Epic Store Unprofitable, but Keeps Giving Away Free Games Anyway

A screenshot of the Epic Games Store on November 7th, 2023— day one of its trial against Google over revenue share.
A screenshot of the Epic Games Store on November 7th, 2023— day one of its trial against Google over revenue share. (Image credit: Epic Games Store)

Epic Games Store has yet to turn a profit. This was revealed in day one of the long-awaited Epic v. Google trial, when Epic boss Steve Allison took the stand. While this is something of a minor detail in the larger scheme of The Verge's reporting of the Epic v. Google trial, it speaks volumes about how Epic is approaching the PC gaming space.

For the uninitiated, the Epic v. Google trial has been building since Epic filed a lawsuit against Google in 2020 over their revenue share model for in-app purchases. Epic Games and Tim Sweeney in general maintain an outspoken stance against high revenue share, to the point of referring to Steam's model as "Game Developer IRS".

While Epic hasn't taken legal action against Steam in the PC space, Google actually isn't their only lawsuit over revenue share in the mobile gaming space. Epic also sued Apple and lost back in 2021, though they're still appealing that ruling as recently as September 2023.

For a company willing to take its competitors to court over perceived unfairness, this comment from Epic Games is fairly revealing of deeper problems with their business model. Epic claims to be competing against Steam for the sake of gamers and developers, but their model of paying for exclusivity has largely only drawn them ire within the PC gaming space. Epic's licensing deals and free games don't matter if they can't actually provide a service as good as or better than Steam.

While the final results of Epic's ongoing legal battles against digital platform holders remain to be seen, the company itself seems to be a poor example of its own argument. While they did manage to get Steam to budge on the 30 percent revenue share for games that sell more than $10 million, those titles still have a 25 percent revenue share that goes to Steam in exchange for hosting. Steam of course remains massively profitable.

Epic's revenue share is much more generous in comparison, only requiring 12 percent from developers (and even cutting their Unreal Engine fee for EGS sales). As sweet as that sounds, even the most successful EGS timed exclusivity deals reveal just how much faster games sell on Steam. Perhaps Epic should spend more time improving its platform instead of throwing stones in a glass house?

Freelance News Writer
  • peachpuff
    Kind of sounds like amazon when they first started, although I don't know if any vc's who are pouring money into it.
    Reply
  • abufrejoval
    Sorry, but this isn't news. It's an opinion piece and I avoid social networks for that.

    If you want your opinion on this news site, the forums should suffice.
    Reply
  • tummybunny
    Their business model rewards people that don't pay for games. Why pay for something that will eventually become free?
    Reply
  • waltc3
    EPIC is simply trying to break into a well-entrenched business dominated by Steam for many years. It's tough, and someone trying to do that needs lots of working capital, which EPIC apparently has. The free games are simply to get people in the habit of visiting the EGS site as often as possible. Sweeney has bitten off a lot. I'm thinking Sweeney is where Valve was 20 years ago--he's growing tired of the game-engine race and wants to transition, as Valve did so long ago, to something less demanding but financially rewarding. I have nothing against EGS at all, and as far as the exclusivity deals go, EGS started giving customers a break on the list prices--which the developers could afford with the reduced distribution fees. I certainly applaud that.

    All of this is designed not to make profits, but to get people, and game developers, used to the EGS. People are wrong to get mad at EPIC because of the exclusivity deals--because it's the dev/publisher who decides to take the exclusive deals, knowing that his game won't be distributed by any other outlet like Steam or Gog for a set period. EGS can make the offer, but the dev has to be the one to decide if the reduced distribution is worth the discounted fees. Time will tell if EPIC will be successful, of course. I wish EPIC lots of luck with Google.
    Reply
  • punkncat
    Call me old fashioned, whatever, I pine for the days that all the game devs wanted to be on Steam. Now I have something like 5 game loaders on my desktop and a good portion of the games open two of them at the same time.

