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News video games 07 August 2021, 20:51

author: Paul Musiolik

Epic Games Store Won't Turn a Profit Until 2027 at the Earliest

Epic Games lost nearly $500 million on its store. The court dispute with Apple brings new information on the scale of the financial flop that is EGS so far.

IN A NUTSHELL:
  1. New documents from Epic vs Apple trial have surfaced online. They show that almost $500 million was sunk into EGS;
  2. The store is not expected to start making money until 2027.

Epic Games has invested nearly $500 million in the store since launching it in 2019. Since day one, EGS has been in the red and this condition will last until 2027. Because that's when, according to court documents in Epic Games vs Apple case, the corporation expects to end subsidizing the business.

Yesterday we informed about the fact that only one game offered exclusively on EGS has turned a profit - Satisfactory. The amount wasn't spectacular, though, as EGS assumed earnings of $11.5 million (and that's what was paid for the exclusivity), while Coffee Stain Studios' title brought in $11.6 million to the company's treasury. The other games were more or less financial busts (Metro Exodus earned 22.2 million less than Epic Games' accountants expected).

So far the dispute with Apple brings only tasty morsels about the operation of Epic Games Store. New documents regarding this litigation have surfaced online, revealed Apple's aggressive defense, which scores points on EGS.

"Epic Games Store is unprofitable and not comparable to the App Store, and will not be profitable for at least multiple years, if ever. Epic lost around $181 million on EGS in 2019. Epic projected to lose around $273 million on EGS in 2020. Indeed, Epic committed $444 million in minimum guarantees for 2020 alone, while projecting, even with 'significant' growth, only $401 million in revenue for that year. Epic acknowledges that the trend will continue in the immediate future: Epic projects to lose around $139 million in 2021."

Such words came from Apple's lawyer during the hearing. Moments later, the thread continued by pointing out that Epic Games will not start making money on the store before 2027.

"If we take the lower figures, that adds up to an investment on Epic's part of $493 million. Epic itself has acknowledged that "unrecouped costs" will amount to at least $330 million. At best, Epic does not expect EGS to have a cumulative gross profit before 2027."

However, when we look a few months back, we find a statement from Tim Sweeney, who is happy with the way EGS is operating and believes that the losses, in this case, are an investment that is worth it. Interestingly, the above-linked post mentions that breaking even is expected in 2023. Is Tim Sweeney just being overly optimistic for the sake of shareholders or does he know something we don't?

  1. Epic Games Store - official website
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