Epic has a leg up --- if it's sale season, I will look to see if Epic has a bigger sale than Steam.
> Your experience can't just be nicer,
No but it has to be at least nicer and they didn't manage that.
Why did they need to make a store? Seems like there was no need for it...
Why does anyone need to make a store? Walmart and Target both exist. Generally, consumer choice and industry competition are considered good things that drive innovation and the nicer experiences we're talking about.
Interestingly both Walmart and Target opened in 1962. There were other stores by then, so I guess there was no need.
Maybe they saw the 30% cut Apple and Google were taking on their app stores and wanted in on the action?
The litigation angle to legitmatize a mobile storefront was smart. Having a company able to offer premium mobile games with a proven track record could have had it stand out from Steam, or at least open on an untapped market.
But it seems that gamble slowed as the economy did. Worse yet, China and Korea have gotten much more attractive to get people into their casinos. Competition is stiffer than ever.
One of the more fascinating parts of the Xbox plan of attack for its new console is its apparent marriage of Xbox, Steam, and Epic among possibly others in a unified console experience. Having a true console like experience with a variety of PC game stores plugged in I think is a rare lane available for Xbox to try and do something other than reproduce Steam but worse, and I'm curious how it's going to go.
This being microsoft, my expectation UX wise is that similar to those Xbox ROG devices you'll have to drop to the windows desktop to install updates, and they'll probably also throw in some copilot to help you through the process. I don't think they have it in them to innovate here and make it pleasant in any meaningful way
Yeah, I agree. There are certainly engineers at Microsoft who are skilled/talented enough to do something cool. But it doesn't matter if the business people will just saddle them with bad requirements that drag the experience down.
My guess is it doesn't go well -- with Gamepass they've taught Xbox gamers not to buy games, and with Steam integration they've given Xbox gamers a competing place to buy games (where Microsoft will pay a percentage to steam!)
It'll probably turn a division of Microsoft that usually loses money into one that loses...more money.
I can run Epic and GoG games in Steamdeck. All Steam had to do is not block them.
Right and itch.io and much besides. However, these integrations are janky and not built in as first class console experiences. Not that they need to be necessarily, I think having the steam store is enough in many respects. But for me, the dream is being able to browse and install games from itch.io with the same convenience as steam itself. So there's at least notionally and unclaimed lane for providing that kind of experience. It's the only available Lane that I can think of for out-Steaming Steam.
Does Itch have a CLI for installing the games?
From Heroic's FAQ, that's the first step for adding support to the store.
https://github.com/Heroic-Games-Launcher/HeroicGamesLauncher...
Not exactly first class, but one step away.
I think if it were a good plan Phil Spencer would still have a job.
You're not wrong, at this hour success is as much about picking up the pieces from one of the singularly worst disasters of brand confusion we've ever seen. Even this attempted recovery is a bid to get into the lane now owned by Steam.
The SteamOS is capable of getting out of the way, which is something Microsoft is pathologically incapable of designing Windows to do. And these days I think Linux and the Linux desktop are just objectively better than Windows, and the days where Windows embodied what it meant to have when anything goes PC are long gone.
So you're left with limited options. I think a first class console experience for a wide range of storefronts is the best bet to out-steam Steam but it assumes a degree of execution capability that I don't trust Microsoft to have.
As much as I love steam, some of this isn't even a high bar. I've always had issues with stuff loading slow or odd behavior on the steam store tab in the application. My understanding is it's because the store tab in the steam application is essentially a web browser, and it sorta works like ass.
It does use Chromium.
Any web browser can seem slow vs a native app, though.
I like having a huge library of games on epic-store but when I try to buy a game there - because they're having a sale - its a pain to find games. Steam's search isn't top-notch either, but its 1000x better than epic's.
For example. I search for "roguelike" and it brings up 1 single game (which is coming soon). There are few tags on games. No way to refine a search. In fact they have a category called "rogue-like" which has a lot of games, but somehow the search just misses them. There's no way to refine results by popularity or most sales.
I suspect this is all an intentional design philosophy of epic, a way to have a lot more control over what the user sees than steam, because its so bad it doesn't make any other sense.
Also for some reason their store takes a LOT longer to load than steam. The game library UI is much worse. Pretty sure there's no easy way to mod games through the epic store or see dev updates or talk on a forum or submit bugs. Just so bad.
I can't help thinking the battle was lost before it even started, no matter how good the offering was because the PC and mobile platforms (where epic operate their store) have 99.9% already decided who owns them. The way I see it Epic wanted to copy what Counter-strike and HL2 was to Steam, but using Fortnite to push their store for a fresh generation of gamers. The problem is they couldn't replace or exist alongside the incumbents while trying to bring in more than a trivial amount of income. The only way I can see the outcome being different is if they were in the position Valve were in around 25 years ago with a fresh or poorly served market or something other than video games, few remember Stardock Desktop as a place they got their games.
Epic games goes out of their way to be hostile to Linux users. I'm at the point where I just ignore windows only games. And I'm the exact type of person they'd want to convert cause I tell all my friends about my gaming experiences. They could even take proton and use it in their store.
This is basically my opinion as well. There are enough games that run on Linux that I don't have time to play them all, so if the game is windows only I skip it.
The steam chat app is kind of terrible and there was a Linux UI bug that caused UI lag a few years ago. Epic Games just can't replicate the goodwill.
They could totally carve their niche if they focused in making their store better.
Could it surpass Steam? Probably not. But you don't need to surpass Steam to have a viable, profitable store. GoG is the alternative that proves the rule - it is smaller, but they have their niche offering.
EGS is shit, and relied on exclusives (which everyone typically hates, especially on PC).
IIRC GoG has a pretty poor history in actually turning a profit with the exception of when CD Projekt release on of their own games, and even then they do the vast majority of their business on steam or the console stores. If GoG was a decent money-spinner then CP projekt wouldn't have split if off. Even a niche has a cost to operate, and that's with GoG being a pretty plain service on top of game downloads.
GOG was bought out by the founder precisely because it became a decent money-shredder after CD Projekts were merged.
Yeah GOG for me fills a niche - old/classic games with no DRM. I realise that I can get them mostly from Steam but I support GOG and their goals.
The irony here should be lost on no one.
The the lawsuit with apple:
https://en.wikipedia.org/wiki/Epic_Games_v._Apple
The massive set of fines...
https://www.ftc.gov/news-events/news/press-releases/2022/12/...
> Just make it a nice experience.
That might get in the way of greed and hubris.
Anyone else find it interesting the massive set of fines financially lines up with their "Savings findings"?
> together with over $500 million of identified cost savings in contracting, marketing, and closing some open roles puts us in a more stable place.
I think sweeny is an awful person overall. The lawsuit against apple and google is a net positive for consumers though. Having someone as big as Epic stand up to these digital silos is a good thing.
Assume for one moment that they were all great people over there.
I suspect that they would STILL be in the same boat that they are in. You see a silo where I see a service provider.
Does apple make money on doing what they do.. You bet.
But the lesson here is that they make that money because of scale, and without it replacing payment processing, fraud management, and the customer service you need with it is a HARD problem. Epic needs more than Fortnite to justify running all that on their own or it's going to turn into a black hole: because payment processing for "digital goods" is a nightmare.
I suspect that both apple and googles extension into payments at point of sale, has contractual ties to their App Store payment processing. Something Epic will always lack.
The real pain in the ass here is the incumbent card processors, and their fee structures.
I suspect that the industry is going to need to go back and re-visit micro transactions in the coming years.
I think he's still at heart a developer. That's why all his initiatives that aren't Fortnite are so developer friendly.
But he still is a CEO. So there will naturally be some evils he seeps into to make the company (and himself) richer. He still has his own interests, but my second hand experience is that even these layoffs are relatively respectful compared to most of the industry.
I recognize that CEO side. But it's a real shame many people mostly turned on him in order to defend Steam. Steam sure isn't a saint either.
Steam is actually not that good as an application. It’s slow, it’s full of ads, the UI is complex …
But they are the Amazon of gaming : it’s a no brainer to buy games because you know you won’t get issues being reimbursed if it’s needed. Also SteamOS/Proton/Steam Deck are nice.
And EPIC managed to do worse than that.
I do feel GOG Galaxy could become a threat to Steam someday if they added official Linux support and a full screen version but last time I tried it it was pretty buggy.
Not only does Epic refuse to make their game store any better, Tim Sweeney will continue to whine about how Steam's 30% cut is way too much. Surely if it's too much, Epic Games should be able to provide the same service for their cut? But no, they continue selling a moped while saying how all of the motorcycle manufacturers are ripping you off.
And lets not forget Tim Sweeney's dishonest representation. Sure, Steam can take a 30% cut, but they also offer a lot of avenues to avoid that. With Steam, a publisher can get a ton of activation codes and sell those activation codes on their site and not get hit with the 30% cut. No fee on in-game transactions, and as you build a user base for your games, Steam also lowers the 30%.
Last I checked the Epic Games Store doesn't even support Linux - the new gaming frontier.
Network effects disagree, sadly. You don't get market share from the leader by simply "being better". There's way better netowkrs than Facebook, Twitter, and Reddit out there. But some habits are as harder to break than they were to form.
I don't disagree with what you're saying. But for technical platforms it needs to be a combination of both. Discord is the perfect example of this, plenty of people I know of were completely fine with their Mumble/Teamspeak/Ventrilo setups, and in a lot of cases some of those were better than what Discord was offering for individual features, but the overall feature set and platform ease-of-use that Discord was offering drew in a large initial user base which then created the network effect you describe. A lot of my friends feel 'locked in' to Discord now and with their age verification roll out fiasco a lot of people want to leave, but there isn't a single offering that matches Discord's platform features and integrations. There definitely needs to be an incentive to leave sometimes and break away from that network effect, but if there's no actual competition then obviously yeah you're always going to be stuck.
Let me make a disclaimer, I don't if it is true as CEO speech truthfulness seems to be made by ai.
But once I saw the interview with the guy from epic or someone big there, I don't remember and they said the money for developers was from marketing campaigns which makes sense to me. They said that they wanted to make a better experience so the developers themselves would try to help being people to the platform but that never happened.
It seems that the technology behind the epic store is, epically broken, pun intended. I've read somewhere that they tried to decouple chunks of the store and restart but the thing was so poorly done that it would be more expensive than just let it fade away and at some point they had a new epic store 2 created from scratch but to develop it to the end would be too expensive.
As a swe myself, maybe they were trying to scale to steam level before being steam? I don't know.
My last experience trying to use epic was trying to buy a game. But being greeted by a store login, then a loader of a store then a initial store that tried very hard to sell me call of duty and EA stuff. I found whatever I was trying to buy but I couldn't due to some bug in the payment.
And never again. Not for any particular reason. I just didn't spend more time there.
And now, with these layoffs what are they going to do? Are they revoke all the licenses for the games they gave and sold?
The main feature they don't want to add is making it easy to tell when games are crap by user reviews
I bought a game on Epic once but I ran into some problems. Epic doesn't have a community so I had to ask for help on the Steam forums..
Can't escape the feeling that Epic just want to sell games without engaging with their customers much.
I think you’re massively underestimating the network effects in play. Steam has an enormous moat.
Steam has been around for 20 years and gamers really, really care about their Steam profiles.
Valve has created a kind of gaming Facebook.
You can't replace that.
I don't care about my Steam profile. I do care about the convenience of having all games in a single "launcher" and seamless Linux compatibility through Proton.
A big reason it feels like nobody competes with steam is that if you want to sell your game on steam it can't be cheaper elsewhere. So any other store can't compete on price.
If you don't sell your game on steam you are missing 90% of the market. So as long as Valve continue to make steam good enough, nobody has an incentive to switch.
It's an abusive monopoly. Steam take 30% of revenue from developers and Epic take 12%, but the prices can't be 18% cheaper for the consumer without giving up 90% of the market!
That isn't true though. The only restriction is if the thing you're selling on that other store is Steam Keys themselves.
Are you seriously blaming Steam for game developers setting the price of their games the same on all platforms? They're the ones pocketing that 18% difference by the way and that 18% difference is literally the selling point that is supposed to lure in game developers to the epic games store. There has never been a promise of cheaper games.
The "most favored nation" pricing you're complaining about being abusive refers to Steam key sales on third party platforms and that pricing exists for a blatantly obvious reason. How much of a percentage does Valve get from that sale? 0%. Absolutely nothing. The developer generated keys are free and Valve will still pay the distribution costs (storefront, downloads, multiplayer, etc) for you. If it was possible to sell a Steam key cheaper on another platform, then nobody would buy Steam keys from the Steam store anymore, which means their revenue would tank to zero, which in turn means they would have to cancel free steam key generation, duh. Valve is being extremely accommodating here and you're twisting it into its opposite, which is pretty disgusting.
The problem is the Steam Distribution Agreement isn't public so I don't have a way to prove if this is true or false.
At the same time there are articles like this https://www.bbc.co.uk/news/articles/cx2g1md0l23o on the bbc claiming a tribunal ruled a case can continue against Valve for "forcing game publishers to sign up to conditions which prevents them from selling their titles earlier or for less on rival platforms".
The website for the law firm clearly states the price parity is not just for steam keys https://steamyouoweus.co.uk/the-claim.
If there was no evidence it would be thrown out. But until it concludes who knows what the truth is.
> Unfortunately it is their employees that are paying the price of leadership making it rain [...]
Epic's employees reaped the gains while it rained in the form of paychecks. While it sucks that people are losing their jobs, those individuals received (much of) the upside of this investment and their jobs never would have existed in the first place had the investment not been made. Their paychecks are not being clawed back. Shareholders (including executives who are largely paid via out-of-the money options) are bearing the costs. Consumers also benefit from increased competitive pressure on Valve and subsidized game prices.
Would it be "better" if Epic had not invested in the Epic Game Store and paid a dividend or conducted a share buyback?
For what it’s worth, Epic is a private company and employee upside has been capped in the sense that compensation has been mostly cash (and not Netflix tier cash). Exposure to equity may been a better way to share in upside and ensure some buy-in.
IMO investing in a marketplace was fine, but hemorrhaging money for 7 years on non-performant software + free game bundles is probably not defensible from an executive standpoint.
In my experience the buy-in you get from employee stock programs scales inversely with the head count. I worked for a huge company that gave out stock options. Nobody was really motivated by the stocks, because the company was so large your individual contribution meant exactly nothing unless you were at least a VP. A vesting bonus of some kind would have done just as much.
