A recent court filing has revealed that Epic Games lost about $454 million in 2019 and 2020 on the Epic Games Store (EGS), meaning EGS hasn’t been profitable for the last two years. EGS lost $181 million & $273 million in 2019 and 2020, respectively.
“Apparently Epic has admitted this trend will continue in the immediate future, and Epic projects to lose around $139m on the Epic Games Store in 2021,” writes Wesley Yin-Poole of EuroGamer. “These are all ‘unrecouped costs’ resulting from Epic’s attempt to grow the Epic Games Store. That includes at least $330m in unrecouped costs from minimum guarantees alone. Ouch. That’s a lot of games that missed their minimum sales target.”
The Epic Games Store went live in December of 2018. EGS currently has more than 160 million registered users and more than 56 million monthly active users.
The Profit‘s Take:
All this data surfaced because of the epic Apple lawsuit. When they do all the calculations, the Epic Games Store is gonna cost Epic $600 million in losses by the end of this year. According to Apple, the epic game store won’t be profitable until 2027. Tim Sweeney says, even with our 12% revenue cut, we’re gonna start turning a profit in 2023. There’s this big gap between what Apple is saying this is costing, and what epic is saying this is costing. I’m most amazed any investor would write a check here at a 50% valuation increase over the last round without having sorted all this out. When you have so much uncertainty swirling around this lawsuit, and potentially up to $600 million in losses by the end of the year, if I’m an investor who just put a billion dollars in, I’m thinking “geez, my billion dollars is probably not going to last.”