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

Sentenza

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The title of this thread is incorrect, by the way. That EGS lost little more than half a billion in its first two years of operation (and not just 130 millions) was already known for months.
Losses were even expected, to an extent, and in some way "part of the plan" from the start.

What was actually revealed with this this stuff is that the store is performing far worse even than Epic's most conservative predictions.
Something like "Oh, we paid X for this and we expect to make back at least 50% of it in a year", except in several cases it went far worse.

They are also struggling massively to turn their large user base of leeches freebie hunters into paying customers.
 
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Dr Bass

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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This is a bit out of date but you get the picture: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.
You're totally right, I am a console gamer and that's why I don't get it. I was expressly coming at it from a "isn't more choice/competition good?" angle, but it seems like there is more to it that I clearly am not aware of.

My opinion on the dev cut wasn't so that consumers could get lower prices necessarily, but so that devs could make more money vs Valve taking a big cut. I still think that could be a really beneficial thing for the industry (don't need to sell as many copies to support dev efforts!). I have thought Steam is just sort of the de facto store in the sense that if you aren't on it, you're not gonna sell your stuff. Certainly not that you're forced.

But it looks like there is a whole lot I don't understand about the current PC game situation so just never mind me at this point. :messenger_tongue:
 

FStubbs

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Will it ever turn profitable?I have my doubts.
Profit isn't really the goal of EGS right now. It's to destroy Steam. Then they'll worry about profits.

And, if they win the case with Apple, they can use EGS to attack the consoles next.
 
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Bonfires Down

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I've gotten 200 free games so I'll happily accept them if the only trade off is a few exclusives that I care little about, and I would like to see Epic succeed. But I'm not very impressed by their results so far and I suspect they could have used all that exclusives money in more effective ways. Why don't they have important new games like RE Village, Mass Effect LE or New World on their store? Getting parity with Steam on new releases should be their first priority. If people only go to Epic for exclusives and go to Steam for everything else then all they've done is to waste a ton of money.
 

SlimySnake

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$37 million? Thats it? that's like 600k copies at full price. thats what they expected Metro to sell? Thats nothing for a big PC release like Metro.

And it only sold $22 million worth of copies so like 400k? Lifetime? Yeesh. Returnal is looking right about now.
 

Guilty_AI

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It's been a while since EGS launched. Why did it piss everybody off again? Was it the buying up exclusives thing?
When it just launched there was some criticism, similar to what happened with origin, but overall people didn't really mind that much.

Stuff exploded because of the Metro Exodus deal. You could already pre-order the game on steam, and then like a few weeks before launch it got pulled out because of a deal with Epic. People got pissed because this event, along with some more deals that came after, was creating the idea epic was basically paying off every popular upcoming release to be Epic exclusive. In fact, it even got out they were actively using steam wishlist data to strike deals for the most wished games on steam.

Basically created fears of Epic buying out their way into the PC market to create a monopoly ala Amazon. These days i think they're more interested in getting F2P games on their store.
 
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Fbh

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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?

The article is about the exclusivity deals.
When Exodus launched it wasn't being given for free, you still had to buy it. But it was exclusive to the epic games store on PC.

Epic expected people would then go to their store and buy it. But as it turns out, it seems like most PC gamers just opted to wait until the exclusive deal expired, to then buy it on Steam.
 

lh032

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Acquisition then. Next Wednesday.
 

KyoZz

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You're totally right, I am a console gamer and that's why I don't get it. I was expressly coming at it from a "isn't more choice/competition good?" angle, but it seems like there is more to it that I clearly am not aware of.

My opinion on the dev cut wasn't so that consumers could get lower prices necessarily, but so that devs could make more money vs Valve taking a big cut. I still think that could be a really beneficial thing for the industry (don't need to sell as many copies to support dev efforts!). I have thought Steam is just sort of the de facto store in the sense that if you aren't on it, you're not gonna sell your stuff. Certainly not that you're forced.

