Epic Games pays millions to compete with other digital game storefronts

Epic Games pays millions to compete with other digital game storefronts

This story about toppling a monolith, boiled down, in 1:42 minutes.

What's the fuss?

Information was recently released that quantifies how much Epic Games (famous for Fortnite) paid for timed exclusive games and giveaways, and it's a lot. The cost of toppling a virtual monopoly.

The situation

Currently, an enormous legal battle between Apple and Epic Games is being waged that could forever change Apple's App Store policies. Epic Games, developer of Fortnite and owner of the Epic Games Store, sued Apple over their "monopolistic" in-app purchase policies and their potential violation of antitrust law.

Court documents of the ongoing trial revealed that Epic paid out $115 million to attain 6-month exclusive rights to distribute (aka sell) the popular game Borderlands 3. In addition, the store spent another $11.6 million within its first 10 months for giving away free games to further entice gamers to use their services over the competition. Talk about an investment in yourself.

Boiling it down

Selling games over the Internet is very competitive. For a time, Steam was (as still is) considered by millions as the go-to platform for purchasing PC games online. Because of this, Steam had the power to charge game developers 30% of each sale as recompense for distributing their game to patrons. With the success of Fortnite, Epic Games decided to use its mountains of cash to compete with Steam.

By charging developers a lower percentage of their game's sales as well as offering timed exclusives (such as Borderlands 3) and free games, Epic has stolen some of Steam's market share. But like many scaling startups, the Epic Games Store has not been profitable since its inception in 2018. Although Epic eventually recouped their cost for its exclusivity deal, it's likely that the Epic Games Store will need to spend millions more to become a more formidable opponent to the monolith that Steam is.

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