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$130m Loss Expected for Epic Games Store Exclusives in First Wave

Gamezone

Gold Member
According to documents sourced from the Epic vs. Apple legal battle, it looks like the first 23 games it gave away are going to lose Epic Games a cool $130 million.

Take Metro Exodus as an example. It launched on the Epic Games Store on February 15, 2019, and the court documents say that Epic Games paid out $37 million in minimum guarantees. However, the expected shortfall is 22.2 million, meaning that Metro Exodus made less than half of the revenue Epic Games expected it to. (As with most Epic Games Store exclusives, Metro Exodus launched on Steam roughly one year later.)

 

Gamezone

Gold Member
It's a bit sad. Features like achievements and user profiles have been "up next" on their road map for a long time, and the screenshots they posted of the concept look much better than Steam's, but they never release them. Most features was headed for late 2019, and we're still waiting.
 
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GHG

Member
Uhh ... why?

But you know this kind of loss leader activity is part of their current strategy right?

They are treating the PC gaming ecosystem as if it's a console one.

If you only sell software there is no need for a loss leader strategy, people will go wherever they see value. They should have spent that money creating value instead of going around moneyhatting a bunch of games thinking people would take kindly to it.
 

ClosBSAS

Member
Wait ... you're upset that some games went to Epic instead of Steam? Who the hell cares about which launcher a game is stored in?

Is this like the PC equivalent of "console wars"?
I care. I would never buy on epic. I just wait for steam release.

Plus we all knew saying metro exodus sold twice as much as last light lol when last lights peak was 16k. Its not that much. Before being taken off steam it had 10k on steam based on pre orders alone

We all knew it was a farse and this just proves it. Egs is there to take games away from steam, not to compete.
 

Gamezone

Gold Member
Wait ... you're upset that some games went to Epic instead of Steam? Who the hell cares about which launcher a game is stored in?

Is this like the PC equivalent of "console wars"?

Let me guess, you are a console gamer? Apparently many care. Sea of Thieves sold more than 2 million copies on Steam after being Windows Store and Gamepass exclusive for years, but Microsoft didn't work as hard as Epic to piss people off. Reddit even have their own fuckepic community with almost 40k members.
 

IntentionalPun

Ask me about my wife's perfect butthole
I mean.. if it wasn't something that was supposed to cost Epic money, the pubs wouldn't have taken the deals in the first place.

(EGS sucks tho)
 

kingfey

Member
Epic wasnt kidding when they said it was long term plan. For those who dont know, Epic is betting on the game, like netflix did.

Netflix announced Tuesday in its fourth-quarter earnings report that it would not “need to raise external financing for our day-to-day operations,” a significant move for the heavily indebted company.

In less than a decade, the streaming giant borrowed over $16 billion to feed its titanic appetite for content. The reason: It didn’t make enough money to cover both its entertainment productions and its business costs, like payroll and rent and marketing.

That fact has caused a longstanding gripe over Netflix’s business model, and it’s why some observers have long argued that Netflix is a debt-ridden house of cards that would eventually come tumbling down.

Reed Hastings, Netflix’s co-chief executive and co-founder, expected Hollywood would soon catch up in the streaming market, and the company stockpiled content as quickly as possible. To finance the hefty licensing and production costs, it borrowed the money. And kept borrowing.

The risk was clear: If Netflix didn’t generate enough cash by the time the debts came due, it would be in serious trouble. Mr. Hastings was betting that the company could attract subscribers (and raise its prices) faster than the debt clock was ticking. (Netflix was surprised that Hollywood waited years to jump into digital television, giving it an even bigger lead.)

The gambit seems to have worked. The company will still have $10 billion to $15 billion in debt, but it said it now made enough revenue to pay back those loans while maintaining its immense content budget.

The company said it added 8.5 million customers in the fourth quarter, for a total of 203.6 million paying subscribers by the end of last year, as the coronavirus pandemic fueled a surge in streaming services. The company has about 66 million customers in the United States. Netflix anticipates adding six million total subscribers in the first three months of this year.

Getting to over 200 million subscribers allowed Netflix’s operating profit to expand significantly, jumping 76 percent in 2020 compared with 2019. The company also said it would consider buying back some stock, helping to lift the value of its shares. Netflix’s stock jumped more than 12 percent in after-hours trading.

The company made $542 million in profit on $6.64 billion in sales in the fourth quarter. Investors had been expecting $625 million in profit and $6.6 billion in revenue, according to S&P Capital IQ.