In my experience, the Epic Games Store downloads faster, installs more efficiently, and launches games faster than Steam. The social features I actually use (i.e., add a friend, join them in a game) work fine. I'm not aware of any features Steam has that EGS lacks that I actually use frequently (Valve's VR, streaming tech, and Proton are great, but I don't use those frequently). It's not just me, many indie game developers are also big fans of EGS (most recent example that comes to mind are Jeff Kaplan's remarks during his 10 hour stream a week or two ago). Gamers' vehement defense of what is effectively a monopoly continues to confuse me.
Nearly every time I add the free EGS games to my cart the checkout fails. I frequently have to restart the EGS client for checkout to work (and even then it fails often).
I launched EGS just now to time some comparisons and it's a black rectangle on my screen with no GUI (probably self-updating). I had to kill the process and restart it.
The Look and Feel for the EGS client just feels slow. Not that Steam is always amazing in this regard either but it's way better than EGS. Go to your EGS library and click between "favorites" and "all games". Switching from favorites to all games takes me ~4 seconds, every time (if you have any meaningful number of games).
The search/sort is slow. Steam's feels instant.
The library list has a ton of wasted space. In terms of vertical space, the Steam library lists three games for every game EGS lists.
The EGS social features compared to Steam are downright anemic (and Steam is pretty bad compared to something like Discord). You can't even set an avatar in EGS. Even EA's Store app (whatever they call Origin now) lets you do that.
I'll stop there. I could rant for much longer.
One thing that steam does better than any other place is create an incredible store experience to sell games on. I don't think any other game distributor has an algorithm as good as theirs, and all the integrations and hookups that come with it. For example, Nintendo's shop page for each game is sparse in detail and lacks so much information buyers have access to in that game's Steam page counterpart. The store search and other store views display games far more efficiently than nintendo's search and store views, making it much easier to find what you're looking for in fewer clicks and fewer minutes.
if you have the time, try to find a game on nintendo vs on steam. Don't google for the pages, go to their base shop page and start from there. Try to avoid directly searching the title, instead search for keywords as if you're a gamer trying to recall a game suggestion you heard from a friend like 2 weeks ago. You'll notice the plethora of differences that combined puts steam on a whole other level of sales and content distribution if you go about it like that
EGS doesn't even have a Linux version.
Steam is always going to be my first choice because Linux support is better. If I buy on Steam I know it's going to work.
They could at the very least just package it up to run with Wine, but Sweeney is stubbornly set in his linux hating ways. I could use their store through the Heroic launcher, as I do with GoG, but I won't because fuck you Tim.
If we're being realistic from a business standpoint: Linux is at best, 3% market share. A very passionate 3%, but 3%. Using resources to support such a niche sector is a hard sell.
3% of millions of people is a massive number of people. Given how easy recent work on wine has made porting from windows, it's really hard to defend not having a linux version, from a business standpoint.
This argument would be a great one in 2016.
Now though, proton/wine works more or less for everything, and the storefront is a web based one anyway.
I'd hope this community of all places would understand that "just integrate X with Y" is never as simple as "just". It's still something a team needs to do, and the gain is minimal unless Epic is also going to try and make their own console-esque device. That's the incentive for Steam.
Going by the Steam hardware survey, 3/4 of Linux users were not using Steam Decks when they got polled. So I’m not sure if a console-esque device is actually required. A large part of the reason why Linux usage is growing, is probably that it mostly just works these days
https://store.steampowered.com/hwsurvey/Steam-Hardware-Softw...
Valve started this to have a path towards independence from Windows, just in case Microsoft had locked things down. Not for making devices.
The same rationale exists for Epic, and they have spent an enormous amount of resources fighting Google and Apple over this.
I think it's an ideological decision rather than a technical one.
Yes, and no.
Yes, it's not the most optimal business decision as a software company to invest in hardware. The clear move is to either grease Microsoft's palms, or let then outright acquire Steam (or Valve as a whole). Valve not doing that is either in part ideological, or part very long term thinking on the best financial path later, instead of now.
But at the same time: while the ends was "be independent from Microsoft", their means at first was very Microsoft esque. Partner up with hardware vendors, make some Pcs with Steam built in, and brand it as such. Didn't work. Their goal had to be to roll their own hardware because that's what was needed to get the ball rolling (as well as a form factor that accompanied a desktop instead of competed against).
The problem for an also-ran app store is that you need every user you can find.
Linux support may not be a huge deal in the overall market (although it's growing due to the steam os devices) but it's just one more element to Steam's moat.
It's a glorified wrapper around curl, wine and a webview, a few interns could knock this out in a few months. For "3% market share" (growing every day, thanks to Valve) its a no brainer, but Sweeney has no brain.
That glorified wrapper is made on Unreal Engine.
What's the problem? Wine can handle that fine. Heroic launcher showed that you can easily make an Epic store wrapper and launcher work on Linux.
How is steam a monopoly? People would be excited for EGS just like they are for GoG, except EGS has a track record of anticonsumer behavior.
I fear for valve in a post gaben world, and they certainly aren't blameless. They also aren't a monopoly. Hell, steamOS is the opposite of a locked ecosystem.
>How is steam a monopoly
It has 90% marketshare and has been shown to use its monopoly uncompetitively to force price parity on devs. Textbook definition.
>People would be excited for EGS just like they are for GoG,
People "like" GOG. I woildnt say they are "excited for it". The revenue of GOG these years don't reflect the supposed enthusiasm.
>EGS has a track record of anticonsumer behavior.
Anticonsumer isn't anti competitive. Especially not as a new player in the game. They can't brute force this stuff with money like a trillion dollar company could.
> Hell, steamOS is the opposite of a locked ecosystem.
I'll believe that when they release a full distro with all the feature the Steam Deck enjoys.
> Gamers' vehement defense of what is effectively a monopoly continues to confuse me.
It is a monopoly but that can be a good thing sometimes. Steam is really good! Is it 30% cut good? Maybe not but I do think Valve has managed to keep Steam good for a very long time and if they lose their monopoly they're going to have a strong incentive to fuck things up.
Another example is WhatsApp. Sure, sucks for Google and Apple that WhatsApp have a watertight monopoly in most of Europe (and probably much of the rest of the world; I haven't checked). But it's pretty great for actually users. We've had at least a decade of totally free messaging that everyone has with no ads and e2e encryption.
Meta are just about starting to fuck it up but it's been a pretty great run.
Why would Apple care if WhatsApp has a monopoly? They don’t make money from iMessage
Network effects on iMessage mean people buy iPhones
That must be why they're so happy to open up iMessage to Android in the US!
iMessage works fine with SMS and RCS. How would “opening iMessage” benefit Android users?
> iMessage works fine with ... RCS
...because europe forced it to be...
Actually it was China…
https://appleinsider.com/articles/24/02/19/apples-new-rcs-st...
People are generally okay with monopolies as long as they feel they're benefiting from the monopoly instead of being taken advantage of.
Epic garnered a lot of ill will with all the early exclusives. If I have part 1 and part 2 of some franchise on Steam, and then part 3 comes out as an Epic exclusive, it's going to irritate me.
In my experience, the Epic downloader would frequently lead to degraded performance and/or system instability when I'd leave it running; I've never noticed such problems at all with the Steam client.
For about two months Epic Games Store kept switching me to a different language and currency.
None of those languages were familiar to me, and there was no VPN/proxy/etc involved.
If this were true than Epic would have eaten Steam's lunch.
or network effects are keeping people on a worse platform?
That's a weird way of saying "lack of competition". As others have mentioned, why should Epic Games bother supporting Linux?
Considering that I'm gaming on Linux, the number of competitors is pretty small and close to zero, I'm not sure why I should be forced to switch operating systems to support the "better platform".
I say this as someone who's been running Vortex/Skyrim modding on Linux years before there was official support for it and I'm kind of shocked honestly to hear that people are cheering for something I did so long ago (5 years to be precise) I hardly remember the time doing it.
I try out the Launcher every couple years to see if it's improved. I just installed and logged in for the first time since 2023.
Looks like they have finally fixed lag and freeze jank that occured on every action, blocked scrolling, and etc.
Unfortunately just clicking on the "Featured Discounts" items on the store home page.. 3-4+(more like 4-5+ on further testing) FULL seconds of blank until the game details load. An ecommerce site where the items take 3-4 seconds to display!? I flipped over to Steam and everything in the store loads "instantly".
Sigh, I'll check back in 2028.
Edit: It boggles the mind and defies reason that they can't get a handle on table-stakes UX after all this time, energy, and hundreds of millions of dollars sunk into it. Nepotism; gotta be, yeah?
The major feature that EGS lacks and which makes it appealing to indies and repulsive to gamers is user reviews. User reviews are a major influence on consumer choice; and Steam even shows recent vs long term, which signals if a recent change was received well or not.
User reviews, guides, discussions, workshop and shared screenshots and videos: bold social features that are an incredible source of agony for mediocre and bad indie games.
Gamers complain about layoffs, but the largest invisible cause behind them is Steam’s 30% cut, which nobody acknowledges.
A truly fascinating part is that feature and quality-wise EGS is still, after years of development, miles behind Steam.
Epic likely has talented devs and clearly invests a lot of money into all of this, but it took them years to finally implement a cart. It's not the end of the world to not have one, but not if you are a digital store!
It doesn't even have (or at least didn't the last time I checked) a review system. Steam isn't just a store anymore- it's closer to a social network with communities, discussions, mod workshop (which makes it stupid easy to install mods if a game supports this). With forums dying and reddit turning into whatever it is turning into, Steam forums is IT for a lot of gamers. If I see a game on sale the first thing I turn to is a review section- more often than not it's enough to gauge whether I'll buy this thing or not. And it's a nice place to ask whenever something in the game bugs our or doesn't work, or to just vent.
EGS is (or least was) really damn slow to start (never mind to launch an actual game). Linux support is non-existent.
Sure, it is extremely difficult to tackle a leader when a headstart is this large, and when people already have massive libraries of their own on Steam, but it's been what- 7 years of development? Epic had a clean slate, no compatibility to worry about and all the features their main competitor had, mapped out to copy- and they didn't even try to reach feature-parity.
Giving out free games only takes you so far when people lack the necessities to stay at your platform
The exclusivity deals they struck early on are an albatross that still drags them down. I think the audience would have been much more receptive to deals like Alan Wake 2, where that money spigot got turned into something totally unique that wouldn't have existed without that capital investment.
> they're losing money on vanity projects
Among other vanity projects, they hired Simon Peyton Jones, long the most prominent developer of Haskell, to build "Verse", Tim Sweeney's hobby language [1].
I'm sure SPJ isn't that expensive, but still, it's pretty far from Epic's "core mission."
[1] https://simon.peytonjones.org/verse-calculus/
Epic lost billions of dollars when they were kicked out of the App Store and Google Play and they were out for a long time. Only now Fortnite is coming back to mobile.
Exactly. Their holy war on the App Stores blunted Fortnite’s momentum at its apogee.
On one hand, I admire their chutzpah. The App Store model has weighed down the entire software industry and has prevented entire categories of new products from growing out of infancy due to anticompetitive practices. Everyone, Apple and Google included, would actually be better off without the App Stores in their present form, and I’d love to see them weakened or eliminated.
But on the other hand, Epic actually accomplished very little in their war, and nowhere near what being unavailable on mobile platforms for years cost them.
Additionally, their refusal to go after Xbox, PlayStation, and Switch never made any sense to anyone except for those with a financial interest in those arrangements. The rest of us were just confused — the console App Stores are the exact same model as the mobile App Stores.
I suspect Epic’s actual reason for not going after the consoles was a bit of realpolitik or cowardice depending on how you look at it. They couldn’t afford to be locked out of the mobile and console stores at the same time, so they invented some tortured rationale for why they could pay the console vendors their 30% but not the mobile vendors. But, this muddied their message and they came up mostly empty handed in the end, and here we are today.
That's not how I see it at all. Steam has some abusive policies like not allowing your game to be on other platforms for a cheaper price. They take 30 percent cut. Compare that to epic takes nothing on first million revenue and then 12 percent.
Epic are trying to break into what is nearly a monopoly.
there’s a huge component to gamers that they are emotional and resistant to change. gamers hated steam when it came out. and now the backlash against epic store is huge. they haven’t done a good job fixing the perception of epic store the way steam did
I certainly still hold a grudge against tim sweeney for saying piracy made them not release stuff on pc and after a while going back to releasing on pc while whining about valve fees and then launching epic games with similar fees and way worse service for the developers...
> similar fees
No? Epic charges 12% (with the first $1m free) vs. Valve’s frankly extortionate (i.e. industry standard) 30%.
As I understand it, epic charges less but also offers less services that a developer can need like the gamehub and steam's 30% i think is tiered and reduces with sales volume? I'm not sure, though, don't take my word for it.
1. Those features aren't a la carte, so the share matters if you're not utilizing those extra services. You're basically paying for the audience.
2. Valve does have tiered shares, but it's based on publisher sales. And it's extremely high. I have to check again, but I believe the threshold was 25m yearly revenue for 25% and 50m for 20%.
Innsome ways it's more frustrating. It's basically a tax cut for the rich.
Steam will also provide publishers with free activation keys that they can sell direct to customer without the 30% charge.
If you are a large game, they will not provide you an appreciable portion of your sales as keys. Sales made this way also likely hurt your organic distribution.
Re: value propositions: Steam's 30% reduces to 25% after $10M made, and 20% after $50M.
> there’s a huge component to gamers that they are emotional and resistant to change.
This is just wrong. You portray people as being irrational / "emotional", but Steam was actively bad when it first launched. The fact that people changed their opinions on it when it later became actually good is not emotional, that's in fact exactly rational.
The Epic Game Store doesn't need to fix "perception", they need to fix their actual product instead of trying to take shortcuts to gaining users by burning hundreds of millions of dollars per year on exclusivity deals, which are extremely anti-consumer, and will obviously result in rational backlash against somebody blowing money to attempt to force people to use their product for access to a completely unrelated product.
Exactly. Steam an launch was some other program you had to have running on your machine, that was buggy, taking up resources when most people were barely running most games (people upgraded computers to play Half Life 2!), and had no point.
Steam with thousands of games, that regularly has (or had) massively deep sales that let you get games for cheap, barely uses resources (most players are not struggling now to run games), and run very smooth. Is a very different beat. Valve earned trust.