But it looks like there is a whole lot I don't understand about the current PC game situation so just never mind me at this point. :messenger_tongue:
In addition to all the arguments made, I also add that Epic is buying exclusives instead of making their own games. For example I'm using Uplay because I want to play Anno 1800. Same goes for Origin to play Battlefield.
But Epic is not like that, they just throw (Fortnite) money at big names to moneyhat awaited games, but in the same time they cancel their other projects for Fortnite... I am still really upset by the cancelation of the next Unreal Tournament and the devs are only working on Fortnite now, what a sad world.
 

Stuart360

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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.
Yes we can tell.
 

LazyParrot

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When it just launched there was some criticism, similar to what happened with origin, but overall people didn't really mind that much.

Stuff exploded because of the Metro Exodus deal.
Actually, I think they were pulling that bullshit right from the start. One of their launch exclusives was Ashen, a game that had been advertised as a Steam and Game Pass release. The exclusivity announcements came just a few days before the game was set to launch on these platforms.
 
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Bernd Lauert

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Pocket change. Also they got millions of new people to register, so that actually sounds like a good deal?
 

Dr Bass

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Yes we can tell.
An incredibly stupid response. You can always try contributing to the dialogue, as opposed to whatever lame-ass "gotcha" you think this was supposed to be (and trust me, it isn't, I am openly admitting to wanting to understand the situation better).

Pocket change. Also they got millions of new people to register, so that actually sounds like a good deal?
Yeah I would think this is how they feel as well. I don't think people understand what a lot of tech companies are trying to do, or the value of acquiring customers. WhatsApp was just another texting platform but it was acquired for 19 billion or so because it had users.
 
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Stuart360

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An incredibly stupid response. You can always try contributing to the dialogue, as opposed to whatever lame-ass "gotcha" you think this was supposed to be (and trust me, it isn't, I am openly admitting to wanting to understand the situation better).


Yeah I would think this is how they feel as well. I don't think people understand what a lot of tech companies are trying to do, or the value of acquiring customers. WhatsApp was just another texting platform but it was acquired for 19 billion or so because it had users.
People have al;ready told you numerous reasons, and i have said my piece on the whole Epic shite plenty of times. I'm not repeating myself on this subject for the 50th time.
As you said, you're a console gamer so you just dont get it.
 
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Dr Bass

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People have al;ready told you numerous reasons, and i have said my piece on the whole Epic shite plenty of times. I'm not repeating myself on this subject for the 50th time.
As you said, you're a console gamer so you just dont get it.
You should read the whole thread before responding then, as in this very thread I saw good meaningful responses to what I wrote. Also, I used to PC game, and I've actually worked on PC games, but these days I don't because I just don't have the time to invest in that kind of thing, nor do I want to.

But your response was stupid, and even this one insinuates that somehow it's not possible to "get it" because I'm a "console player." Dumb. I know exactly why you're responding that way though, so no biggie. But, in the future, something a little more thoughtful would be appreciated.
 

Hydelol

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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"?
It would be no problem if the games would be released on both platforms. Why can't I, as a CUSTOMER, CHOOSE where I buy my games from? It's not Steam's or Epic's machine I am playing it on. I am playing it on MY computer with a shitty Windows OS. Neither of them produces the games I want to buy, so why is it good, that they can decide where I am able to buy my games?
 
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Stuart360

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You should read the whole thread before responding then, as in this very thread I saw good meaningful responses to what I wrote. Also, I used to PC game, and I've actually worked on PC games, but these days I don't because I just don't have the time to invest in that kind of thing, nor do I want to.