Here is what netflix did, to reach where they are. Epic is on that road. Once their store users gets expanded, and get more exclusive, they will start to make profit. This is why they are heavily investing it now. PC is a big nomand land. With steam being lazy, Epic wants to brand itself as the next steam. With UE5 on their helm, they will have enough resources to expand their epic store.
 

TheGrat1

Member
I am confused. Does Exodus have microtransactions or something? How did they expect to generate any revenue from a game they were giving away? How did they generate any revenue from a game they were giving away?
 

Dr Bass

Gold Member
Actually yes it is and that's precisely why people have a problem with it. Why is there a need to bring console war behaviour and business practices to an open platform?
That's the point though.

It's an open platform, people can release whatever they want with it?

Doesn't Epic take far less money from developers to publish on their platform? This a good thing, and the very thing an open platform encourages. Stronger competition, more innovation, lower costs.

Steam should just have an outright lock on the PC?

I don't get it.
Let me guess, you are a console gamer? Apparently many care. Sea of Thieves sold more than 2 million copies on Steam after being Windows Store and Gamepass exclusive for years, but Microsoft didn't work as hard as Epic to piss people off. Reddit even have their own fuckepic community with almost 40k members.

Yeah I am a console gamer. Used to play games on the PC but just don't care to bother anymore. What does that have to do with anything? Why would I care about a Reddit outrage mob?

Again, not seeing what Epic is doing here to "piss people off".

It's a competing store. Where is the actual harm here? If I was a PC game dev I'd be happy about it's existence and the fact it's taking a way lower cut of revenue.
 

MagiusNecros

Gilgamesh Fan Annoyance
Steam keeps all your shit in one place and offers utilities that others do not. Unless it's for a specific MMO I prefer to use 1 launcher and not 20.

Plus the timed exclusivity for PC platforms is the stupidest shit I've ever heard of. Console exclusives I get but different PC platforms(launchers) on PC? Get outta here. It was and still is asinine.
 
The really interesting thing is that most of those games they bough barely recover 40% of their costs which suggest amount of people buying anything in EGS is extremly small.
 

zeorhymer

Member
you love to see it, fuck epic games store.
Is it really a store when it doesn't have a shopping cart?

And the comparison with Netflix doesn't work. At the time of Netflix started, who was the competitor? No one. Hence they had the ability to get away with huge amount of debt, just like Amazon. Fast forward to today. EGS is not the first kid on the block. Steam has been around for a decade and some change. Instead of coming out with a fully fleshed out product to compete, they come in and buy timed exclusivity without giving customers a reason to migrate to a different client. Looking at their roadmap, you're buying into a half finished product waiting for a reason to use it.
 

Dr Bass

Gold Member
Managing different accounts (properly at least) is a pain in the ass, also some of these stores service's suck so people don't want to use them.
Ok. I mean that's fair enough, but I have accounts all over the place with so many different vendors, and I just don't think it's that hard to use or manage them. To go to the point where people are saying "fuck Epic" because they are so lazy they don't want to have two game accounts seems bizarre to me. But hey different strokes and all that. I've got a Steam account. And an Epic account. And a Nintendo, Sony and MS account too, and that's just for some silly video games. Beyond that I have dozens more.

Hasn't been a problem.

I definitely don't think Valve/Steam should have a lock on the PC space though.
 

Celcius

°Temp. member
I keep forgetting that the Epic Games Store exists. I'll be glad when they stop this money-hatting business and make their store something that people would want to use because of it's features.
 

Dr Bass

Gold Member
Steam keeps all your shit in one place and offers utilities that others do not. Unless it's for a specific MMO I prefer to use 1 launcher and not 20.

Plus the timed exclusivity for PC platforms is the stupidest shit I've ever heard of. Console exclusives I get but different PC platforms(launchers) on PC? Get outta here. It was and still is asinine.
Yes but you can literally thank Valve for that. It's the byproduct of having an all-in-one store/launcher in the first place. If everyone was releasing direct to users that wouldn't happen. And then Valve wouldn't make gobs and gobs of money just being a storefront, and devs would make more. But you would need accounts everywhere.

If being a storefront is potentially such a huge business, you should expect competition. I don't think your conclusion makes sense given that it's prefaced on PC being an open platform. You think it should remain open but only want one source for your content.

Ok ...
 

MiguelItUp

Gold Member
I don't mind EGS existing, really. I mean, yeah, I prefer Steam, but over time with all these developers and publishers wanting to do their own launcher I just got numb to it all. So it was like, "You know what, as long as it works, whatever. It's fine."

