Is Epic Games in a Crisis? Will Fortnite shutdown soon? In my opinion the answer to
the first question is “Yes” and the answer to the second question is “No”, at
least not any time soon and not even for a long time, if Epic starts to
acknowledge their mistakes, which, on the other hand, seems somewhat doubtful.
In 2023 Epic
fired over 800 employees to save costs and now in 2026 they have let go of
another 1000 Fortnite developers. Additionally, they have increased the prices
for their Vbucks and announced the shutdown of a couple of Fortnite Gamemodes.
To understand the significance of this, it is
important to highlight that Fortnite is currently the only thing that keeps
Epic Games alive. Epic has made it their mission to rival Steam, which so far
is a fruitless effort. I understand the desire to want to become a big player,
but you can’t force it. The Epic Game Store is the second-biggest launcher for PC Games. There is no doubt about this,
but the question remains: At what cost?
Epic offers an apparently attractive deal for
developers by taking a smaller commission for publishing games. Steam or the
Playstation Store, for example, usually take around 30% commission of games published on their platform, while Epic only
takes around 12%.
The problem, however, is that the Epic Game Store is
not popular among players. On the contrary, the Epic Games Store probably has
the most negative reception among
all Launchers. A lot of that is Epic’s fault, like the shady spying on their
own players scheme or their questionable business ethics, for which they
already got sued and lost. I would therefore argue that most developers would
rather allow Steam and Playstation to take bigger cuts on platforms, they can
actually sell a lot of copies on. A smaller part of a large cake is better than
a large part of a tiny pie.
And let’s also not forget that while Epic might take a
smaller commission, they are the safe haven of Microtransactions and NFT games.
All the NFT Games, which are not
allowed on most other platforms and stores, are more than welcome in the Epic
Games Store, which is openly pursuing them.
Whenever Epic gets involved in a game, they also get
spiked up with Microtransactions.
You just have to remember how tame Fall Guys and Rocket League, for example, were,
before Epic got their greedy hands on them. It’s a difference like day and
night. Just ask some of their players.
Epic tried and still tries to force themself on the
map by regularly paying for time-limited
exclusivity of games for a year or two before they will also launch on
Steam or, in some cases, even permanent exclusivity for some smaller studios.
Epic invests a lot in this and it is simply not paying off. Whether the
negative perception is deserved or not, but they can’t seem to shake it off and
they spend way more money on those deals than they seem to get out of it. Most
players just either wait it out or buy the games on console instead.
Epic is also giving away free games to its users every single week. As a consumer I find
that awesome. Over the years I have collected around 400 games on Epic, many of
them either AAA or very promising Indie titles and I haven’t ever spent a cent
on the Epic Games Store. But you also kind of see the problem. These games are
great for free-riders like me, but it doesn’t convince anybody to actually
start spending money on this store now. And giving away games for free isn’t
cheap for Epic. They have to spend a lot of money to do so, which simply isn’t
profitable.
You can start to see how all of this combines. The Epic Game Store has never been
profitable or sustainable. They make a big loss with it every year in the hope
of one day magically turning everything around. It might be understandable that
they tried it in the beginning of the big Fortnite Hype between 2017 and 2021,
but after that point most companies would have come to the conclusion that it
simply didn’t work and downsized their store to a more healthy size, similar to
EA or Ubisoft (not that their stores would be role models by any means). It
nearly seems like arrogance that Epic refuses to accept this reality.
But it isn’t just the Epic Game Store. Most other games from Epic are also not big
money-printing machines. Rocket League and Fall Guys are probably some of their
most successful assets besides Fortnite and both games have their peak times
behind them and get less support by Epic nowadays. Both games still generate
income, but it isn’t massive. Rumbleverse might have been a good game, but it
went up in flames and their famous Unreal Tournament franchise they have for
unknown reasons completely abandoned. Most other games they were involved with
were big commercial failures. Fortnite is really keeping the lights on at Epic.
Result:
Epic Games is, in my opinion, a house of cards with only one solid pillar, which is Fortnite. If
this pillar gets even in a small crisis, then the whole building is starting to
shake. This is a huge problem and it’s baffling how Epic hasn’t been able to
change this. You usually have two options. You either invest a lot and try to
diversify, which is obviously what Epic tried to do. If that, however, fails,
you have to downsize to a healthy level to guarantee your long-term survival.
Epic hasn’t done that yet and I am not convinced they really will. They just
fired a lot of people, made a few marketing statements and will probably call
it a day now.
You just have to compare Epic to Sony or Valve to see
how fragile the situation of Epic
Games is. If Helldivers 2 or the next Horizon or Last of Us flops, it’s not
great for Sony, but they don’t have to worry about the future of the company
whatsoever and the same goes for Valve. If Fortnite would lose 50% of their
players overnight, then the whole of Epic Games would get in a life-threatening
situation. It’s like a company, where you see all the executives wearing the
most expensive suits and dining in the best restaurants in town and you think
they probably have a very successful business, but they can barely afford to
pay their monthly interest rate.
I am far from being a business consultant, but I don’t understand why Epic isn’t stopping
these unsuccessful exclusivity deals, which cost more than they gain, remove or
at least reduce the amount of free games, which are just the gaming equivalent
of sportswashing and equally unsuccessful. And Epic should also stop paying
money for Fortnite creative maps. Since the launch of UEFN, they have spent around 900 million dollars on those maps. This
should be 0, since Fortnite Creative will a) never be the next Roblox and b)
doesn’t need any money to do what it’s doing right now anyway.
If Epic would do all of that (which I would call reconnecting with reality) than the
company could have a bright long-term future. I, however, think their hubris will
prevent them from doing so. They will continue their failed dream of becoming
the biggest and most popular launcher for PC Games and the next real crisis at
Fortnite will get close to knocking them over and they will need a bailout from a scammy company like the
Chinese giant Tencent and nobody can really want that.