But your response was stupid, and even this one insinuates that somehow it's not possible to "get it" because I'm a "console player." Dumb. I know exactly why you're responding that way though, so no biggie. But, in the future, something a little more thoughtful would be appreciated.
Well i didbnt mean it in that way as in console gamer = dumb, i meant as a console gamer you are used to the kind of crap Epic has pulled. On PC we are not used to it as no one company 'owns' PC, like Microsoft and Sony own console platforms.
PC is about freedom of choice, not just for PC gamers, but developers too. Money hatting games to try and force PC gamers onto a platform is just something that doesnt happen on PC.
And for all the 'Steam is a manopoly', Steam put zero restructions on games, and on devs and where and how they can release games. I mean for christ sake Steam even lets you use keys from dodgy sittes!. There is nothing restrictive with Steam, quite the opposite really.
Plus there is the whole thing with Steam itself which is a community, not jusst a simple launcher.

Thats the best yuo will get from me. There are other problems with Epic i have, but i'm honestly sick to death of them and explaining this. It was the tiresome 'its just another launcher, i dont get it?' stuff that triggered me as neeeding another launcher is very down on the list of reason why PC gamers hate Epic.
 

Sean Mirrsen

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Epic expected people would then go to their store and buy it. But as it turns out, it seems like most PC gamers just opted to wait until the exclusive deal expired, to then buy it on Steam.
Or indeed pirate it. Just anecdotally, I've seen something like ten times the amount of activity for EGS exclusives, proportional to regular high-profile releases, on the one torrent tracker I keep tabs on. Epic would do well to remember why Steam went in the direction it did, all the way back then.
 
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Dr Bass

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It would be no problem if the games would be released on both platforms. Why can't I, as a CUSTOMER, CHOOSE where I buy my games from? It's not Steam's or Epic's machine I am playing it on. I am playing it on MY computer with a shitty Windows OS. Neither of them produces the games I want to buy, so why is is good, that they can decide where I am able to buy my games?
So are you against both Valve and Epic in this case? That's the thing to me, it seems like it is still the SAME platform. It's all PC. This is the same argument that was made when MS bought Bethesda, and Sony-only people who cared and were upset were basically pointed at and laughed at by the Xbox-only people, and told to suck it up. Some of the very people complaining about Epic in this thread, were extremely pleased with that move. Go figure.

I'm not trying to play some disingenuous devil's advocate, and I get not liking Tencent, but someone earlier in the thread said it wouldn't be a problem if Epic didn't buy games also headed to Steam. But to me it's all PC, and I have both Steam and Epic accounts anyway (they both run on Mac! And I've worked on some Unreal Engine stuff).

BTW you're making the argument Epic is making against Apple in their court case, that customers should have a right to choose which stores they want to offer their patronage too, and not be locked into a single one. I didn't follow the Metro deal that is being referenced here either so, I should look into what went down.

I'm just a bit surprised at the extremely strong feelings that seem to exist around this. If GOG bought out a huge exclusive would that not be ok? Why is it apparently ok for Steam to have exclusives?

I really didn't even mean to get into this, it's not even an issue I'm that concerned with (hence the earlier "I don't get it") but I find the crazy strong responses kinda fascinating.
 

Stuart360

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So are you against both Valve and Epic in this case? That's the thing to me, it seems like it is still the SAME platform. It's all PC. This is the same argument that was made when MS bought Bethesda, and Sony-only people who cared and were upset were basically pointed at and laughed at by the Xbox-only people, and told to suck it up. Some of the very people complaining about Epic in this thread, were extremely pleased with that move. Go figure.

I'm not trying to play some disingenuous devil's advocate, and I get not liking Tencent, but someone earlier in the thread said it wouldn't be a problem if Epic didn't buy games also headed to Steam. But to me it's all PC, and I have both Steam and Epic accounts anyway (they both run on Mac! And I've worked on some Unreal Engine stuff).

BTW you're making the argument Epic is making against Apple in their court case, that customers should have a right to choose which stores they want to offer their patronage too, and not be locked into a single one. I didn't follow the Metro deal that is being referenced here either so, I should look into what went down.

I'm just a bit surprised at the extremely strong feelings that seem to exist around this. If GOG bought out a huge exclusive would that not be ok? Why is it apparently ok for Steam to have exclusives?

