> "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.
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"
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
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'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.
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).
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'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
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%.
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
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.
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?
> 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.
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.
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...
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.
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.
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'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.
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.
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.
> "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.
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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) .
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.
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.
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.
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.
> 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
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.
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.
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.
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...
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.
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.
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
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.
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.
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.
> 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.
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.
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 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.
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! )
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.
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).
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.
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.
> 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.
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.
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.
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.
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.
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".
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.
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.
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.
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.
>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
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?
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.
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
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.
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.
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 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.
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.
> 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.
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?
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.
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.
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 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.
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.
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.
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.
Haven’t you been paying attention? That’s not how we do things in business anymore…
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'll probably turn a division of Microsoft that usually loses money into one that loses...more money.
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).
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.
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
No but it has to be at least nicer and they didn't manage that.
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.
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.
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
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.
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?
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.
No? Epic charges 12% (with the first $1m free) vs. Valve’s frankly extortionate (i.e. industry standard) 30%.
Re: value propositions: Steam's 30% reduces to 25% after $10M made, and 20% after $50M.
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.
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.
EGS is currently bad and trying to position themselves as a Steam alternative when they simply are not even close to the same quality.
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
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.
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.
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.
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.
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.
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.
Roblox predates Fortnite by a decade and is only getting more popular over time
You can't just bet the farm on dropping a new $5B/year game.
Most game companies are a tiny fraction of that size. Even most AAA games are made by teams of hundreds. Not teams of thousands.
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
I know they're sponsoring a bunch of ARM and Linux projects as well.
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.
Mihoyo literally prints money with predatory gacha
Riot has had several layoffs in recent years
Roblox loses tons of money every year
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.
(Not saying this is justified, of course. I think Unity is pretty much doomed.)
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.
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.
Afterwards depends on how they manage to keep surfing the success wave.
Basically.
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.
Discretionary spending is the first victim in a recession.
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.
A hardware company pivoting to the AI bubble has literally nothing to do with the profitability of software.
Independence of paying Windows licenses or Microsoft store taxes, sure.
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 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.
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.
I though my grievances with Epic are primarily because we never got Jazz Jackrabbit 3.
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.
Didn't know about the lawsuit though, I will give that a look.
They need that and the modding community to keep the game alive so that new players buy a copy on phone/console/etc.
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.
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)
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...
part 2: https://www.youtube.com/watch?v=w_UF_4gZclI (Mojang screwed us, now we're suing them)
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...
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.
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.)
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...
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?"
Twitter. I despise musk, ftr.
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.
* 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...
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.
All my games are still installed and still work.
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.
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.
epic games doesn't know how to implement oauth (rant) : https://smileplease.mataroa.blog/blog/epic-games-doesnt-know...
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.
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.
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?
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.)
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.
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.
Anway, it's not quixotic IMHO.
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.
There must be some fundamental problem with either developers or management system or both...
And doing this requires including a near complete web browser with piles of added hooks, obviously.
We are Legion.
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.
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.
>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
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.
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.
The wording of the announcement is better than the usual corporate non-speak too.
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'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.
I suspect the popularity and ease of distribution/development on the platform makes it very attractive for developers with a dream.
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.
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.
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.
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.
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.
https://fred.stlouisfed.org/series/IHLIDXUSTPSOFTDEVE
Although there is a slight (almost negligible) uptick in job postings, the salaries for those jobs is rapidly declining.
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.
https://news.ycombinator.com/item?id=47504996
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.
(Also, eight year olds don't have $3 in Robux unless someone buys it for them, so blame the parents as well)
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.
Didn't Valve push Steam through HL2? It's a different kind of forcing of course, but still.
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.
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.
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.
This.
Also I wonder if their low cut on EGS is doing part of these problems...
I like this choice of word, it seems fitting.
- 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.
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.
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.
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-...
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.