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The Epic Games Store is Enduring Major Losses to Deliver Free Games

Epic attempted to disrupt the status quo of digital distribution through the Epic Game Store (EGS), causing the company to lose hundreds of millions of dollars each year.

Apple court documents filed before the epic duel show that Fortnite creators lost approximately $ 181 million in EGS in 2019 and are expected to lose another $ 273 million in stores by 2020.

The document also noted that Epic promised to provide a minimum guarantee of $ 444 million in 2020 alone, and expects to lose another $ 139 million in 2021. Epic has previously disclosed that PC customers spent more than $ 700 million on EGS in 2020, of which third-party games accounted for 37%, which was the US $ 267 million.

While it’s not surprising to see epic money competing with established companies like Steam in pop-up storefronts, it’s still interesting to see how much the company spends on exclusive offers and free food sets each month.

Indeed, Epic itself has admitted that its incentives and investments for developers and publishers will result in “sunk costs,” but in its own legal documents, it says the market will be profitable in 2023. Apple has hinted that the store will not be profitable until 2027. at the earliest.

Epic said: “The Epic Games Store is not yet profitable at its current scale and development stage because it has prioritized marketing and user acquisition costs to gain market share.” “EGS’s 12% transaction fee is sufficient to pay for EGS operation. Variable costs, including payment processing, customer service, and bandwidth.”

After Apple decided to remove Fortnite from its platform after Epic violated App Store guidelines, the two companies will go to trial on May 3, which is the latest transaction between the two companies. 

Epic claims that Apple refuses to allow other companies to implement third-party payment methods, making the App Store an “unfair and anti-competitive” monopoly. Apple has argued that it competes fiercely with other stores that operate similarly, and in recent documents stated that “The Epic Games Store is not profitable and cannot be compared to the App Store.”

By Gaby Lewis

Gabby is a postgraduate in biotechnology and has an immense interest in following technology developments. Quiet by nature, he is an avid Chess player. He is responsible for handling the office staff writers and providing them with the latest updates happenings in the world of technology. [email protected]

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