Without commenting on any other part of this exciting console war, I don't know if this is true. Steam on my machine still always consumes nonzero CPU when minimized, possibly because it opens to the busy animation/video-filled front page then its WebView doesn't detect minimization. It's funny how Steam never comes up in the "stop making WebView/Electron apps" discussion when they were the original sinner (yes I know they were using IE originally).
You are correct. Steam was actively bad at launch when it only had Valve games on it. And they fixed the platform and then started allowing other devs to put their games on it.
EGS is currently bad and trying to position themselves as a Steam alternative when they simply are not even close to the same quality.
It's hilarious how I must have like 80 games there, with zero intention of ever installing Epic, or even playing those games. Yet I must "claim" them... just in case. I bet the majority of users do that hahaha
This was the first thing that came to mind with me as well: the language of the reasoning for the layoffs. It's never a leadership failure is it?
They are spending a lot of money on Fortnite’s UGC side in the form of paying developers for their games engagement as well.
Do we actually know that this is the case? Have they released any figures? How much money are they actually losing on the store?
Interestingly, I don't even think that the Epic Game Store was a vanity project. It was probably a good idea, they had a successful product and could build up their store out of it. Basically what Valve did originally.
But instead of focusing, you know, in making their story desirable to use, they focused on shit like exclusives. And for that, they should fail.
I prefer GoG over Steam, even while I am super grateful for Steam making gaming on Linux possible. And GoG didn't need to rely on exclusives for this.
bingo. At least they didn't use AI as the "excuse" for the layoffs though ...
Everybody says this. It's so weird.
How on earth will epic win without exclusives? It's like launching some Facebook competitor "but you get two profile pictures". Noone would switch.
All these geeks singing steam and lamenting competition. Competition bad for me mkay, steam good.
/me shakes head
How do they win with exclusives? The strategy is nonsense.
For Sony, I get it. I want to play Demon Souls, I buy a PS5, now I own a PS5 I'm gonna buy more games for it.
But for EGS this doesn't make sense. It costs me nothing to install both stores on my PC. I buy Alan Wake 2 on EGS, great, that doesn't make me any more likely to buy the next game I want there. Nothing about the platform is sticky or requires a sunk cost.
Unless they're making enough money on the exclusive games to justify the deals on their own (which, given this announcement, seems unlikely) I don't see how they or you think it could work.
> It costs me nothing to install both stores on my PC.
But you wouldn't bother unless you have a reason to. I put off buying games I wanted to for months because I'd've had to install a new store. No-one is going to install a store for nothing.
> I buy Alan Wake 2 on EGS, great, that doesn't make me any more likely to buy the next game I want there.
Now every time you launch Alan Wake 2 they get a chance to sell you another game. If you see a game you like, why wouldn't you buy it on EGS now that you've installed it and know it works? They've got your email address now and can send you recommendations or tell you when there's a sale on.
Sure, it's still going to be an uphill struggle. But if they can't get you to install the store then they can't even start.
This is definitely wrong, Steam’s stickiness is a massive selling point.
What part? Finish your thought.
Steam is sticky (social features, network effects, etc) and EGS is not, so EGS exclusives do not work. What part of this is "definitely wrong"?
It's called a network effect. At some point, you use it because you use it. And without any killer feature, you have no reason to move. It's not "wrong", but it explains why "just do better than Steam" does not work.
Comment is suspect. Defines a term I already used like you think you're introducing it, and addresses an argument I didn't make.
Did you use an LLM to generate this? Don't do that.
No, I am sadly human. Heck, these days I'm sloppier with my typing specifically to avoid such accusations.
You asked why and I answered with the real reason. It's not that deep. People don't leave because people don't leave. If that's not a satisfying answer, I agree. But reality can be irrational.
Historically, exclusives have been the only way to get an edge in. And it only takes one system seller to pull it off.
Or at least, that's how it worked 20 years ago. Thing is, games got so diverse, as well as the rise of "forever games" that there's fee actual "systrlem sellers" these days. It's really just GTA that comes to mind now.
I'd love steam to have some competition. epic isn't it though. Epic sucks up your personal data to sell to advertisers and "marketing partners", the client itself is trash, it's just one more middle man to get in your way (https://old.reddit.com/r/EpicGamesPC/comments/zc5ri3/playing...) at inconvenient times.
A good competitor would not come from a game publisher. It wouldn't collect any more data than it needs and wouldn't use your data for marketing or sell it to anyone else. It also wouldn't be able to remove your ability to access and play the games you've already purchased for any reason.
Bad products/services that are more trouble than they are worth do not magically become good because they might compete in some ways with something else.
GoG is the closest thing to a steam competitor right now and even in that case I have zero incentive to install their client.
Competition is good, the EGS is bad and anti-consumer.
Two anti-consumer products is probably better than one, but I also hate Epic as a company, so I would just prefer for Steam to win. At least I like half-life.
[dead]
> Unfortunately it is their employees that are paying the price of leadership
Neoliberalism at its finest. The world moving towards conservatism has left us with this model: The working class takes the hit of each crisis from small to big.
It is not a sustainable model.
> ”Sorry, HOW?!? How can a company like Epic games … be losing money with a product that is so mature?”
I’ve been playing Fortnite a bit lately, after my nieces got me into it.
One thing is that although the player counts are high (always hundreds of thousands of players online, just in the main Battle Royale game), the average revenue per player can’t be that high.
For one thing, once you’ve bought the $10 battle pass once, you only need to average maybe 1 or 2 games per day to earn enough vbucks to buy the next season’s battle pass with vbucks. So if you stay active you can pay once then play the game free forever and still get access to a huge amount of free cosmetics. And much of the player base is kids who are just begging their parents/uncles to buy them stuff in the game rather than spend money themselves because they don’t have credit cards to link to their Epic accounts.
Compare this to something like Hearthstone which is similarly mature. They have a similar battle pass but there’s also a strong incentive to pay real $ for extra card packs and cosmetics. And there are clearly plenty of adult whales buying this stuff. For example, there’s a new mythic Deathwing skin on a gacha wheel that costs, on average, about $200 (!!) to get. It’s only been out a few days and I’ve run into multiple players who have it.
Hearthstone battle pass isn't really comparable to Fortnite cosmetics. Hearthstone is pay 2 win where the majority of new cards are better than old ones.
Everything in this comment is wrong lol
> you only need to average maybe 1 or 2 games per day to earn enough vbucks to buy the next season’s battle pass with vbucks. So if you stay active you can pay once then play the game free forever and still get access to a huge amount of free cosmetics. And much of the player base is kids who are just begging their parents/uncles to buy them stuff in the game rather than spend money themselves because they don’t have credit cards
I lack the vocabulary to describe how fucking shit this is. Poor kids that have been sold into this versus the games we had that didn’t outright exploit.
Kinda shame on you for contributing in to this. It’s gross.
Honestly, Fortnite is run pretty responsibly. It's not bad at all compared to some of the other nonsense that's out there. Everything in the store is straightforward and fair. No gacha/gambling mechanics, no “pay to win”, no insanely priced super rare items.
I think big media companies are just structurally unable to stop trying to double their revenue. They just keep pushing out more products and over-extend at the same time everyone is losing interest in them. That's how you end up with say the MCU producing at quadruple the old pace and the movies making less than ever. At some point there's just nowhere to go.
The Marvel Cinematic Universe is no longer "producing at quadruple the old pace". That peaked around 2022.
Epic is funny like that. They arent a publicly traded company and yet they act like one.
Epic is 40% owned by Chinese conglomerate Tencent, which is publicly traded.
This. You need to fire your CFO immediately if you don't have billions of dollars in cash after the run you just had on Fortnite.
They should've setup an endowment fund, could've been self sustainable by now.
They could have loads of money and still would need to tighten their belt once usage drops. I could have 100ks in my savings accounts but if my hours / salary was reduced at work, I would still reduce my spending. It's just being smart.
Yes, and that's what a good CFO is hired to do.
>"We've had challenges delivering consistent Fortnite magic," Sweeney said, adding "market conditions today are the most extreme" since the early days of the company founded in 1991.
Probably the closest way to say "we're in a recession and gaming isn't resistant to this one" I've heard yet. But it makes sense: a "free" service that entices with cosmetics is easy to cut when parent money gets tight.
And if kids lose interest they will move to another game. Or more likely, TikTok and its medium. Just increasing the dopamine.
The epic store with its giveaways and exclusivity deals is probably burning money.
Wonder how developers working on profitable parts feel about it. I’ve been at an employer who burned their cash on vanity projects and hubris and turned around to people working on the bread and butter profitable parts and said “sorry hard times hit, no bonuses this year, we have to tighten our belts”. It's when I left.
That's pretty much every tech company these days. People wrongly claim they "over hired", but in reality these companies were trying to open up a half dozen new initiatives all at once. I worked at Unity and you'd be surprised what aspects were worked on (publicly, so I can pull it up if interested " that you probably never heard of.
Those all shuttered as companies went into maintenance mode. I'm sure Epic has similar reactions. I remember them going pretty hard on cinema and architecture, but those have been quieter over the years.
They explicitly stated this as a reason during their last layoff cycle.
So I guess they are finding out that running an app store isn't very profitable and dare I say suggests that the percentage Apple charges was not unjustified?
No percentage will make it profitable when they are giving away the games.
Seriously? Are you seriously making this argument?
Are you seriously comparing running a PC app store vs App Store? One is the most open platform and the other has only one (1, uno, sole, single) app store.
And which one of them are we reading about laying off employees while admitting they are spending more than they are bringing in?
Google has had plenty of layoffs by now. I don't think Apple has, but they have been not continuing contracts.
The one that doesn't have a monopoly on the market.
Fortnite is almost 10 years old, I'd be interested to see the average age of the playerbase. People have less time for games when they get older.
My nephew was deep into Fornite for years - now at 15 he (and his friends) moved on to GTA V. Imagine what a treasure trove of gaming you can discover as a teenager today, looking back at a pool of 15-20years of great games.
I started playing in my late 40s, but it got stale pretty quickly. Epic keeps changing things to try to keep it fresh, but they change the wrong things: usually making the game harder and more frustrating for casual players, in order to cater to pros and streamers. When I started playing, I could win a few matches if I got lucky. Three chapters / 15+ seasons later, I get spanked within 5 minutes of joining a match by people who live and breathe the game. I stopped playing because it's just not very fun for someone who just logs on once a week to play for a half an hour or so.
> they change the wrong things: usually making the game harder and more frustrating for casual players, in order to cater to pros and streamers
Interestingly the pros and streamers have the exact opposite complaint: that they dumb the game down for casuals.
Can't please everyone/anyone.
My 11 year old son plays Fortnite almost daily. He plays other games too but Fortnite is what he plays with his friends online.
Kids who play video games grow up, and get off Fortnite, and you have to convince the next generation to sign up.
And anyways, the population who plays these kind of live service shooters is relatively constant imo, and there are new games on the block nowadays.
Actually what's an anomaly is how long Fortnite continued to be popular.
I don’t think this is necessarily what is happening.
Roblox predates Fortnite by a decade and is only getting more popular over time
Tbf, "just make the next Roblox" is kind of an insane business proposition. Roblox has enjoyed unprecedented success at engaging the same age range for 20 years. Most games that are anywhere near that old have for the most part followed their playerbase as they aged. Runescape is a great example, where enough of their playerbase in 2013 were the same people who were playing 2007 that they demanded a reversion.
Roblox, in contrast, has been extremely popular with 7-16 year olds for 20 years. They're funneling in new players faster than old players age out. It's pretty wild.
My personal theory is that Roblox largely stepped into the amateur game dev hole that Flash left.
Roblox is a development platform, not a game.
> I don’t think this is necessarily what is happening.
This is exactly what happened with my niece, my nephew, and all of their friends.
Which isn't to say they've outgrown all of the games they played when they were younger. They still play minecraft, stardew valley, kirby, mario, etc. I don't know why, but they all bounced off of Fortnite after they hit a certain age. I wonder why.
I think these type of shooter games have significant competition. So you have games and genres that peak for times and then slowly or quickly get replaced. And entry to this is hard. You get lot of failures and few successes.
Counter-Strike might be a exception. It seems to keep older players well while still getting enough new ones. And also have enough gacha mechanics to make lot of money...
Right. I think one way to think of your relationship to customers is you grow up with them. Trying to be intergenerational can be really hard because you have to keep winning over a new generation for the first time.
> HOW?!?
They are paying creators a lot. $220 million in 2023. [1]
That combined with trying to undercut Steam on royalties, the 2025 softening of their cash cow, the Apple legal wars, a number of R&D bets, giving away free games, and an absolutely MASSIVE marketing budget...it can go fast.
[1] https://naavik.co/podcast/fortnite-creative-origins/
> Almost every other games developer would love to be in their position on Fortnite
I seriously hope that isn't true because Fortnite is a showcase of nearly everything wrong with modern gaming. It's an ad platform/casino that prays on children and is designed to make them feel like shit by pumping them full of anxiety/FOMO over their various passes, gambling, and vbucks balance. I think the only good thing you can say for Fortnite is that it's not often pay to win (although there have been skins that gave players advantages over others) and it isn't run on child labor like roblox is. If Fortnite is actually losing players that's great news.
I hope that most games developers would be ashamed to release a game like Fortnite and that the ads and predatory casino mechanics are something they'd choose to avoid in their own games.
> "We're spending significantly more than we're making, and we have to make major cuts to keep the company funded," he said.
The chances this is accurate are extremely small. This is either anticipating AI coding goals, the CFO proved they were overloaded on developers, or they're just cutting to hit quarterly numbers.
I'd be sad if "quarterly numbers" is a reason for a privately held company with 40% controlling stake still held by Sweeney to lay off 1K folks.
As an indie dev, I generally like the guy's stance on shifting the PC gaming industry's support and financial incentive structures, so I'd be a bit surprised if he just did mass layoffs like Embracer and co.
That said, the article implies things that aren't necessarily canon: "cut jobs as Fortnite engagement falls" doesn't mean "cutting people because Fortnite is flagging". It's much more likely because the Epic Game Store struggles to push enough volume to recover the cost of developer acquisition on the platform.
If they're private I apologize, but I still don't think it has a real revenue reason, it's just copying what Block did last week.
> Sorry, HOW?!?
It's me. I have accumulated several dozen free games over the years through the Epic Store. Sorry Tim Sweeney!
I love the whole "Thank you for adding free game to your account. Do you know you can download our launcher to actually play them?" message.
