Epic will lose at least $330 million because of its battle to gain market share from Steam. Mainly because of the free games they offered in Epic Games Store.
PC Gamer reported that Epic’s legal fight with Apple makes us kind of understand how much Epic is spending on Epic Games Store, including that it committed around $444 million to exclusivity deals in 2020 alone.
So how did they spend this much money? It went to “minimum guarantees” for the games that were exclusive to Epic Games Store for this year. Because of the fact that their games won’t appear on Steam, developers and publishers wanted some guarantee that their games will sell enough in Epic Games Store. This was what the money spent on.
Epic reported that players spent $700 million on the Epic Games Store in 2020 in Epic’s end-of-year report. But the thing is these third-party games are only accounted for $265 million of that money. So this reveals to us that Epic has yet to earn back the $444 million to get everything straight. Apple explains that Epic is going to lose “at least $330 million in unrecouped costs from minimum guarantees alone,” if 2019’s deals are thrown in as well.
But Epic already shared response to these claims. And it says that Epic expects to Epic Games Store to start earning annual profits in 2023. Also while Apple says that it is losing money, Epic claims that it is actually investing money.