I really didn't even mean to get into this, it's not even an issue I'm that concerned with (hence the earlier "I don't get it") but I find the crazy strong responses kinda fascinating.
Because they dont, not paid exclusives anyway.
If some devs only want to release their game on Steam, thats their choice, and nothing to do with any kind of stipulation by Steam ,as they never have done that.
Thats the point.
 

VN1X

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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"?
Oh my god not this again.

Talk to me when EGS provides half the features Steam currently offers. I've been in the 'Steam eco system' for over 16 years now so of course I'm not going to build a library with some other storefront/client lmao. What is so hard to understand about that?

I would love some actual Steam competition but other launchers are all just that... launchers, that only provide a financial gain for developers and no benefits for the user.
 
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Sean Mirrsen

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I'm just a bit surprised at the extremely strong feelings that seem to exist around this. If GOG bought out a huge exclusive would that not be ok? Why is it apparently ok for Steam to have exclusives?
Exclusives were never okay on PC. More than that, they were hardly ever practiced, with maybe a couple examples in the whole history since the start of digital distribution on PC. And one could argue even before that.

What is okay on PC, is self-publishing. It everyone's common ground, you can take your game and sell it yourself, wherever and however you can. That's what all of the publisher-owned storefronts, like UPlay, Origin, Battle.net, the Rockstar and Bethsoft launchers, are. Their 'exclusives' are just those companies' games. Even on GOG is still applies, as the vast majority of titles 'exclusive' to GOG, are games that CDP or CDPR actually made, or made possible/published, themselves.

I can understand your confusion in regards to Steam, as many games are indeed available only on Steam. But you might want to consider that the vast majority of developers just don't have the resources to self-publish. They can't, or don't have the skills or money, to have their own site to sell their game and market it. To these people, Steam gives everything they need, for just $100 and next to no review process. Hosting, marketing and visibility tools, a massive customer base to appeal to, all kinds of additional developer benefits. Compared to GOG, where you have to pass a heavy manual review process (since it's a curated store) and risk being denied, or to Itch that has a very limited audience and can't sell to the majority of the developing world (since it only accepts like two payment methods, one of which is PayPal), Steam is a natural first choice. And since their resources are limited, and the benefits of turning to other storefronts are slim (unless people really ask for it), many developers choose to remain on Steam alone.

That's the key part. Choose. Steam does not prevent them from going elsewhere. Steam does not prevent them from selling freely generated keys on other sites, for 100% of what profit they can muster. Developers and publishers are free to choose to use everything that Steam provides, or nothing of it. Same with Itch, same with GOG once the game has passed curation. None of these stores impugn on the concept of choice, developers and publishers go to these stores willingly.

With EGS's market approach, there is no 'choice'. By the power of money, EGS is exerting control over both the developers'/publishers', and the customers' ability to choose where they can put, or buy their games. This, is effectively anathema to PC gaming as an open, free platform. It's the marketing approach of console platform holders, and it brings the same console-war mindset with it - to PC, where nobody sane wants to have it.
 

nemiroff

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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.

No one is asking for monopoly, and it's not a practical problem that Sweeney is an obnoxious slimy fuck stuck inside Sony's butt. The problem is that Epic is forcing console walled garden exclusivity bullshit where it doesn't belong. It has never happened on this scale before on the PC and it sucks. If the same games were available on both Steam and EGS (and other places) people themselves could choose where to buy from and no one would have a problem with Epic per se, simple as that.

Edit: I forgot to mention another important thing; The Epic launcher and store is relatively shitty and doesn't have a fraction of the functionality of Steam. Buying exclusivity means Epic don't have to bother that much making EGS a better product because people have no choice other than to use their launcher anyway.
 
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rnlval

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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.)

Epic is burning through investor's money for market share.


I don't trust Epic and its CEO Tim Sweeney.

Epic being 40% Chinese Tencent is a factor.