My issue with Epic is that they started EGS as a blatant competitor to Steam, but they dragged their feet to no end when it came to actually competing with Steam. For consumers, the only plus it has to offer is free games, and some good to decent ones. That's really it. No preloading, no achievements, no user profiles, etc. So many things that Steam has and does well are just completely absent and have been since its birth.

Honestly, ever since Fortnite: Battle Royale hit its strides, it feels like everything else takes the backseat. Well, except for their engine itself of course. Everything else is just... lagging.
 

MagiusNecros

Gilgamesh Fan Annoyance
Competition is good. However Epic's approach is to buy exclusivity deals for a temporary monopoly on games to give incentive for users to use their bad application they call a store. If they had features on par or better then Steam then one might consider using it. But they do not.

And by time the deal ends the games will just go on sale and you can make an acquisition for a cheaper price.
 
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junguler

Banned
So you'd rather there be a monopoly on an "open platform"?

I don't understand why Steamers are so upset with Epic Games. It's just a launcher bro.
steam is not a monopoly tho, gog is a great alternative which helps spread the no drm word around, microsoft also does it's own thing with game pass which is a huge value for many people, blizzard, ubisoft, ea and countless other do their own thing too and nobody has a problem with them.
epic could have been just another launcher and gain a huge fan base by just being a good launcher/store but no they went with scummy tactics and stole many games from pc games that otherwise would have come to steam day and date.
Is it really a store when it doesn't have a shopping cart?

And the comparison with Netflix doesn't work. At the time of Netflix started, who was the competitor? No one. Hence they had the ability to get away with huge amount of debt, just like Amazon. Fast forward to today. EGS is not the first kid on the block. Steam has been around for a decade and some change. Instead of coming out with a fully fleshed out product to compete, they come in and buy timed exclusivity without giving customers a reason to migrate to a different client. Looking at their roadmap, you're buying into a half finished product waiting for a reason to use it.
it doesn't have a shopping cart because of sheer incompetence of their software engineers, not because they didn't want one. i agree with the other part of your comment tho.
 

Guilty_AI

Member
Ok. I mean that's fair enough, but I have accounts all over the place with so many different vendors, and I just don't think it's that hard to use or manage them. To go to the point where people are saying "fuck Epic" because they are so lazy they don't want to have two game accounts seems bizarre to me. But hey different strokes and all that. I've got a Steam account. And an Epic account. And a Nintendo, Sony and MS account too, and that's just for some silly video games. Beyond that I have dozens more.

Hasn't been a problem.
I also have accounts all over the place, doesn't mean i'm fine with the idea.
Then comes around Epic saying "hey, see this game that was gonna release normally on those other platforms that you use? Now you need yet another account and app to play it!", of course people are gonna respond with "fuck you".
Thats a normal reaction, and i see it plenty of times in other places, like some X company forcing you to use their app and make an account just for simple activities like checking a catalogue. Its weirder there are people who find this reaction weird, its not like anyone is throwing molotovs on their HQ over this or anything.

I definitely don't think Valve/Steam should have a lock on the PC space though.
they don't, the very existence of EGS is proof enough of that.
 
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steam is not a monopoly tho, gog is a great alternative which helps spread the no drm word around, microsoft also does it's own thing with game pass which is a huge value for many people, blizzard, ubisoft, ea and countless other do their own thing too and nobody has a problem with them.
epic could have been just another launcher and gain a huge fan base by just being a good launcher/store but no they went with scummy tactics and stole many games from pc games that otherwise would have come to steam day and date.

Fair points. All I have on mine is a couple of the free games Epic has given out. The timed exclusive stuff is kinda shitty but I'm use to it as a mostly console gamer.
 

BennyBlanco

aka IMurRIVAL69
They are treating the PC gaming ecosystem as if it's a console one.

If you only sell software there is no need for a loss leader strategy, people will go wherever they see value. They should have spent that money creating value instead of going around moneyhatting a bunch of games thinking people would take kindly to it.

Doubt we ever would’ve got a PC version of Kingdom Hearts without their checkbook. They also offered a bag to Sony for their exclusives. Wish they would do more of that kinda stuff instead of fuckin Borderlands or Metro.
 

Gamezone

Gold Member
That's the point though.

It's an open platform, people can release whatever they want with it?

Doesn't Epic take far less money from developers to publish on their platform? This a good thing, and the very thing an open platform encourages. Stronger competition, more innovation, lower costs.

Steam should just have an outright lock on the PC?

I don't get it.


Yeah I am a console gamer. Used to play games on the PC but just don't care to bother anymore. What does that have to do with anything? Why would I care about a Reddit outrage mob?

