[glanzwulf]

> For a while now, we've been spending way more money than we earn

I guess giving away free games and not charging deveveloper (or charging very little depending on exclusivity deals) wasn't the best financial decision. Who would've thought?

Shame about the people impacted by this, I actually know some of them, hope they find something quick.

[jncfhnb]

I would wager the free games have been a net positive to their bottom line in terms of customer acquisition. Most games are not big ticket items, and the ones that are are usually out of a push to sell new DLC or a new sequel. I’m guessing it’s not that expensive.

I buy everything off of EGS if I can because of it, even though the EGS is trash

[kipchak]

Some of these numbers came out in the Apple suit, it worked out to about $2.37 per user with 7% going on to pay for something giving a cost of $33.23 per paying customer acquired, and an estimated revenue of $40 per paying customer.

https://www.theverge.com/2021/5/4/22418782/epic-games-store-...

[mywittyname]

They are trying to break into a pretty entrenched marketplace. Steam has a huge head start, EA owns the rights to some of the best selling franchises in the business, and Xbox marketplace has the backing of Microsoft.

Their options to become a major player are limited. Aggressively spending money on customer acquisition was probably the best move they had. Pulling their new games from competing stores risks impacting their game sales. Relying on organic growth would probably see Epic Game Store stuck as another tertiary, niche marketplace, like Gog.

It may not have worked out like they hoped, but it wasn't a bad play.

[speeder]

It was a terrible play, solely because their store suck.

From very early on, gamers were VERY vocal of what they wanted from Epic store, and Epic didn't deliver, instead they shoveled money into the fire basically.

Example of stuff that money could have better been spent on:

1. Discussion/Comments 2. Review system 3. Functioning shopping cart 4. Linux support (instead Epic did the opposite, for example buying Rocket League and removing Linux support) 5. ability to work with other stores (like Gog Galaxy does)

and so on.

Instead they choose to have a shitty, basically unusable store (that by the way, killed an older laptop GPU of mine by sending it to 100% in a screen that was only text, until the thing burned itself down), and "bribe" both creators and gamers, hoping this would replace an actual good product.

[glanzwulf]

I'd argue it was a bad play, they gambled on something others had gambled and failed, and just as the rest they didn't even put a dent in the market. All they did was overspent their resources and now have to resort to layoffs.

You mention EA, and they did try to break into the market and left steam for a while... they had the money, the franchises, the personnel and they couldn't do it. Now they're back on steam. Anyone else would look at what happened and would learn from their mistakes.

[myrmidon]

To put things in perspective: They had 2k employees in 2020 and grew to ~6k now.

To me, growing your employee numbers like that seems to be orders of magnitude more costly and risky than licensing some games to give away for marketing.

Having to lay off some people after growing quickly by ~200% does not seem like that big of a failure to me...

PC Magazines in the 2000s also managed to do regular game giveaways just fine (while being much smaller than even 2020-Epic), and I would wager they had razorsharp margins and much less revenue, too.

[jamesgeck0]

It would have been difficult for Epic to learn from from EA and Ubisoft's mistakes as they didn't return to Steam until well after the Epic Store launch.

[dvngnt_]

they could have saved more money by competing on features like a shopping cart instead of exclusive deals and free games

[justin66]

> I guess giving away free games and not charging deveveloper (or charging very little depending on exclusivity deals) wasn't the best financial decision. Who would've thought?

This stuff wasn't the problem at all. By all accounts the free game giveaways have achieved their intended purpose and they are going to continue doing them. Their engine licensing business is looking better and better as Unreal's only big competitor has made a habit of sabotaging themselves.