Documents show what Epic pays for free games and earns from Fortnite
Documents have been released in the lawsuit between Apple and Epic showing what Epic pays for giving away free games. In a period of 9 months, it was about $11.7 million. Epic also shows that in three years Epic had a turnover of about 14 billion dollars.
Between December 14, 2018 and September 26, 2019, Epic gave away 38 games for free through the Epic Game Store, paying around $11.7 million to developers. The games were claimed a total of 105 million times and it brought Epic about 4.9 million new users. This brings the ‘cost per acquisition’ to $2.37 per user.
The numbers are contained in court documents released in the Apple-Epic lawsuit. That became noticed by the creator of newsletter GameDiscoverCo. Epic usually paid several hundred thousand dollars to developers, outliers being Batman: Arkham, Subnautica and Mutant Year Zero, for which Epic paid 1.5, 1.4 and 1 million dollars respectively. Epic paid the least for now more than ten years old indie game Super Meat Boy: 50,000 dollars.
Inside and Celeste cost Epic the most per new user. The company paid $800,000 and $750,000 to give away those games, which brought in about 72,000 and 62,000 new users. The costs are therefore 11 and 12 dollars per new user.
All free games have been claimed at least a million times. Batman: Arkham was the most popular, being claimed 6.5 million times. It is striking that Epic paid nothing for the giveaway of Metro: 2033 Redux, while that game was downloaded 4.5 million times. It may have been an agreement of a larger deal, for example around Metro Exodus, a game that was exclusively available in the Epic Games Store for a year.
There are no figures available for games after September 2019. As a result, it is not clear what Epic paid for the giveaway of Grand Theft Auto V in May last year and how many users that generated. Presumably, that was Epic’s biggest giveaway to date. This was apparent from the pressure surrounding the game’s release and the increase in the number of active users.
The documents also detail the Borderlands 3 exclusivity deal between Epic and Take-Two. Epic paid $115 million for it. Of that amount, $80 million was a “sales guarantee.” In the first two weeks after the release, that amount was almost fully achieved.
Another document shows that exclusive games affect the sales of the Epic Game Store. When an exclusive game appears, the daily turnover increases. In 2019, the release of Borderlands 3 saw the biggest spike.
Fortnite good for about $ 14 billion in revenue
The lawsuit also details Epic’s earnings from Fortnite. The company showed figures from 2018 and 2019, which show that Fortnite had a turnover of 5.5 and 3.7 billion dollars in the first two years after its release. That equates to $9.2 billion in two years.
The revenue from licenses on the Unreal Engine and from the Epic Game Store is many times lower, because the total revenue of Epic in the same period was 9.8 billion dollars. Detailed figures for 2020 are not available, but Epic CEO Tim Sweeney said during the lawsuit that the company had sales of $5.1 billion that year. Assuming that this is again largely attributable to Fortnite, the total revenue from the game so far amounts to about 14 billion dollars.
Epic vs Apple – Lawsuit Over Commission
The lawsuit between Epic and Apple began on Monday in the United States. The case revolves around the ceding of a portion of the income from in-game purchases. Apple asks a 30 percent commission from major developers like Epic, but the Fortnite maker disagrees. The case started when Epic introduced its own payment system in the iOS version of Fortnite, bypassing the payment to Apple. Apple then removed the game from the App Store.
The lawsuit will last three weeks, but regardless of what the outcome is, it is likely that it will be challenged by the injured party. The case is therefore likely to last much longer. In fact, the case is not only about Fortnite and the App Store, but about the general revenue model of download stores that charge 30 percent commission. There has been a lot of discussion about this for several years now.
Microsoft recently lowered its commission for PC games in the Microsoft Store on Windows 10 to 12 percent. For Xbox games, that’s still 30 percent. Apple lowered its small developer commission to 15 percent late last year, but developers earning more than $1 million a year continue to pay 30 percent.
The lawsuit, partly in court and partly via dial-up connections, started tumultuously. Initially, the court was unable to mute the sound of the public line. About two hundred interested people called in and they spoke with slogans such as ‘bring Fortnite back to mobile’ and ‘liberate Fortnite’. The line was muted after twenty minutes.