Again, not seeing what Epic is doing here to "piss people off".

It's a competing store. Where is the actual harm here? If I was a PC game dev I'd be happy about it's existence and the fact it's taking a way lower cut of revenue.

Why is it a good thing? Games haven't become cheaper for us. Yes, developers and publishers get a bigger cut from Epic, but it doesn't help them when people aren't buying Epic's games. It's not competition. It's a bought monopoly. If they wanted competition, release the game on both store and let people choose the best store.
 
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GHG

Member
That's the point though.

It's an open platform, people can release whatever they want with it?

Doesn't Epic take far less money from developers to publish on their platform? This a good thing, and the very thing an open platform encourages. Stronger competition, more innovation, lower costs.

Steam should just have an outright lock on the PC?

I don't get it.

Correct me if I'm wrong but I get the impression that you "don't get it" because you're coming at this from the angle of a console gamer who is unfamiliar with the PC gaming landscape?

There is no lock that Steam has on the platform. They don't force developers to only release on their storefront, if that's the case then it's a choice a developer has made. Steam are so open (along with Epic's own incompetence to not have a similar function on their platform) that it got to the point where developers use the steam forums as a support page for their epic exclusive games. I've referenced one example there but the same thing has happened with a lot of games.

Epic have not innovated, they have not been competitive and they most certainly haven't ensured developers getting a larger cut has resulted in better prices for consumers.

There are several ways to compete - you can compete on price, you can compete on quality, you can compete on utility, etc - and when we look across the board Epic do not stand out in a single area. The only way their have sought to gain market share from Valve (and GOG) is by force. As a result people have rightly told them where to go.

This is a bit out of date but you get the picture:



Until all these other so called storefronts start actually competing then Steam will continue to dominate and nobody else has a right to complain.
 
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ZehDon

Member
I'm old enough to remember when Valve used Half-Life 2 to force everyone to use Steam. And it was not a good launch. It took Valve literally years to build Steam into something worth using, let alone good enough to warrant spending money with. Fast forward to today, and Steam is basically the only game in town for PC Gaming. That level of control is not good for any industry - Steam taking 30% of everyone's money is a good example of why we need competition in this space. GOG is trying, but it's built its niche in older titles.

Epic is using the insane success of Fortnight to bankroll a loss-leading approach to building their Steam competitor. USD$130m is nothing to compared to revenue Valve brings in from Steam today. It's a gamble worth taking if you can afford it. Of course, without a juggernaut like Fortnight keeping the lights on, there are few companies who could ever step up to compete with what Valve have built in Steam.

Right now, EGS is just a place to get free games and play Fortnight. But, this alone demonstrates that people aren't opposed to going elsewhere for their titles - Epic just needs to give them a reason. If Epic can't compete on price - which is what would move the majority of people - they need to compete by offering something new. Just being "not Steam" isn't going to win over anyone. And for my money, EGS haven't offered me anything that's better or more useful than what Steam does.

GOG gets my business because I can download the DRM free installers and keep them locally.
Steam gets my business because it sells me games and stays out of the way as much as possible.
Epic doesn't get my business because it doesn't offer me anything to warrant it. Epic need to answer that question if they ever hope to succeed.
 
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brian0057

Member
Wait ... you're upset that some games went to Epic instead of Steam? Who the hell cares about which launcher a game is stored in?

Is this like the PC equivalent of "console wars"?
Epic being 40% Chinese is a massive dealbreaker for me, exclusivity chicanery notwithstanding.
But EGS being an objectively inferior product compared to Steam makes their anti-consumer BS all the more apparent.
 

Sentenza

Member
Wait ... you're upset that some games went to Epic instead of Steam? Who the hell cares about which launcher a game is stored in?
"Anyone who ACTUALLY tried to use both on a regular basis" would be my guess.
The gap in quality is THAT wide. And that's without going on the "morality" side of the story, where EGS doesn't just suck but it's also poisoning the well for everyone with predatory pricing, an unsustainable economic model in an attempt to drive competitors out of the market, exclusivity as a luring siren for users and other questionable practices.
 
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catvonpee

Member
I only bought one game on EGS because the publisher said that there would be no Steam release, and sure enough there was a Steam release exactly a year later. I felt duped but Epic did give them a ton of money to help develop a better game. So I guess all platforms benefitted in way because the indie developer had a bigger budget to work with and the game ended up being great. I also bought the same game on Xbox too.

I hope EGS keeps giving away awesome free games because I have no plans to buy the Steam version of the game any time soon until it gets way cheaper or at all, so I will keep their launcher for the time being.
 
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