It might be a case where they're projecting costs and a pessimistic Fortnite market a few years out. I doubt this something you do after the money is gone. You'd look ahead and see your runway in a down market is way too short and cut costs.
You can't just bet the farm on dropping a new $5B/year game.
Cosmetics suck. It's all the same rehashed "urban style" characters with the same design again and again. I don't want to buy those. I've bought some video game characters like Geralt, but that's it. They can do historical figures, old movie characters, national costumes and songs, maybe something military etc., but they don't. And I don't want to buy battle passes recently, they are boring and stupid, all those items from them only clutter the inventory that you have to clean manually.
I suspect they've been behaving like google in using a stable golden goose to fund moon shots, but unfortunately for them now that golden goose is rather sick and no longer making so many golden eggs.
They have ~5000 employees.
Most game companies are a tiny fraction of that size. Even most AAA games are made by teams of hundreds. Not teams of thousands.
Epic Games does way more than just purely making games.
They also have their own Steam competitor (Epic Games Store) and, more importantly, they develop and support Unreal Engine used by tons of other game dev companies.
If you want an apples to apples comparison (i.e., other big live-service game companies) in terms of the employee count, you got:
Mihoyo (Genshin Impact, Honkai Star Rail) - ~5,000-6,000
Riot Games (League of Legends, Valorant) - 4,500
Roblox - 3,500
What about Valve itself? They have ~350 employees. They make Steam, SteamOS, Steam Deck, Steam Machine, Steam Frame, the Source engine, and run four actively successful live service games: CS2, Dota2, TF2, Deadlock.
Last I've heard Valve makes use of a lot of contractors however. So the number of people working on their projects is a bit higher than their employee count suggests. Anyone's guess how many though.
I know they're sponsoring a bunch of ARM and Linux projects as well.
Every studio uses a surprisingly large amount of contractors including Epic Games, Riot, etc.
The small size of Valve is simultaneously mind boggling but also not, given its very intentional independence. I would have to imagine that they must contract out or have partners at least for their hardware relationships if not for their massively multiplayer online games. At just 350 people that's enough annual revenue to make everyone there a millionaire several times over. Simultaneously plausible but mind boggling.
It's well-known that most of the work on SteamOS is done by vendors on behalf of Valve (both individual kernel authors and agencies like Igalia).
They contract out all the time, they've admitted to it in lots of interviews. So I think through the amount of contracting they're able to keep their core hires down.
Yeah but Valve is not publicly traded, so that comparison is of course totally unfair! /s
Having skilled and happy employees that aren't constantly changing and do not spend all of their time on ways to fuck over customers and chase trends is simply impossible. Releasing a piece of hardware and leaving it open for customers to do with what they want? Linux? Not hiring people the second line goes up and then immediately firing them when line stagnates? Preposterous.
The game store doesn't need a lot of employees. A few years ago it was reported that Valve only needed about 70 employees to run Steam while it generated billions of dollars in Steam fees (30% per game). It's basically free money for Valve. I bet the situation is similar for the AppStore and Google Play.
Though Unreal Engine does indeed need quite a few developers. Additionally, using UE is much cheaper (5% on games exceeding 1 milion USD gross revenue) than using Steam (30% on every game). So they not only need more developers than Valve, they also earn less money.
Steam doesn’t really attempt to gatekeep submitted content the same way that Apple or Google do so I would expect those companies to have much larger teams supporting, in mostly non-development roles. Steam support has also historically been kind of a joke (not sure if it’s improved in the last 5 years) though I don’t know if Google/Apple provide a better experience
You know what contractors are?!
Yes. Do you have any evidence they use contractors for Steam?
Can you do basic math on the number of support tickets Valve is handling to answer that question for yourself?
if not:
https://www.valvesoftware.com/en/jobs?job_id=113#:~:text=The...
> Can you do basic math on the number of support tickets Valve is handling to answer that question for yourself?
Can you? Do you even know that number?
Epic games store is likely a main culprit as they really have not succeeded while spending tons for free games
Mihoyo literally prints money with predatory gacha
Riot has had several layoffs in recent years
Roblox loses tons of money every year
The biggest competitor to Unreal engine, Unity, once had ~8000 employees. And Unity doesn't even make games.
(Not saying this is justified, of course. I think Unity is pretty much doomed.)
Don't make games, but Unity does operate worldwide and has a LOT of supports for ads (their main money maker, unless something recent happened).
That globalization is a big reason many tech companies swell. When you need a team to work in and around every region's laws and regulations, you get big quickly.
But also, unity has slimmed down and scaled down on a lot of initiatives.
The store is quite a cost. They also have a billion engineers working in every different direction contributing to UE.
if UE doesn't pay for itself they should just turn off the lights and sit in shame forever
All the lawsuits they are doing
I bet the genius C level who came up with idea will get a huge bonus.
It’s done being built and they need fewer or cheaper people to maintain it.
They pay out tons to "creators" of brainrot slop UEFN maps.
Because games is simply not a particularly profitable industry. There's a reason why Valve moved on from making games to being a digital landlord.
Games with micro transactions are one of the most profitable things that you can do today and fortnight being fortnight. There are tiny mobile companies being sold for billions and making massive profits with predatory mtx transactions. Gatcha games are doing extremely well, and fortnight is no exception.
Valve is making a killing over CS gambling and MTX as well, so not a good example. Steam is obviously making more but even CS itself would have made Valve a very successful and profitable company. Pretty much all of these build on predatory practices though.
If we are talking about games without MTX, yes that’s a very rough business.
Fortnite alone is estimated to produce more than five billion USD in annual revenue every year since 2018
Every year the licensing fees add up as they add more collaborations, while revenue is not rising to match.
They didn't need to do any of that by the way.
They're also paying out hundreds of millions to map "creators", the majority of which are pumping out low effort game modes like Steal The Brainrot. I can't help but feel this isn't helping their situation at all. Then again, Steal The Brainrot often surpasses the actual Fortnite game modes in player count, so maybe it is worth it. It doesn't seem like a sign of good health for Fortnite overall, though.
I'm gonna need someone smarter than me to show me the numbers on that. Fornite by itself is insanely profitable.
https://www.matthewball.co/all/presentation-the-state-of-vid...
You need an email address to access it but it’s good, if bleak, reading.
A game can be massively popular but many many games fail to hit the mark. Many do not see success and many do not even ship.
Ok, but Fortnite is a massively popular success, even as its popularity slips. Fortnite's run so far could have sustained Epic for years, even without other revenue they get from things like Unreal Engine. Games as a whole may be a risky venture, but we're talking about Epic here; the mystery is not how to succeed in games, but how a company that had an earth-shattering run of success in games is now in such a position.
Just because it's popular, doesn't mean it's financially successful. Take a look at YouTube. They lost money hand over fist for decades.
That's like saying playing baseball must be profitable because of how much money A-Rod made. The returns are skewed.
It absolutely is a profitable industry, maybe not as profitable as todays greedy shareholders would like it to be. Just look at the CD Projekt that releases 1 game per 10 years and still makes a fortune through Netflix colabs and selling merch.
I agree with your sentiment, but I also don't know if CD Projekt is a great example because its not their original IP. I am sure the games saw a boast in sales from awareness given by the TV show. But I am assuming Andrzej Sapkowski is probably the one who gets most of the money from licensing from Netflix. Although I will say, I don't 100% know all the details for the Netflix deals. And due to lawsuits and what not, exactly what Andrzej has the ability to sell rights to isn't very easy to find out with quick searches.
Edit: Ah, maybe CD Projekt does own the rights completely? They may have bought the right completely from Andrzej? So Andrzej may not have been the primary party selling the rights? Or maybe not? Andrzej may have retained film/tv rights and not sold those to CD Projekt.
It is full of street performers, some manage to strike a deal with a label, and tour the world once.
Afterwards depends on how they manage to keep surfing the success wave.
Basically.
Fortnite is exactly the guy who tour the world once and twice and thrice.
Indeed, pity are all the others that haven't.
It's the leading entertainment industry, beating tv/film/music. If you can't find profit there then you're not doing your job.
If you think Epic Games is unique in doing layoffs this year, I don't think you're paying particularly close attention to the games industry.
Did I say that? I'm just attacking your thesis that games aren't profitable.
Discretionary spending is the first victim in a recession.
Is it games overall or specific genres? I always regard games that have stores and strong at UA as something else.
It’s a power law distribution.
Games are an obscenely, absurdly profitable industry. Particularly the successful ones.
Lottery is obscenely, absurdly profitable employment. Particularly for the ones who win it.
The person I was replying to is asserting that the winners of the metaphorical lottery are not in profitable employment, so you aren't making the point you think you're making.
Well, you goto be good nowadays, you compete against the whole worlds dreamy eyed teeangers wanting to make "their"game. A wellfunded, pig-trough-slop-mill ala hollywood can not compete against that when it comes to fun, art and experiences. They fled into gambling, but gamers actively ostracize lootboxers nowadays.
> gamers actively ostracize lootboxers nowadays.
Gamers love, love, love lootboxes. Can't get enough of them. There are many lootbox games with 10-100s of millions of players. The Reddit/HN vocal minority who hate lootboxes (myself included) probably represent <5%, if that.
Given the love of Valve I’d bet Reddit/HN love lootboxes too, seeing Dota/TF2/CS all implemented them.
Steam works on the top 2 most played games on Steam right now.
Citation needed.
Look at NVidia's stock price during the period when they announced a pivot away from gaming.
Nvidia doesn't make games, this is one of the worst takes I've ever seen on this site.
They made products that were effectively only targeted at the gaming audience, and when they pivoted, they were rewarded substantially, as the wider market recognizes how small the niche they used to be in was compared to where they are now.
Because of basic economics. The opportunity size of AI for NVidia is unlike anything we have ever seen. Of course they pivoted.
You have literally no fucking clue what you're talking about. The games industry is ~200 billion dollars per year. Film is 30, music is 60. Not only are games the largest entertainment sector, nothing else is even close.
A hardware company pivoting to the AI bubble has literally nothing to do with the profitability of software.
This is the worst take I've seen in a while on HN. Nvidia doesn't make games, and for its case, they can either sell the same die as a gaming GPU for $2,000, or as a server GPU for >$30,000, the math is simple and obvious, which is why the stock jumps.
Epic doesn't have anything else besides the gaming market. And the gaming market is huge, it's more than music and movies combined, so please just stop spilling bullshit.
Is the gaming market huge or is it 1/15th as valuable as an alternative for investors? Even if the answer is both, what's the net effect of this?
Right now even Valve realizes that Steam will literally run out of steam. This is why they have been trying to become more like Nintendo and selling their own hardware (with varying success) .
Valve wants a boat that is independent of microsoft. Not to go down with that Tit.A.I.nic seems like a smart move.
Exactly, and they've not been quiet about it. It's why Steam works on Mac and Linux and they work so hard on being independent of all of those.
And Arm is next.
Hardly when their business depends on running Windows games on top of Proton.
Independence of paying Windows licenses or Microsoft store taxes, sure.
The point is that Proton puts them in a win win position. If Windows stays popular, they're fine. If Windows tanks, they're fine.
If Windows tanks their fountain runs dry.
What is the scenario where windows becomes so unpopular, computer games stop being made entirely instead of another OS filling that gap?
The doom that is repeated all the time on Linux forums, or even here.
The industry will adapt quickly, especially the part that's using multiplatform mainstream engines like UE/Unity.
Lots of new/recent native MacOS releases nowadays: https://store.steampowered.com/macos
The same that support Linux and yet Valve has to come up with Proton.
Developers chase the user base. If and when the users choose Linux developers will target Linux.
Proton as a project let's valve hedge on the heir apparent OS without upfront developer cost. If the Linux player base grows, developers will follow and valve is poised to remain dominant.
Because of Oracle v Google, supporting applications running in the Win32 userspace isn't necessarily leaving yourself open to threats of Microsoft meddling.
There's tons and tons of older software that people still want to run that might never be ported to Linux. And that's fine, because there's no problem with building compatibility layers to make it work. Microsoft can't do anything about that.
Sure, if the goal is like doing retrogaming with Windows games as if it was WinUAE.
I believe they have proved that very few games are actually Windows games. The few remaining are mostly those which require Windows kernel drivers to run or connect to online services.
Really, where are those Linux builds?
Hmm, citation needed on that one imo. Consensus is that their hardware strategy is in service of selling more games. Hardware revenues for Steam Deck are proportionally tiny; Frame and Machine aren’t going to meaningfully change that.
I am not Tim Sweeney's biggest fan. I know he and his company have many detractors. Please read this comment with that in mind, because while I don't love them, I also think that as layoff announcements go, this is good. No beating around the bush, explicitly NOT blaming AI, taking responsibility, taking care of those impacted. If you are gonna do it, this is as good as it can get.
I think the reality is that Epic got big because of Fortnite but nothing lasts forever. They would have been better off building a war chest and pulling a Valve (though I'm sure they'd hate hearing it that way): going silent and making whatever they wanted for a while, and then trying to repeat the cycle, rebuilding the chest, and then going on. Video games are the exact opposite of Infinite Growth Forever. People get bored and move on.
Meanwhile, Epic has many stable and valuable businesses - Unreal, the game store, etc. - which are perfectly capable of sustaining a sizable company. Just not one as sizable as Epic is. The best case for them is they figure that out, and manage to make a sustainable go of it doing that.
> pulling a Valve
> Video games are the exact opposite of Infinite Growth Forever. People get bored and move on.
To me, Epic Games were clearly trying to "pull a Valve" and capture the platform magic that allows Valve and other platforms like Roblox to be sustainably profitable. Obviously they have their own game store, but they also have a Fortnite Creative / UEFN (Unreal Editor for Fortnite) platform where people can create minigames inside Fortnite that work similarly to Roblox.
They even had the right idea for a while - refusing in-app transactions in their Fortnite Creative platform to encourage actually fun games rather than greedy games that prey on players. Unfortunately they had to walk back that system recently, which I now assume to be for the same financial reason as this new layoff.
I think their idea didn't work for two reasons. First, they locked down the UEFN platform too hard, leaving not a lot of options for developers to modify core gameplay features like movement and player controller. Devs like me who wanted more control over the player character and game mechanics were really severely restricted - if it was intentional, it was a bad call, and if it was unintentional then it shows that UEFN was too half-baked technically when they launched it. Second, Fortnite already had the reputation of being "just that Battle Royale game", so people didn't innovate too far beyond the game's base gameplay, rather than Roblox which was more like a true game engine / platform where every genre was possible. This kind of doomed their plan to compete head-to-head with Roblox from the start.