I usually prioritize Steam (1st), GOG (2nd) MS Store (3rd), EA Play (4th, Origin replaced by EA Play), UPlay (5th) with Epic being last.
 
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moniker

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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.

I'm pretty sure GOG's cut is 30% as well.
 

Herr Edgy

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So are you against both Valve and Epic in this case? That's the thing to me, it seems like it is still the SAME platform. It's all PC. This is the same argument that was made when MS bought Bethesda, and Sony-only people who cared and were upset were basically pointed at and laughed at by the Xbox-only people, and told to suck it up. Some of the very people complaining about Epic in this thread, were extremely pleased with that move. Go figure.

I'm not trying to play some disingenuous devil's advocate, and I get not liking Tencent, but someone earlier in the thread said it wouldn't be a problem if Epic didn't buy games also headed to Steam. But to me it's all PC, and I have both Steam and Epic accounts anyway (they both run on Mac! And I've worked on some Unreal Engine stuff).

BTW you're making the argument Epic is making against Apple in their court case, that customers should have a right to choose which stores they want to offer their patronage too, and not be locked into a single one. I didn't follow the Metro deal that is being referenced here either so, I should look into what went down.

I'm just a bit surprised at the extremely strong feelings that seem to exist around this. If GOG bought out a huge exclusive would that not be ok? Why is it apparently ok for Steam to have exclusives?

I really didn't even mean to get into this, it's not even an issue I'm that concerned with (hence the earlier "I don't get it") but I find the crazy strong responses kinda fascinating.
Does it really come as a surprise that people participating in console warring when they are grown adults could harbor strong irrational feelings towards a storefront?
 
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Guilty_AI

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Actually, I think they were pulling that bullshit right from the start. One of their launch exclusives was Ashen, a game that had been advertised as a Steam and Game Pass release. The exclusivity announcements came just a few days before the game was set to launch on these platforms.
Ashen was nowhere near as popular release than Metro Exodus though. And the store had just appeared so people were giving them some leeway.
But i remember there was indeed already criticism at the time, its just that it grew exponentially after the Metro Exodus ordeal.
 
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DGrayson

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Uhh ... why?

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

Yes we know. Personally I am all for competition on digital storefronts such as, better features, cooler social integration, better streaming, better chat, better multiplayer (simulated local coop for example) etc etc etc.

I can go on and on.

Free games and buying exclusives does nothing for me.

Make a better product is what I as a consumer demand.
 

KungFucius

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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"?
It's much worse than that. Console warriors ultimately can't afford or don't want to buy the other 500 dollar box so they dig in on their side and act like morons. Epic store whiners can't get over using a different free app on their PC. It's extremely petty. I can't imagine what other shit they complain about in life. They probably throw a fit if someone puts the toilet paper roll in the "wrong" way.
 

Sean Mirrsen

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It's much worse than that. Console warriors ultimately can't afford or don't want to buy the other 500 dollar box so they dig in on their side and act like morons. Epic store whiners can't get over using a different free app on their PC. It's extremely petty. I can't imagine what other shit they complain about in life. They probably throw a fit if someone puts the toilet paper roll in the "wrong" way.
They don't care about the stupid app. They hate the business approach that powers it and the company behind it. Whereas the other side is doing a great job of cosplaying medieval peasants, who don't care about the shit in the streets or the thugs ransacking the village people, so long as the baron regularly tosses them some bread and coin from his stone-walled mansion's balcony.
 

Sean Mirrsen

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The publishers make the exclusivity deals with Epic. Yet fuck epic? lol. Cope.
Imagine you are a typical publisher, what exists to sell games and make money for its shareholders.

Imagine some other company offering you a huge chunk of money, promising even more money off sales, and no reduction to sales total, with one tiny caveat that you don't care about.

Taking into account the existence of shareholders and fiduciary duty, how does a CEO of such a publisher, or any of its management, refuse such a deal while also keeping their positions within the company?