Epic Is Losing Hundreds of Millions As it Battles To Gain Market Share from Steam

Epic is set to lose at least $330 million in its battle to gain market share from Steam, mainly due to it offering exclusive games and free titles on its Epic Games Store.As reported by PC Gamer, Epic’s legal fight with Apple has given us insight into how much Epic is spending to build up the Epic Games Store, including that it committed around $444 million to exclusivity deals in 2020 alone.This money was spent on “minimum guarantees” for games that are exclusive to the Epic Games Store for a year. Since these games will not appear on Steam, Epic is offering these guarantees as advances to publishers whether or not their games sell enough to cover it. For example, Epic paid 505 Games $10.45 million for Control exclusivity back in 2019.

In Epic’s end-of-year report, Epic confirmed that players spent $700 million on the Epic Games Store in 2020, but these third-party games only accounted for $265 million of that total. This reveals that Epic has yet to earn back the $444 million in advances to these third-party publishers and, even though some of these deals are surely for games in the future, Apple claims 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.

Apple’s projections, which can be seen here, hint that, when factoring in exclusives and all other expenses, the Epic Games Store may lose somewhere below $600 million in total by the end of 2021. It also suggests that the Epic Games Store will not be profitable until 2027.

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