Epic Games Store Loses Hundreds of Millions of Dollars a Year

The Epic Games Store posted a loss of about $181 million in 2019, an expected loss of $273 million in 2020 and the 2021 projection is a loss of about $139 million. This is evident from documents in the Apple versus Epic Games lawsuit.

A major expense for Epic Games is the minimum guarantees; amounts of money that Epic Games gives as a sales advance to publishers or developers in exchange for an Epic Games Store Exclusive. In 2020, for example, 444 million dollars went there. This is apparent from published court documents that Eurogamer has gone through.

Epic states that “in this early phase of the EGS’s life, it has deliberately spent a lot of money on marketing and acquiring new users in order to gain market share.” Epic expects its digital store to be profitable by 2023. The twelve percent that Epic Games collects from every transaction would be enough for the daily costs of the store.

Apple, opponent in the lawsuit over the App Store charge of 30 percent, is critical of the numbers. “Epic doesn’t expect the EGS to start making a gross profit until 2027 at the earliest, but it may never become profitable. Until then, at least it will have to get funding or get money from other parts of its business.”

Apple further accuses Epic Games that the lawsuit is a means to combat the waning interest in Fortnite. Epic would have seen that happen and decided that Fortnite should become a platform for other developers to create content for. It would then be for sale in Fortnite and Epic can then put a percentage of it in its pocket. The 30 percent that Epic would have to hand over to Apple alone for transactions in the iOS version of the game would pose an “existential problem” for Fortnite. Epic denies the whole story. A judge will consider the case in May this year.

Epic vs Apple Case Announcement, August 2020