The epic boss Tim Sweeney wants to break the monopoly of Steam. He paid a lot of money for this. Ironically, the legal dispute with Apple now reveals what the price of the exclusive Epic title is. And how much damage it caused. What kind of battle is that? In 2019, Epic began bringing games exclusively to their stores. The primary purpose of exclusivity is that the title will not be published by competitor Steam.
Sweeney said at the time that he wanted to break the monopoly of Steam:
Specifically, he worried that Steam should not withhold 30% of its revenue from games on its platform.
For developers and publishers, this is a catastrophic situation, leading to a decline in in-game quality.
Epic sees these exclusive products as disruptive actions, which account for only 12% of its sales.
Epic also said: When Steam only holds 12% of the shares, we will stop the entire transaction.
However, Epic has announced more than 100 exclusive products in the next two years, including Chivalrous 2 and Far Cry 6.
However, as it appears in the current legal dispute with Apple, the struggle with exclusive products is very expensive.
How much does Epic invest? According to a report on the PC Gamer website, in 2020 alone, the minimum guaranteed cost of these exclusive deals is $444 million. These are because Epic promises a certain amount of revenue to developers. If that doesn’t happen, Epic will pay the amount owed by itself.
On the other hand, the revenue of these games is only $265 million.
According to Apple’s documents, due to the 2019 figures, the loss should be at least 330 million U.S. dollars.
Epic chaos, everyone has to pay a lot for it.
Where do these numbers come from? These figures come from the documents (via Scribd) in the legal dispute between Apple and Epic. This file was created to show that the Epic Store cannot be compared with the iOS App Store.
According to Steve Allison, Vice President and General Manager of Epic Game Store, and Joe Kreiner, Vice President of Business Development, these documents indicate that Epic is related to the store:
A loss of US$181 million in 2019 and a loss of US$273 million in 2020
Expected to lose another $139 million by 2021
Epic stores have a total loss of nearly $600 million
The company believes that Epic Store will not be profitable until 2027. However, Epic itself does not call it a loss but an investment.
Legal disputes also caused losses: Epic itself competes with Steam and against the Apple App Store.
In August 2020, Epic decided to sell V-Bucks currency as Fortnite directly in the iOS version of the game. Previously, the money had to be purchased through the App Store, which resulted in 30% of sales going to Apple.
Therefore, Apple threw out Fortnite in the App Store, and Google followed suit.
Then, Epic Games sued Apple and Google.
Since then, Fortnite has not been found in the App Store or Play Store.
Sweeney revealed in an interview in February 2021 that he is trying to change the industry through Epic Games. He tried again to ensure that Apple would not retain 30% of its revenue.
He also admitted that litigation costs are high. However, he emphasized that Epic is an independent company, so they can conduct such litigation and put the loss first. Sweeney still holds a majority stake in the company, but the Chinese giant Tencent owns about 48.4% of the shares.
Robin Hood represents certain people.
They want to make money from wealthy companies that only offer games on their platforms and then provide them to the poor, namely developers and publishers. But this only works in a limited range.
Because in all respects, the 2020 Game of the Year on Steam shows that players prefer the platform. Red Dead Redemption 2 was released on Epic Games in November 2019 and only on Steam in December 2019. Even so, it is much more successful on Steam than on Epic.