> To me, Epic Games were clearly trying to "pull a Valve" and capture the platform magic that allows Valve and other platforms like Roblox to be sustainably profitable.
Valve have headcount of under 400 people. Obviously they have contractors working creating assets for CS / Data / etc, but company itself is swift and agile.
Epic was around 1000 people at Fortnite release then grown to over 4000.
Yeah, UEFN when you dig past the surface is rough. I think it's a mix of both your reasons. UEFN seems to be a spinoff of their Fortnite Creator workshop while making use of their new Verse scripting. If this was originally only meant to mod Fortnite, I can see why it's so half baked as a Roblox competitor. You really are pulling teeth if you want to make anything other than "Fortnite but X".
I broadly agree, though it does seem like Minecraft has some plot armor here. I think people are still buying and playing Minecraft a lot. I like Minecraft, I play it occasionally, but I guess it's a game that has much more staying power than average.
I though my grievances with Epic are primarily because we never got Jazz Jackrabbit 3.
Minecraft is kind of a perfect storm for longevity. It is a sandbox game, that has a lot of depth. But its also extremely easy to jump into casually (unlike idk Kenshi or Rimworld). Its also family friendly but not in a way that makes it off putting to adults so anyone 5-500 could play it. Its also not so expensive that people refrain from rebuying it on different platforms.
There are some grievances with minecraft recently
Someone is suing mojang because they break EU/Swedish law (It was a youtube video worth watching)
Minecraft bedrock is having some incredibly shitty tactics to move people towards their marketplace while community calling it bugrock
I don't think that many people who play Minecraft really appreciate Mojang being bought by Microsoft. Many are oblivious to the fact sure but overall, community's sentiment is negative towards Microsoft buying Mojang imo.
I don't own a Windows computer so I only play the Java Edition, which still shockingly gets regularly updates and is very mod-friendly even still. When MS bought Minecraft I assumed that they were going to drop support for the Java version but I was clearly wrong about that.
Didn't know about the lawsuit though, I will give that a look.
Mojang and apparently someone at Microsoft who listens are smart enough to know that while most of the Minecraft revenue comes from bugrock, 99% of YouTube content comes from Java.
They need that and the modding community to keep the game alive so that new players buy a copy on phone/console/etc.
> When MS bought Minecraft I assumed that they were going to drop support for the Java version but I was clearly wrong about that
Oh they sure wish that but the community loves java and for a good reason actually but their first step towards this was migrating mojang accounts into microsoft accounts as previously bedrock had microsoft accounts iirc and java had mojang accounts and microsoft accounts both but they have now blocked mojang accounts
https://www.youtube.com/watch?v=w_UF_4gZclI (Mojang screwed us, now we're suing them)
> which still shockingly gets regularly updates
AFAIK Java Edition is still the actual development branch. Mojang develops new updates for Java Edition first, then lets another team port them to Bedrock.
I assume you're referring to Kian Brose v. Mojang? [0]
A class action, where the EULA was updated without full consent being sought correctly.
[0] https://tribune.com.pk/story/2567759/minecraft-faces-a-class...
Yes, relevant video part1 : https://www.youtube.com/watch?v=C5RvoPQZQeM (Suing Minecraft Because They Broke The Law & Pissed Me Off)
part 2: https://www.youtube.com/watch?v=w_UF_4gZclI (Mojang screwed us, now we're suing them)
Time for them to pivot to their strength: ZZT
I haven't thought about ZZT for many many years, and didn't realize it was a Tim Sweeney joint. Thank you very much for the intense hit of nostalgia!
My kids have a PS5 and a Switch 2 and really only use either of them for Minecraft.
> Epic has many stable and valuable businesses
I don't think their approach is getting to stable, valuable businesses and keeping them that way. Their company name is Epic, not Mediocre BlueChipGameCo. I think their approach has been to make big investments into things, almost like Amazon's earlier approach where they would re-invest everything into the business and that might be where Epic now has to react to the market slowing for them and pull back.
I have to imagine AI is having an impact but not in the way people jump to about them using AI. How many people out there have ideas for games and can't execute them because they don't know the tech? How many people in the software industry were drawn to computing because of gaming?
If they built AI into Unreal Engine so that someone could approach it from a Game Producer/Designer role and not have to get deep into C++ programming or shaders and art assets, and produce games, games that go to the Epic Game Store and they take a cut? That would move the market in a way that would be more fitting for their company name.
> They would have been better off building a war chest and pulling a Valve (though I'm sure they'd hate hearing it that way)
Isn't that exactly what they were trying to do with the Epic Game Store?
Steam is the thing that has made Valve successful. They were great as a game company, but as you said, the games don't last. Steam does, and I don't think Valve would be that successful in a business sense without it.
At least they're doing severance, health insurance, etc. Nowadays if I got laid off at a company I'd expect to just find that my key didn't work and a "check's in the mail" letter to the wrong address.
Pool the money then make the dream game. Announce Unreal Engine 6 with Jazz the Jackrabbit 3!
Even better - give Klei Entertainment right to develop a Jazz game. Mark of the ninja showed they have the perfect 2d engine.
You see this trap in tech companies as well as game studios. I call it "acting like Google before you're Google". And in fact virtually nobody becomes Google.
Google has been a money printing machine for 20+ years almost unparalleled in human history. That's allowed Google to write bespoke software for everything, which has been useful because almost nobody has Google's problems. It's also allowed Google to contribute a bunch to open source and engage in vanity projects. They can afford it.
Then you see the likes of Twitter a decade or more ago who dedicated possibly hundreds of engineers to make Cassandra work. That's doing Google shit. But they aren't Google. And eventually those chickens come home to roost.
Games are like any content business where the owners and leadership are trying to create a formula that can be repeated infinitely. Content business actually hate the creative people who make their content because creativity doesn't scale. This is why movie studios churn out sequels and superhero movies. It's a formula.
Games eventually fall out of favor as genres get stale and new genres get created. Minecraft is an almost unique exception to this. There's a reason it sold for ~$2 billion. It's still popular. It's crazy. But that kind of example is so incredibly rare you should assume it's never going to happen.
The hubris at Epic was that they could challenge the Apple and Google app store monopolies. They were wrong. And they wasted an extraordinary amount of time, money and opportunity chasing that. That was a strategic mistake, even though I agree with their philosophical position.
I'm reminded of id software. John Carmack was legendary for years. Wolfenstein was groundbreaking. So was Doom then Quake. But eventually (IMHO) id games ceased to be games but because tech demos to sell engine licenses before ultimately being acquired and swallowed.
I feel like Epic is the same with the Unreal Engine. Fortnite is a success while it's popular and people buy cosmetics but when that popularity wanes, they have a huge revenue problem.
> Then you see the likes of Twitter a decade or more ago who dedicated possibly hundreds of engineers to make Cassandra work. That's doing Google shit. But they aren't Google. And eventually those chickens come home to roost.
Isn't it the other way around? Using off-the-shelf solutions like Cassandra didn't work, so they had to resort to doing actual Google shit, a custom solution, to meet their needs.
Look at Facebook/Meta. They use MySQL (plus some other stuff on top). Twitter was at the peak of being trendy and trying to make NoSQL work. It was quite literally an idoelogical vanity project.
Facebook invented Cassandra, so I don't get your point. And Twitter wasn't exactly a WordPress site doing a needless vanity migration.
I don't think "use MySQL" really means the same thing at that scale.
I think you're overall point is correct, but the specifics about twitter are backwards. Twitter would have been way better off using Cassandra (but it wasn't built yet!), instead you're 100% right, they did their own bespoke stack, trying to replicate what google had internally, and they didn't have the $$$ to do it.
It was Facebook/Meta that later open sourced Cassandra and a buncha other great open source stuff.
Someone else suggested I was misremembering the Twitter Cassandra timeline so I went back and checked. No, Twitter droped MySQL for Cassandra in 2010 [1], after Facebook open-sourced it in 2008 [2].
Twitter claimed they were using Cassandra (or at least planned to) for storing tweets [3] but had rolled something else entirely (called Manhattan) by 2014 [4][5].
So yes it was originally released by Facebook but it was Twitter who spent a massive effort trying to make it work in production. And failed.
[1]: https://www.informationweek.com/it-infrastructure/twitter-dr...
[2]: https://en.wikipedia.org/wiki/Apache_Cassandra
[3]: https://highscalability.com/so-why-is-twitter-really-not-usi...
[4]: https://blog.x.com/engineering/en_us/a/2014/manhattan-our-re...
]5]: https://news.ycombinator.com/item?id=7515995
Aren't they trying to do a Valve with their store?
> better off building a war chest and pulling a Valve
They tried, it's called the Epic Game Store
They did try to pull a Valve and use their successful game to fund a game store that prints money.
It’s a reasonable take, but I do think there is a wrinkle: Tim is an AI proponent, but also understands the current politics of it. Personally, I doubt that AI has nothing to do with this: Tim just knows not to admit it.
Re Tim the man: I have no opinion on him, but I follow gaming news closely and know that he is polarising. However, I saw this recently in PC Gamer and thought it was admirable: https://www.pcgamer.com/gaming-industry/epic-ceo-and-billion...
Companies fire people all the time. Layoffs are regular. To the extent that AI has much to do with layoffs in the past few years, it's mostly AI being used as an excuse, rather than it being the true reason.
I understand that that’s generally the case; I’m saying that in this specific instance, there’s reason to suspect that it is actually a contributing factor - one of many.
Often when I see layoffs like this, I can't help but think "Wow that company has so many employees and yet, in practice, does so little". This perhaps a rather uncharitable sentiment, but I can't help but have it.
Yes, Unreal Engine keeps getting improved, more Fortnite content gets produced. But there is a general lack of innovation, one that I find personally painful when I look at Epic's recent-ish track record. Needing to fire this many employees is not just a result of market conditions, but also a straightforward consequence of not being able to leverage them for sufficiently lucrative outcomes.
Companies with this amount of capital are well positioned to take multiple strategic bets which aren't at all safe bets, but pose no real financial risk for the company in aggregate. Why do these bets end up being taken instead by indies with much more to lose? Well, partly because indies often _need_ to take riskier bets to carve a niche. But the other side of the coin is, what I can only surmise, a lack of imagination and adventurousness on the part of management. They could be funding many experiments and seek to have another hit like Fortnite, perhaps in a somewhat different market. Having to seek another hit while your finances are declining is less pleasant.
When a company loses its edge in this way, as long as it hasn't _really_ captured a demographic or created some very sticky ecosystem, it's bound to get whittled down repeatedly. I doubt that Epic will suddenly get more creative and adventurous at this point, but perhaps necessity will have its part to play.
(Aside from all of that, I agree with most commenters here that the layoff is being handled about as gracefully as one could reasonably hope.)
> "Wow that company has so many employees and yet, in practice, does so little"
Some of it is real need for things like support, payments, and compliance in a bunch of languages and jurisdictions and across a bunch of platforms and combinations of platforms.
A lot of it's just that large businesses tend to be shockingly inefficient, often taking literally many hundreds of person-hours to do things that a small company or small team might do in low-tens. Coordination costs are high, processes are often really bad in ways that nobody who could fix them is empowered to, serious principal-agent problems are the norm rather than the exception, et c.
One of the weirdest things to me about the AI craze is that I don't see how it fixes organizational problems, and most big orgs are already burning more cash on waste due to those than they could possibly gain from fairly-optimistic LLM gains. Like, if they wanted to 5x development speed, they already can without a single LLM involved, by managing better. They could have done that ten years ago. All the more wild that they're flipping out over LLMs. You can't even come close to efficiently organizing the resources you already have...
> if they wanted to 5x development speed, they already can without a single LLM involved, by managing better.
True, but leaders of large organizations always want to fix inefficiencies and presumably failing to. Kinda like saying "if humans stopped fighting wars, most of them would have better quality of life" -- people whose life quality is better at peacetime are already trying to avoid wars, and there's not much more they can do.
OTOH, AI is a practical step a CTO (or CEO or Board or whoever) can take to make the company more efficient (assuming the hype works out).
Semi related read: https://news.ycombinator.com/item?id=47484519
TLDR the beauracracy is by design, in part to preserve what jobs are there, and in part to dilllute accountability when it comes up. You can see how these two factors can lead to a negative feedback loop of inefficiencies, where CYA is more important than actual productivity.
Nanite is a good counterexample, very impressive and innovative technology. Even more impressive that they released the technical details instead of going the software patent route. I think trying to leverage the war chest to go after Steam's monopoly was exactly the type of adventurous plan you are talking about, the safe play would have been to make minimal investments and continue churning out games hoping for another big hit.
You can't go the software patent route without releasing technical details.
Lumen, Nanite, Substrate, Metahumans, and Chaos Physics all come to mind as major innovations driven by Epic. Nanite specifically has pretty much no alternatives. Additionally, the developer UX on UE5 gets better from release to release - for instance, being able to recompile your logic or animations while actively running the game is pretty insane.
I suspect the way you get to that size is having a team of 5 people doing X for Fortnite going "man, we could do our specific job a bit better if we has 7 people." Scale that to a whole corp.
Each job is justified in isolation to do a specific thing, at least at the hiring time. I suspect there aren't a lot of people thinking at a high level as you are "we have this many gajillion dollars - what are we betting on?"
Also as you get bigger you need more and more "glue" people, HR, accounting, etc. A five-man team can avoid all that, but you can't take them to 25 and have 5 5-people teams anymore. Some amount is just management.
> They could be funding many experiments and seek to have another hit like Fortnite
Remember that their success came from abandoning their original zombie game idea, and copying ideas from the new battle royale genre. With more polish, of course.
How is there a lack of innovation?
Nanite? Lumen? Metahuman?
They are bleeding edge when it comes to real-time rendering tech
And that's just rendering, there are a lot of other engine domains
Why the good god do so many people care if business is effcient. If businesses were maximally efficient we'd all be starving to death or working at red line hanging on by a thread with no slack at a job to avoid staving to death, while like 5000 people live like gods.
There's two lines of thought.
1. More efficiencies makes for more quality products, and opens up opportunities for more initiatives which will also be higher quality than usual.
2. More efficiencies means companies become super leannin order to minimize labor and maximize costs, focusing on a few select profit centers.
I guess you fall under #2. Both are correct, depending on the economy. So you're rightm for now. #1 was the trend last decade despite horrible inefficiencies.
