The end of the lawsuit between technology giant Apple and Epic Games is still in sight. With the new information comes just Apple, which helps documents wants to substantiate its claim that the Epic Games Store is currently profitable and will take several years, if at all, to be profitable.
Court documents released this week revealed that Epic provided minimum guarantees to publishers of $ 444 million for 2020 alone. The minimum guarantee is paid to publishers or developers regardless of whether the game itself earns enough money to refund the deposit. This is undoubtedly a lot of money that Epic is willing to invest in the fight not only against Steam.
Buying exclusivity, as Epic boss Tim Sweeney himself said last June, says he is the only effective strategy. Nevertheless, business cannot benefit from these exclusivities. According to new documents, Apple reveals Epic’s losses at the Epic Games Store in 2019 of around $ 181 million, and in 2020 the store is expected to lose around $ 273 million. Epic admits that this trend will continue in the near future, and the company plans to lose approximately $ 139 million in the Epic Games Store in 2021.
Apple further states in the documents that, at best, Epic does not expect the Epic Games Store to have a cumulative gross profit before 2027. “As a result, Epic has funded and must continue to fund the Epic Games Store through funding and capital raised from other parts of its business that have been incredibly profitable for several years.” it is stated in the documents. The other part of the business that has been incredibly profitable for several years is undoubtedly thought of by Fortnite.
Epic, of course, commented on these points. In its response, the company stated their expectation that the Epic Games Store would be profitable by 2023, four years before Apple reported it. Epic’s founder and CEO, Tim Sweeney, recalled the high EGS figures overall and said that this is how every investment in the future simply works, whether you are building a factory, a store or a game. Netflix, for example, operates in a similar way, investing more in new content than it currently earns as part of future growth.
Apple spins this as “losing money”, but spending now in order to build a great, profitable business in the future is exactly what investment is! It’s equally true whether you’re building a factory, a store, or a game.
— Tim Sweeney (@TimSweeneyEpic) April 10, 2021
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