    I have not been a huge fan of much of their library. I messed around with Fortnite for a bit. EVERY SINGLE TIME I logged in, here is this giant update to it. Really stinks to have a data cap and have to deal with that. I haven't been fully enthused with a good portion of their titles TBH. Them closing shop wouldn't be a drop of water in my care pail.
    Reply
  • JamesJones44
    punkncat said:
    Call me old fashioned, whatever, I pine for the days that all the game devs wanted to be on Steam. Now I have something like 5 game loaders on my desktop and a good portion of the games open two of them at the same time.

    I have not been a huge fan of much of their library. I messed around with Fortnite for a bit. EVERY SINGLE TIME I logged in, here is this giant update to it. Really stinks to have a data cap and have to deal with that. I haven't been fully enthused with a good portion of their titles TBH. Them closing shop wouldn't be a drop of water in my care pail.
    Sadly you should never want one company controlling distribution, it will just cause the price of the things you want increase unchecked.

    What we really should be asking for is a standard that can be followed by all of the distributors so we don't have to have 70 apps installed just to play/buy a game.
    Reply
  • stonecarver
    Man I hope they don't go away through the years I have a built up library of 385+ of Epic games.
    Reply
  • emike09
    If Epic's game launcher was good, I think more people would use it. Give us a freaking review system!!! Epic is in the thrones of Netflix and other streaming services, where there isn't a global consensus on a game's review. Just watch our sh1tty movie we paid money to make!!! They're happy to sell us a $70 game that literally nobody likes, and the end-user is disappointed. Steam let's us see that. It keeps developers in check, and lets the end-user make an educated decision on how they spend their money.

    On top of that, the Epic achievement notifications are absolutely annoying, and there's no official way of disabling them. I've found a way, but it's super hacky.

    No big picture mode. No real community. The launcher is resource heavy. No VR. Free games are crappy games. No mobile support. It's yet another application to install that wants to use resources in the background. It's janky, it's old-fashioned, and there is no reason I'd ever want to buy a game from the EGS. The only games I have on EGS are the ones I really wanted to play, but aren't available on Steam.

    I do think Steam needs to reduce their fees, but unless you have a better launcher platform than Steam, you'll never win. Let's quit with all these launchers.
    Reply
  • dalauder
    Too many people are complaining about Epic's platform. As far as I know, there are three major game platforms that actually work: Steam, Gog, and Epic. The rest (Ubisoft, EA/Origin, etc.) barely work at all and make gaming harder/worse. If I get a game on Epic, it actually works. That's good enough for me.

    As far as their lawsuit...I don't know what that's about, but I'm glad there is a competitor to Steam...as great as it is.
    Reply
  • dalauder
    emike09 said:
    If Epic's game launcher was good, I think more people would use it. Give us a freaking review system!!! Epic is in the thrones of Netflix and other streaming services, where there isn't a global consensus on a game's review. Just watch our sh1tty movie we paid money to make!!! They're happy to sell us a $70 game that literally nobody likes, and the end-user is disappointed. Steam let's us see that. It keeps developers in check, and lets the end-user make an educated decision on how they spend their money.

    On top of that, the Epic achievement notifications are absolutely annoying, and there's no official way of disabling them. I've found a way, but it's super hacky.

    No big picture mode. No real community. The launcher is resource heavy. No VR. Free games are crappy games. No mobile support. It's yet another application to install that wants to use resources in the background. It's janky, it's old-fashioned, and there is no reason I'd ever want to buy a game from the EGS. The only games I have on EGS are the ones I really wanted to play, but aren't available on Steam.

    I do think Steam needs to reduce their fees, but unless you have a better launcher platform than Steam, you'll never win. Let's quit with all these launchers.
    Did you ever use Trillian back when AOL Instant Messenger (AIM) was big? My high school used MSN Messenger, some people used Yahoo! Messenger, then everyone in college used AIM. So you could log into all three through Trillian (as well as ICQ and some others) and message everyone from the same place. It was amazing!

    That's what gaming needs. But Trillian didn't have a store...sigh.

    Also...Facebook came along a couple years later and ruined all of that.
    Reply