I don't think so. My experience at inefficient companies is not "Wow I have a lot of freetime." It's "Wow my day is completely taken up by useless bullshit that prevented me from getting anything of value done".
I think there's a good deal of wiggle room between being worked to death and teaching a manager that makes more than you how Jira works for the 10th time.
How much would food cost if grocery stores and all the infrastructure up the food chain were not efficient? Would that result in starving?
Because you're paying for that inefficiency, generally.
> "Wow that company has so many employees and yet, in practice, does so little"
Twitter. I despise musk, ftr.
Just wait till you learn how many people work at Calendly
Epic's 2019 P&L was published as part of Epic v. Apple. According to that:
* Fortnight revenue was $5.5B in 2018 and $3.8B in 2019
* Employee counts in those years: 1063 and 1932
* Average "People" cost per employee: $141K, $142K (CPI adjusted is $182K in 2026).
* Average "Production & Hosting" cost per employee: $189K, $150K (CPI $248K, $194K)
* Platform royalty expenses were 25% of total game revenue
* Slightly under half their Operating Expenses were people
* Fortnight was >90% of revenue
I have a strong guess that "People" costs doesn't include all salaries, and that many employees are categorized under "Production & Hosting", although I expect that also includes other costs. I'll guess 75% is people, which makes total CPI adjusted average cost per employee somewhere around $320K-$370K, but I'll say $320K.
This means 5000 employees cost around $1.6B and cutting 1000 saved around $320M/year in addition to $500M of other costs.
Most estimates of Fortnight revenue claim it's roughly flat or falling between 2020 and 2025 fluctuating between $3B and $6B.
Unless Unreal Engine or EGS revenue took off, it's kind of weird to quadruple headcount while keeping revenue basically flat or falling. If fortnight only makes $2B next year, then they would be underwater on just royalties and salaries.
https://s3.documentcloud.org/documents/20696836/epic-apple-t...
Maybe a dumb question but why break down production/hosting as a cost per employee?
A lot of things have changed in the labor market since 2019.
> Today we’re laying off over 1000 Epic employees. I'm sorry we're here again. The downturn in Fortnite engagement that started in 2025 means we're spending significantly more than we're making, and we have to make major cuts to keep the company funded.
Layoffs really, really suck, but at least there's not a whiff of the "we're doubling down on AI to boost productivity" cop out that we're seeing across the industry.
It's sad that a company being honest about a difficult decision is praiseworthy these days, but here we are.
> Layoffs really, really suck, but at least there's not a whiff of the "we're doubling down on AI to boost productivity" cop out that we're seeing across the industry.
I agree, though it might also be worth pointing out that for a game company there's some risk in that messaging that doesn't exist for a normal SaaS company. Investors might like to hear it (whether it is the truth or not), but the game-playing audience tends to be only slightly less anti-generative-AI than say the art community.
> it might also be worth pointing out that for a game company there's some risk in that messaging
This.
I’ve wondered how much money was burned on Tim Sweeneys quixotic quest to re-create the Steam store. I know a lot of people who would religiously download the “free games” but never spent a cent.
The Epic Games store/browser is awful. I have bought one (insanely discounted) game on it and get all the free games, because i like to collect videogames. But i almost never play them, because the application is super slow. Steam has absolutely the best application, then (with a huge enormous gap) comes Gog, Amazon, Xbox, EA, Ubisoft and Epic at the rock bottom. I don't use Blizzards program, so i can't judge on that one.
> then (with a huge enormous gap) comes Gog
My favourite thing about GOG is that it uniquely does not demand that you install their software, instead letting you download installers straight from the website.
They're not fake netinstallers either, which doubles as a guarantee that I keep all of my games even if GOG goes bankrupt/bans my account/wipes my library/etc.
I was going to say that too. The other day I got annoyed by GoG's app constantly harassing me about updates that I just uninstalled it.
All my games are still installed and still work.
That's true. There is indeed absolutely no need to use Gog Galaxy.
Just a note, on Linux at least, if you use the Heroic Launcher, you can get your games from the Epic store without using their awful launcher. You can just run the games through Heroic, which I find less irritating.
> But i almost never play them, because the application is super slow.
And people say C++ is dead and everything must be done in Electron because developers are expensive and computers are cheap.
This here, is the reason performance matters and fast development time is not always the answer if the competition is strong and their product is high quality.
(Rust and friends are also good solutions.)
Hear, hear!
> i like to collect videogames
Starting thinking of it as collection licenses to maybe install games, assuming the license is still valid when you finally get around to playing it. And your account is still valid. And the servers are still running. And your operating system will still run it. etc.
Maybe just get off the train. Your numbers add to the awful business model these games are built on.
The majority of games on Gog offer fully offline installers, where the copy you download is enough to run forever (assuming Windows and hardware compatibility, of coruse).
What do you think these game companies should do instead? The license lets you make your own copies on your own devices while preventing stealing by people who might make a copy and then resell, which would absolutely happen if allowed.
You are absolutely right that they are just licenses and there always be a risk i cannot download or play the games anymore because of some decision. In that perspective Gog is absolutely the best. No doubt about that.
But so far, Steam has been really good to/for me.
Which is GOG's selling point, versus Steam.
Everything is DRM free and they provide offline installers. They are also proactive in making sure the games they sell run on modern systems.
> I don't use Blizzards program, so i can't judge on that one.
It’s… fine. Unnecessary, if you ask me, but ok. OTOH, it is on a completely different scale compared to Steam and GOG. I am sure it would be a disaster otherwise, it really is not designed for that.
This reminds me that one of the first blog posts I ever wrote was about how incredibly bad/shitty Epic games is
epic games doesn't know how to implement oauth (rant) : https://smileplease.mataroa.blog/blog/epic-games-doesnt-know...
In fairness, someone has to try. We can't rely on GabeN being (relatively) benign without serious competition.
I think the following is the bare minimum to compete with Steam at this point: 1. Store with discoverability, 2. A functional cart feature at launch 3. A wishlist with notifications for discount 4. Relatively high download speeds (500Mbps at least) 5. Friends list and activity feed 6. Achievements 7. An equivalent to steam input API 8. Regional pricing with robust payment options 9. Development/Beta build distribution as easy as steam. 10. A useful in-game overlay with at least performance metrics. optionally a web browser and notes.
All of the competition has missed either one or more of the features, making them feel like only a cash grab trying to avoid Valve's cut for providing these features.
Those features are important but I think the key things are the actual games and friends. You cannot start with empty catalog and you also cannot start with older games people already own on Steam. You also need friends to be there on day 1 for multiplayer.
I guess everyone gets different value from different features but I for one would not even notice if Steam removed the overlay, achievements, activity feed, input API or beta distribution. It all seems like bloat to me.
Missing a few things there: Reviews and working on linux, for example.
Reviews for sure but I think you could drop linux and just add it whenever everything is stable, I don't think Linux is that big of a gaming population( though growing, thanks deck! )
If Epic wasn’t actively hostile toward Linux (to the point of calling Linux cancer) I could be persuaded, but as it is now Steam is basically the only company actually trying to make gaming on Linux a thing. And because of that Steam will always get my money.
Everyone has tried already. EA, Ubisoft, Blizzard, Epic...
I was at EA during peak Origin mania and the defining regret of my career is not having slapped sense into the appropriate people when I had the opportunity to do so.
We really did have a far better shot at it than even most insiders appreciated (to the point rival companies would tell me to my face how confused they were by the apparent failure to execute), however, the core team were more interested in fighting over who would take credit for it when it succeeded than ever ensuring that it would.
Most of those didn't try to create an open store. They only tried to create a store and launcher for their own products.
Always thought the hate against EA Origin was unwarranted. They 24 hour no questions ask refund policy back in ~2010 that took steam like 5 years to implement themselves.
Outside of being forced to use a game launcher to launch their games, what was the real crime? Not enabling gambling on their platform like steam?
> Outside of being forced to use a game launcher to launch their games, what was the real crime?
To me, this was the crime. Me and my friends played mass effect 3 multiplayer around launch, which was an EA Origin exclusive. It was a total pain! All of us needed to download and install the launcher, then buy & download the game through it. Then add each other as "EA origin friends". The whole process was riddled with bugs at the time - including payment problems and download problems. Origin would crash sometimes. Sometimes we couldn't see each other in multiplayer, and needed to restart origin to fix it. Sometimes another of our friends would join us - and it was always "oh god, what do I have to do to make this work??".
I really love mass effect 3. But the experience was traumatic enough that I never bought or played anything through EA Origin ever since then. The quality of Steam is table stakes now. And there's so many good games coming out that game exclusivity usually isn't enough to get you over that initial hump.
The biggest gripe I have with the origin launcher (and to a lesser extent, the epic launcher) other than "why does it exist at all?" is how laggy all UI actions are. Game developers can render a 3d world at 120+fps. Why on earth does it take multiple seconds for the UI to respond to a button press sometimes? Its completely inexcusable. The blizzard launcher is (IMO) the best launcher by this metric. You can tell competent people made it, because everything responds instantly. (The EA launcher might be good now, I wouldn't know. I mostly only play games that release on steam.)
I bought Battlefield 2 and it's DLC and one of the earlier Dirt games on EA Origin and it was an absolute nightmare. My games and the DLC would constantly not be authed in my account and I still have like dozens of support threads in my old mailbox trying to get things working.
At the same time Steam had polished a lot of the rough edges like this for their catalog and other publishers so there's really no excuse. I've never had to open support tickets with any other storefront because the DLC map pack for a game would stop loading while the base game kept working.
The main problem with EA Origin was EA itself. They have burnt every single bit of costumer trust EA as a company could have.
Yes but EA Origin was still very consumer friendly at that time. They were one of the only people offering digital refunds at the time. Being able to refund a game on origin then buying a different one on steam was definitely a peak in consumer gaming (that plus the humble bundle being good added to the feeling).
No matter how consumer friendly they were, nobody trusted them in the long term. Buying games on EA Origin meant giving them control over games' sales, and a EA monopoly in digital distribution was a nightmare scenario. Their bad PR at the time simply killed the platform, no matter how good or bad the product itself was at the time.
I agree with you about the consumer friendlyness at the time and honestly it was not bad at first, but the problems they had were way more technical with difficulties in buying and downloading and hell even just friending someone and jumping in. When it first came out I thought it was decent and improving but then it just....stopped. They could have competed with Valve but it really felt like they stopped caring one day
Everyone that needs to respond to shareholders has tried already, and failed against a privately-owned company.
Gabe Newell is a billionaire and has shown no particular need to enshittify his brand just to extract more profit. May he blessed with health and a long life.
I can't even play the decent free games I got because I can't find them in the UI. It doesn't have sort by rating (or any other popularity metric) so you have to wade through the junk. Imagine paying for that experience...
I wouldn't say it was quixotic. Think about it this way: If fortnite made at it's peak $5.5b, and 2/3rd of that was PC (I have no idea of the ratio, just guessing), Epic would have been paying $1b to Valve in just that one year (3.66* 0.30).
You could spend a lot on developing a store to avoid paying $1b in fees!
Plus, your chance to launch a store is when you have a big product. Valve launched Steam with Half Life 2. It didn't really work that well at first but everyone wanted to play HL2.
It's a noble quest. And realistic; it's almost beyond reason how bad EGS is/was for so long with so much money and "the best people" thrown at it for a decade+.
Anway, it's not quixotic IMHO.
I've been involved enough with a few (mobile and PC) efforts in this direction, and now believe the US business culture can't create new ones in established markets.
The reason is the highly successful competitor, in that case Steam, inspires a sort of megalomania in those aiming to compete with them, which leads to spectacular self destruction and consumer confusion as stores try to act big long before they are self sustaining.
Also really makes me question your average USA based developer. Making a program and storefront to manage few dozen to few hundred applications can not be that complicated problem. I am not here even talking about scale of Steam libraries that outlier customers have.
There must be some fundamental problem with either developers or management system or both...
my completely uninformed speculation is that they didn't want to just build a clean, simple store that got out of your way, they wanted to throw in some sort of rent extraction or user control at every step.
Right, to apparently every MBA wielding PM they are actually primarily user ID systems which allow you to buy things (including whole games).
And doing this requires including a near complete web browser with piles of added hooks, obviously.
It's the same issue as games. No one ever says "I bought this game becsuse of its clean UI". Not unless you're a dev doing market studies. But at the same time, a bad UI in many genres can sink a game. So UIs tend to be as minimal as necessary to ship. Even Steam had the same UI for some 15+ years beffoe finally giving it different library views
The minimal here was to take the Unreal Launcher (which was always meh. But devs rarely interact with the launcher) and shove the tab into there. Any problems with that launcher were passed to the EGS, and amplified by being B2C.
If I have to be honest, it's also tribalism. Exclusives are not a new concept even on PC. But the reaction to some EGS exclusives was so extreme. The PR hit didn't do many favors.
> Tim Sweeneys quixotic quest to re-create the Steam store
Building a marketplace or AppStore isn't quixotic - it helps build distribution and gives Epic the power needed to drive studios to the Unreal Engine, though this strategy clearly went to the backburner due to Fortnite and it's entire ecosystem becoming the golden goose.
That said, Epic is also significantly more overstaffed than it's peers.
> religiously download the “free games” but never spent a cent.
We are Legion.
My main issue with Epic' Store is that it doesn't have a rating/review system just like Steam has.
Since game journos are completely woke and unreliable using Steam's game ratings from REAL players is a God-send.
Without it you simply wouldn't know if a game is any good or not.
Epic gave away 662 Million free games in 2025 alone. They pay the game devs for each copy they give away. They've been doing this for 8+ years.
https://insider-gaming.com/epic-games-store-give-away-662-mi...
In addition they've payed other game devs for Epic Game Store exclusivity so games would be available for 1 year before being released on Steam.
The whole company has been mismanaged into the side of a mountain.
I still don't know which is stupider: this, or Unity buying Weta.
>The folks impacted by the layoffs will receive a severance package that includes at least four months of base pay, with more based on tenure. We’re also extending Epic-paid healthcare coverage.
>For example, in the U.S., they’ll receive paid coverage for 6 months. We’ll also accelerate their stock options vesting through January 2027 and extend equity exercise options for up to two years.
https://www.epicgames.com/site/en-US/news/todays-layoffs
As far as layoff packages go, this is pretty good. 6 months health insurance and at least 4 months pay. The last 2 layoffs I experienced were just 1 week pay for every year you worked there and zero extended health benefits. And they made sure to note that they didn’t have to pay out anything at all, legally.
The wording of the announcement is better than the usual corporate non-speak too.
> they didn’t have to pay out anything at all, legally.
And still the overwhelming sentiment on HN is that unions are worthless.. When my company had layoffs the laws (thanks to the unions) made it favorable to us without needing the goodwill of the company. Additionally, representatives from the union were involved in all steps and made sure everything went as it should.
Were unions involved in Epic's layoff?
I think they're arguing that it should not be up to the companies being nice. Yeah, Epic's layoffs were nice, but a lot of companies give shit or no severance at all.
I've been laid off and I only get paid until the end of the week, and for healthcare the only thing I have access to is overpriced COBRA.
Is COBRA your only option? Have you checked your state's insurance marketplace?
Well I have a job now so it's not as big of a deal. This was awhile ago.
I live in NYC, and when I was laid off from a job in 2023. I looked into the COBRA options, and they wanted something like $3500/month, which is a lot of money. I called around around and I was eventually able to do a program through NYC where we got insurance for free. It actually worked great; we were able to get insurance within a week. NYC ain't perfect but every now and then they come through.
If I get laid off or fired, I will likely check this option again.
There is a legally required 60 day notice period, and plenty of states have their own requirements on top. New Jersey for example explicitly requires 1 week of severance for every year worked. Yes tech companies are often more generous, but doing a mass layoff with no notice and no severance was never an option to begin with.
Quite stunned that Fortnites 5bn per year isn't enough to keep them going.
They've been pull about that much in per year since 2019 AFAIK.
I really hope this one have knock ons for Unreal Engine or lead to Unity like licensing. Their indie grants are also quite generous.
Of course it's enough, the problem is greed. They must perform ritual sacrifices to appease the market gods.
To corporations, "enough" is not even a word. Line must go up and to the right, forever. There is not even the concept of "enough."
Line goes up is also not enough anymore. The slope of line going up is most important. You made 10bn last year, but only 9 bn this year - this means time for some layoffs to please "the market". I have no way to explain this world we live in.
"The line" referenced by "line goes up" is typically understood to be revenue or profit, so if you made 10bn last year but only 9bn this year, "the line" actually went down even if you have more money at the end of this year than at the end of last year.
They just hiked VBucks prices too... conveniently after they "won" their settlement with Google that includes a full on anti-disparagement clause against Google but fully allows them to keep on attacking Apple as much as they wish.
It's really strange too. I thought these settlements and 3rd party app stores would lower prices, but prices continue to go up! And now as prices are going up, Epic is also laying off workers? Hmmm.
They aren't publicly traded.
You're right they don't have a board and definitely weren't punished by both the FTC/DOJ for anti-trust and manipulative business practices.
Just a small mom and pop shop that somehow seems to elude themselves from the typical braindead MBA playbook of ruining lives to justify their shitty business decisions.
Hopefully the beloved indie game studio can navigate these waters successfully! Lots of sharks out there that like to rat fuck the commons for personal gain, wouldn't want that to happen to the gaming company that helped normalize gambling to children.
Amen.
Just a company with 40%+ of ownership from Tencent, Disney and Sony (all public traded companies). You could have googled this
Market in this context doesn't necessarily mean the publicly traded markets, it can mean the investor market (and their ability to raise), the financial market (their ability to get loans or other financial products), all of these things are dependent on their overall company performance, which can be manipulated in the short term by mass firing 1k employees so some executive can hit a KPI and get their bonus. Ya know, sociopathic stuff like that.
Why would the company not doing well in one area lead to more generous terms in a different area that is doing well?
One has to wonder what the annual bill of licensing costs looks like.
I also don't understand, this is just a failure from Tim Sweeney being blamed on external factors. With that amount of money and the IPs they own he should have been able to keep the company going but didn't.
It was 5 billion in 2018 and only 4 2019.
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A lot of folks wax sympathetic for the employees who've been laid off. But rare is the company which grows large and doesn't develop a lot of entropy in the process. Hiring beyond its needs, bloating, and mismanagement of resources.
Does the company owe a living to those people that it doesn't actually benefit from having on board? Sometimes it sounds like people think so.
1. It's more a matter of respect in the process than the act. People are notified out of nowhere, irrespective of performance, and they need to quickly change many plans. You do that to a company and it's "unprofessional". The double standards are real
2. Given the economic conditions, I am more sympathetic. Normally a large severance would he good reassurance that they'd land on their feet. But I see more and more devs (especially game devs) going through year long gauntlets just to find something not as good. Tim, in comparison, will manage.
This will be an unpopular take but I agree with it mostly. Always remember that you are not entitled to a job just because you need it to live. Always make sure you stay sharp and prepared for the worst case
If you're not entitled to a job, neither is anyone in the capital class entitled to own shit, they own the best houses, all the means of production - they're not entitled to any of that either.
You think they didn't have to apply themselves to be able to acquire those things? They just got it handed to them for free?
Of course they did. It’s called inheritance.
https://en.wikipedia.org/wiki/David_Ellison https://en.wikipedia.org/wiki/Walton_family https://www.forbes.com/profile/haas/
And the list goes on.
What about the remainder of the top 1%? From what I've heard it has a lot of churn, it's not just people inheriting it.
> They just got it handed to them for free?
As it turns out for the vast majority of cases: yes. Just look at the ultra wealthy in today’s society and trace back their lineage.
Many of them, no. Tim's been in the weeds, but most billionaires inherited millions and had the money make money for them. They start in positions with more money than many will see in a full career.
I agree, you’re only entitled to what you have the power to protect. Unfortunately they have a lot of power up there
> neither is anyone in the capital class entitled to own shit
No one would argue otherwise.
You may acquire property, but that is on you.
What?
A job is a mutually beneficial agreement between two parties. Either side can generally sever the agreement if it's not viewed as beneficial.
Owning things like houses and companies is more about the compact between people and the government. People are entitled to "own shit", because that's how our government is set up.
Not long ago I was looking at my favorite games of decades past. Unreal Tournament figured very prominently, made of course by Epic. So I wondered: why did they stop making Unreal games? I looked at their game chronology. On one hand, they made Gears of War, an Xbox exclusive that never interested me. And the other one? Oh, right: Fortnite. That's where Unreal Tournament went. They made tons of money for sure. But no company, including Epic, has made a competitive FPS + CTF game as solid as UT, UT2003, or UT2004 since that era
They had Unreal Tournament 4 in development around 2018 but it never gained much traction in the pre-alpha phase. Once Fortnite blew up they seemed to just focus on that and their app store.
https://www.youtube.com/watch?v=q3botRkqnwk
I think the Unreal Tournament 4 team was moved to Fortnite after the success of PUBG to rapidly turn it into a battle royale.
Halo Infinite is the closest I've gotten to the UT feeling nowadays. Simple arena, equal playing field, drop in drop out, tools-not-loadouts design. It's a shame how a variable and strong design gets put off into the corner to wither.
Splitgate 1 felt a lot like UT2k4 combined with Halo to me. Really fast, really fun.
I wanted to play UT2004 for some nostalgia recently. Turns out even though I own it on the Epic game store, I can't play it because Epic removed it from the Epic game store.
Didn't they make the game free? Or was that just UT99?
They removed all UT games from online stores and added UT 3X which is a free version of UT3 with Epic Online Services baked instead of original ones.
The only way one could legally get UT99 is to buy physical. And it's been like that for many years prior to an event above, which also disabled the server browser after 22 years of running intact.
Same reason valve doesn't make games anymore. They followed the money and licensing their engine did a lot more than making games. Any games they made were to showcase the engine.
They just happened to hit the goldmine with Fortnite.
I think the problem is also that there are many FPS multiplayer CTF games even if they are not all great, they all compete for attention in a crowded market. Destiny, Call of Duty and all their variants.
Roblox is the elephant in the room here which fills the niche for freemium, fun 3D experiences that run on basically any platform or device.
Can confirm. There are even growing numbers of high-quality games/projects on the platform (I explored it recently), including a fully interactive+realistic nuclear reactor and 1:1 DCS-like Airbus A320 simulator.
I suspect the popularity and ease of distribution/development on the platform makes it very attractive for developers with a dream.
Many of the games that actual kids spend time on are the purest expression of gaming slop (half-broken microtransaction gambling hell with schizophrenic flashing colors). Roblox and Fortnite's Islands system are both guilty of this. The problem is kids don't know any better and don't yet understand the value of money. The obvious response is "parents should handle this" and while I agree, there is no system to let them say "here are Robux/V-Bucks you can spend on quality content (e.g., Fortnite's Battle Pass is very well designed, quality content), but gambling slop is disabled".
Roblox accounts for about 50% of total video game play time, it’s insane how big Roblox is.
But not just Roblox. People are spending their time and money elsewhere too. Polymarket and sports betting for one.
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Roblox is indeed eating the world
With the downturn in Fortnite (and with it the dream of Fortnite as a platform), and apparent failure of Meta Horizon (at least on the Quest) . . . does that mean the entire concept of a 3D metaverse type UI is dead for another generation?
VRChat seems like it's doing perfectly fine. It's more like this concept is more niche than anyone seems willing to admit.
Roblox
Roblox is a product for the Toys R Us crowd. You don't project from products that work for them on to what sells to teens and adults.
Technically, you need to include the adult predators as recurring revenue too.
why is this such a talking point about roblox? couldnt this be said about literally any online platform ever?
Because Roblox has had many high profile issues with it and their response is much more tepid than other platforms.
The response from other platforms is placating regulators by verifying IDs. Is that what we want?
Considering that they aren't properly separating the two groups, I don't see this "response" as anything but a weak excuse to do what they wanted to do anyway.
No it’s definitely about regulators
Roblox now does the same
Because it's a big problem that they are generally not interested in truly solving
https://hindenburgresearch.com/roblox/
To quote just a section of the report:
Core to the problem is that Roblox’s social media features allow pedophiles to efficiently target hundreds of children, with no up-front screening to prevent them from joining the platform.
For example, in 2018, prior to Roblox going public, a 29-year-old was caught by police with 175 hours of video footage of him grooming and engaging in explicit behavior with 150 minors using online platforms, namely Roblox.
Media and non-profit exposés from 2020 to July 2024 revealed digital strip clubs, red light districts, sex parties and child predators lurking on Roblox. The National Center on Sexual Exploitation in 2024 labeled Roblox “a tool for sexual predators, a threat for childrens’ safety”.
Numerous criminal indictments from 2019-2024 allege that sexual predators groomed children in-game, ranging from 8-14 years old, then kidnapped, raped or traded sexual content with them.
Following years of scandals, we performed our own checks to see if the platform had cleaned up its act. As a test, we attempted to set up an account under the name ‘Jeffrey Epstein’…only to see the name was taken, along with 900+ variations.
Many were Jeffrey Epstein fan accounts, including “JeffEpsteinSupporter” which had earned multiple badges for spending time in kid’s games. Other Jeff Epstein accounts had the usernames “@igruum_minors” [I groom minors], and “@RavpeTinyK1dsJE” [rape tiny kids].
We attempted to set up a Roblox account under the name of another notorious pedophile to see if Roblox had any up-front pedophile screening: Earl Brian Bradley was indicted on 471 charges of molesting, raping and exploiting 103 children. The username was taken, along with multiple variants like earlbrianbradley69.
After we found a username, we listed our age as “under 13” to see if children are being exposed to adult content. By merely plugging ‘adult’ into the Roblox search bar, we found a group called “Adult Studios” with 3,334 members openly trading child pornography and soliciting sexual acts from minors. We tracked some of the members of “Adult Studios” and easily found 38 Roblox groups – one with 103,000 members – openly soliciting sexual favors and trading child pornography.
The chatrooms trading in child pornography had no age restrictions. Roblox reports that 21% of its users are under the age of 9, a number that is likely underestimated given that Roblox has no age verification aside from users seeking 17+ experiences.
Registered as a child, we were also able to access games like “Escape to Epstein Island” and “Diddy Party”. We found over 600 “Diddy” games, including “Survive Diddy” and “Run From Diddy Simulator”.
Since September 2nd, 2024, third-party monitor ‘Moderation For Dummies’ has reported ~12,400 erotic roleplay accounts on Roblox. These include everything from “rape/forceful sex fetishes” to underage users “willing to do anything for Robux”.
Users seeking sexual experiences on Roblox are so pervasive that there are thousands of Roblox sex videos on porn sites, inviting users of unknown ages to make explicit content on the platform.
We tested out Roblox’s experiences to see what else kids were being exposed to. We quickly encountered images of male genitalia and hate speech in Roblox’s “school simulator” game, which had registered 28.9 million visits with no age restrictions.
I say we ban children from the internet
1000 layoffs represents around 25% of Epic's total workforce.
Ouch, that is huge. I assumed this was more like 10%
The CEO is worth 7B+. 1000 employees at 100k/yr would cost him 100M - less than his net worth fluctuates on any given day and only 20% of other costs savings they have identified.
Executives care little about the stakeholders: the employees, the customers, the community. It's their company, too. They only care about investors and themselves. People who "own" pay a lower tax rate than those that "work". Let's fix that and make things great again.
I think you should reconsider the cost there. $100k/yr is likely well under the average for the people they're letting go. In addition, pretax salary represents only a portion, say 2/3 or so very roughly of what it costs a company to have an employee. Benefits packages and payroll taxes can cost a huge amount too.
This is 25% of their workforce; this isn't some sort of greed thing it's a serious cut to the companies operational ability due to the downturn of their product line.
Maybe he could destroy his wealth to keep the employees around a bit longer but it's better for everyone if they move on and the company has a legitimate opportunity to survive. Besides people don't want to be on corporate welfare anyways, they'd rather be part of a company where they can add meaningful value.
>Besides people don't want to be on corporate welfare anyways, they'd rather be part of a company where they can add meaningful value.
Funny. Those companies don't seem to be hiring. Everyone is doing layoffs. Maybe you said that wrong? People running companies don't feel obligated to employ, therefore everyone is now Someone Else's Problem.
As far as I can tell job postings in software are up this year. Executives love expanding, it's the most exciting part of the job. While there are many sectors inside software which may be doing better/worse, I can say my company is hiring, and I have no trouble getting interviews elsewhere if I want them.
https://fred.stlouisfed.org/series/IHLIDXUSTPSOFTDEVE
The difference is pay.
Although there is a slight (almost negligible) uptick in job postings, the salaries for those jobs is rapidly declining.
I'm not sure if that's true? There are a few companies in every industry who pay well above average, and then most jobs pay a more normal salary (110-150 would be my estimate). Maybe you're just not looking at the top companies anymore? Even if it was dropping through I don't see how that's relevant
> downturn of their product line
a product line that is still expected to make $6B this year plus a bunch of other massive IPs. Come on, if he can't keep the team together with that budget then he should step aside and let someone in charge who can.
If Fortnite were the only product with revenue, they would have $1.5 million in revenue per employee before layoffs
Why would the CEO waste his wealth on reviving unnecessary jobs?
Why wouldn't he? Why isn't he invested in the stakeholders?
> "The downturn in Fortnite engagement that started in 2025 means we're spending significantly more than we're making"
He is - the stakeholders are his shareholders, who don't want him to run a loss, and to whom he is responsible.
In 1 phrase, the source of most evils in modern society.
A minority of people (shareholders) holding the majority of people (employees) at gunpoint.
They are working for money, not coerced with a gun pointing at them. They are free to leave as they please and often do.
The vast majority of people have to work in order to leave and for the same majority leaving employment is not easy and frequently not an option because they risk being unemployed for long periods of time. Or when they do leave the new place is even worse.
*in order to live
This statement is divorced from the reality of the situation and, frankly, sounds like it comes from a position of privilege. Most job markets are not like the software developer job market where we can just leave and expect to find gainful employment with better pay and better opportunities within a couple of weeks.
Isn't he responsible for this downturn?
No.
Why keep the goose that lays the golden eggs alive when you can kill it and get all the golden eggs today?
Is that not an admission that his poor management and lack of vision cannot foresee any way to make profitable use of those people's labor?
A company raking in 5-6 billion per year can't find any profitable bets to make? Possibilities to invest in? All they can do is cut?
LOL. If you're that bad at capitalism then please resign and let someone else give it a try.
Reminds me of PG&E. So bad at being a for-profit electric company they need constant state handouts to guarantee profits. They made bad contracts so they need a PCIA fee for not selling me electricity. Hedging? Severing contracts? Arbitrage? Forecasting? Never heard of those, now make with the free coin! My son... if you are that bad at capitalism shut it down!
I agree with Warren Buffet's take here. A company that cuts or can only pump dividends is basically saying "we can't figure out how to make productive use of people and/or cash". What an unbelievable joke.
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Seems like Epic won the battle against Apple, but lost the war. My kids haven't played Fortnite since it was dropped from the Apple Store.
There are (were) ~5,000 employees at Epic. That seems like a huge number for company that has produced little more than various flavors of Fortnite and a failure of a store in the last 10 years.
Do keep in mind: they also develop, maintain, support, and market Unreal Engine, which is possibly the most advanced and innovative game engine out there. It’s used by tons of other studios (including AAA) and is used in other industries like space flight, automotive, etc.
If you look at the technical state of Unreal Engine 5, then how modern GPUs can barely run games without frame generation which also makes them look blurry, then you are not surprised. Its not just gamers but also developers who are fed up with the status quo of how games are done these days. The big use case for UE moved from technical excellence to churning through people who can work on your game for hiring convenience, because you don't have to train them on an inhouse engine. Its unhealthy to have this much fluctuation with hiring people, then if the game fails or succeeds (it doesn't matter), people are laid off anyway.
It is just mismanagement of the money they earned with fortnite, they failed to keep the momentum and stopped taking risks. The technical incompetency doesn't stop with UE5, it shows in the store, which is laughably bad and inefficient since forever. I think its good these people get a new chance to start working for companies who can put their skills and time to good use and value their expertise. Long term nobody working there would be happy with the way the software portfolio is moving downwards.
> ... they failed to keep the momentum and stopped taking risks.
This is a problem that infects all of the large studios now, from Epic to EA, Ubisoft, etc. My read on it is that it feels less risky to double-down on an exiting successful live service game like Fortnite or Rainbow Six Siege. That's probably true for ~5 years. After those ~5 years, it's far riskier to continue investing in the game than it is to start winding it down into maintenance mode while working on new titles or IP. The related risk is assuming that since the one title was huge that players are going to crave other titles in the same brand or franchise. For example, Ubisoft's assumption that Rainbow Six Extraction would naturally follow the success of Rainbow Six Siege.
These companies get addicted to the recurring revenue stream and pivot their businesses under the incorrect assumption they will last forever, at the expense of new projects.
There are three other submissions in the queue and likely more on this.
I know someone in Epic and they told me that its no secret inside Epic that Roblox is killing them. Why? He told me a story where a neighbors kid came by and wanted to play Roblox but he told the kid he didn't have Roblox. The child replied "It's easy! I'll show you!" and this 8 year old sat at his PC, downloaded a few MB client, signs in, selects a game and is playing within minutes. The game was a brain dead platform jumping game where you jump to the top of a tower. No enemies. No items. No anything. Just get to the top. Yay. At one point the kid fell down and the game offered to move him back to where he was for $3. Yup a fucking game hit a kid up for hard cash. The people who makes these games are child predators. Scum really.
Epics problem is Unreal can't be easily deployed like Roblox. You want to play Lego star-wars? You need to first download the base Lego game of 30GB then the 20GB Star Wars pack. A Roblox user just downloads a small client, signs in and is ready to play a stupid simple game that isn't 50+ GB. Unfortunately most of those games are not games but attention stealers that entice users to spend real money on NOTHING.
Shame that everything has been boiled down to an attention and money milking scam.
The difference is that Roblox has a thousand "attention stealers" which have enough gameplay and multiplayer fun to keep an eight year old entertained for a long time. Fortnite is just the same recycled concept over and over, with an interface that is difficult for a child on a console. There are a number of Roblox games that are genuinely well-designed and fun, don't let the graphics fool you.
(Also, eight year olds don't have $3 in Robux unless someone buys it for them, so blame the parents as well)
No, Epic's problem is that they saw Roblox's success and went "we deserve that too because we say so, let's go all-in on this market that is already dominated by an established player!"
Roblox isn't killing Epic, Epic is killing itself by desperately trying to steal Roblox's players when they have no reason to stop playing Roblox. Even if they released a 50MB Fortnite client that streams low quality assets like Roblox, it would be no different because those kids would simply keep playing what everyone else is already playing. Tim Sweeney making another tweet about his metaverse or whatever isn't going to change that.
It's a very straight forward letter without all of the usual fluff, which I appreciate. Bit it's concerning how much Epic still seems to be hanging their hat on Fortnite. Trends come and go and it seems unlikely to me that Fortnite will grow significantly in the future. It had its moment, they should be focusing on the next big thing.
Epic should learn from Valve. The only guy touching TF2 is a cleaning manager who dusts off serves once in a year.
And plenty of contractors.
Game is a little bloated and loads slow especially compared to Roblox. The other games are not as fun as the ones in Roblox either. Both have a lot of doo doo, but Roblox does have some neat indie gems. It reminds me of BYOND but in 3D. The launcher sucks, and there is nothing like Steam Input or RSS feeds for everything. I added steam RSS feeds for some games to my feed reader and I still use the client to check for updates for other games. There are a lot of small features that none of the other stores really have.
Interesting how not many comments talk about the game itself and how Epic may have driven their own players away with changes that players dislike. I’ve played for most of the life of the game pretty regularly and I’ve found myself growing tired of “yet another season full of movie/TV crossover junk”. You can tell they’re focusing on pulling money in via partnerships, and not paying much attention to “is this what players want”. Unsurprising you’d see player numbers drop.
500M in savings seems like huge amount. Just how unstable is their income? And just what else have they been burning money on to look at that sort of cost saving goal.
If you are a billion dollar company, 500m are in the lower range
Wow and I thought the amount of money my son pays for skins alone would be more than enough to keep the entire company afloat
Is there any reason Fortnite should be a "forever game" like Minecraft or Roblox? I haven't played it since it's so Linux-hostile, but isn't it still just a battle royale game with a building element?
Coupled with the recent price increase of V-Bucks, things do not look like they are shaping up well.
https://www.fortnite.com/news/fortnite-v-bucks-price-increas...
This one is sad for me as a Fortnite player and someone who lives in the town where Epic Games is headquartered.
The Valve comparison is apt. The difference is Valve built Steam as infrastructure first, then quietly stepped back from games. Epic did it backwards — they built the game first, then tried to force the infrastructure (EGS) into existence with money. Much harder to do it that way.
> Epic did it backwards — they built the game first, then tried to force the infrastructure (EGS) into existence with money.
Didn't Valve push Steam through HL2? It's a different kind of forcing of course, but still.
That just makes people install it it doesn't make people buy anything. I have installed epic store but I never ever even thought about buying a game there, I installed it since they give me free games so I'd assume most gamers have installed epic store. But getting people to install isn't enough.
I remember when Steam was just something I had to crack to play HL2 as a broke uni student. In the intervening decades I’ve shelled out for over 500 games on Gabe’s little experiment. Wild.
Valve built more games than Epic in the past 10 years. Epic essentially only released Robo Recall and Fortnite + extra content, plus a spinoff of Rocket League which was an acquisition. Valve released a couple of duds (Artifact, Dota Underlords) but also some good games: Half-Life: Alyx, Counter-Strike 2, and Deadlock. They also did "The Lab" and "Aperture Desk Job" which, while not full games, were quite good as demos for their hardware.
I'm sure any studio would trade their entire decade of portfolio to get where Fortnite is. Sony did in fact basically do that to great failure (despite Hell divers 2 being very well received, it's no Fortnite).
Valve built games first, and then a distribution platform for their games, and then opened it to others.
Speaking personally, the move to unreal engine 5 ruined the feel of the game. Somehow it had a very unique and polished gameplay loop that was as addicting as CS and the unreal 5 launch changed it, at least for the hardware I was running
"As the first-person shooter game Fortnite"
What? If the person writing the article is so unfamiliar with the subject they are writing about, they likely should not be writing about it.
Remove the reference, and that's most "news" in this era
For context, they recently increased the prices of the game's cosmetics significantly to, and I quote, "help pay the bills" [1].
Apparently, that wasn't enough, and the billions of dollars in revenue the game makes every year are simply too little to keep the lights on. So now they're laying off over a thousand people and cutting several official gamemodes, so they can continue paying hundreds of millions to the creators of AI slop modes like Steal the Brainrot [2].
It's becoming increasingly clear that Epic Games is a dysfunctional company that simply stumbled onto a golden goose by sheer luck, and now that the goose can't lay eggs any faster to keep the line going up, they're panicking.
[1] https://www.fortnite.com/news/fortnite-v-bucks-price-increas...
[2] https://www.fortnite.com/news/fortnite-developers-will-soon-...
500 millions in savings? They seem to have been burning lot of money. And relying on single game seems to not be working.
Also I wonder if their low cut on EGS is doing part of these problems...
Fortnite is 9 years old this year. Epic brought in biblical amounts of money from just this one property over this time. Where and how did they spend this money?
Let's see...
- Millions spent rushing out huge amounts of Fortnite content at a breakneck pace
- Millions spent organizing, designing and marketing 5 new Fortnite collabs every week
- Millions spent trying to wrangle Fortnite's spaghetti codebase as it crumbles under more than a decade of tech debt
- Millions spent trying and failing to keep the content pipeline flowing at a constant speed despite the tech debt
- Millions spent developing a failed Roblox competitor inside Fortnite
- Millions spent paying people to create awful AI generated games in their failed Roblox competitor
- Millions spent developing their own "metaverse" of brand-focused modes that nobody plays in their failed Roblox competitor
- Millions spent developing a failed Steam competitor
- Millions spent paying off developers to release their games exclusively on their failed Steam competitor
- Millions spent giving away free games every week on their failed Steam competitor
- Millions spent lining executives' pockets
It's really not hard to see where all that money is going.
Would it be possible that they become less generous with unreal engine and its free tier ? Right now it's 5% beyond 1 million revenue, free before.
Probably not. I imagine most people making under 1m won't fund much more overall compared to the big studios.
But the contract can always change (look at Unity). That's a part of why it's best to own your tools if you're able to.
Duplicate
https://news.ycombinator.com/item?id=47504996
Does anyone know if this is mainly going to affect people in Cary, NC?
Yes, as reported by local media https://www.wral.com/business/epic-games-cary-layoffs-1000-5...
Another case of reactive management leaving employees to bear the consequences of executive decisions. Forcing 16% job cuts despite years of financial warnings says a lot.
Not a single comment mentioning UEFN? Epic's failed attempt at copying Roblox?
Epic has been pissing money away paying "creators" to churn out slop "red versus blue" modes/maps for Epic's meta-verse.
A lot of these maps are effectively hello world applications. Like the lowest of low quality. You add in a few weapon spawns, a few prefab buildings, and you're done. Time to get yourself a few thousand a month.
Epic was very lucky with Fortnite. Originally they showed the game at GDC as more of a mining, resource collection and building game. Frankly it looked boring.
Changing that to a shooter with the Battle Royale mechanic was a $10 billion win. They have managed it pretty well, but it seems they just over extended without innovating to attract and retain players.
And yet somehow the stats show that most likely 2026 is easily on track to be a bumper gaming year, surpassing 2025.
Revenue wise they might be down from the 6bn in 2025 to somewhere in the mid 5's, so might as well get rid of 1000 employees while handing out bigger bonuses to senior staff.
Its kind of a miracle that any working game gets made on unreal engine considering how buggy the editor is.
Oh no, the poor shareholders
constant growth for stockholders ruins all it touches
> Fortnite "Usage"
I like this choice of word, it seems fitting.
Since when do people refer to game playing as usage?
They have way too many employees for what they do.
Imagine if they spent less time complaining about App Store and more time on increasing revenue?
Imagine if Nintendo cut 20% of their workforce because a 9 year old game started to lose popularity.
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Discussion on source: https://news.ycombinator.com/item?id=47503239
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Take it to Reddit.
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Is this supposed to be a joke?
I hate that Tim got lucky two times with initiatives of employees that went against his will. I hope epic falters.
More info on this? What are you referring to?
My guess is one of them is Fortnite.
Rumor is Fortnite was stuck in development hell for a decade and was used as a punishment assignment for under-performing devs.
The Fortnite team added battle royal mode on a whim after a mediocre initial release and it has churned out five billion a year in revenue every year since.
Fortnite usage fell? Maybe there's hope for humanity after all.
Fortnite made more money than God during its prime years. Where did that money go?
Just to hazard a guess: the majority of this money went to investors and executives and now, when the pot is empty, the employees pay the price.