Epic is losing millions on Epic Games Store exclusives – and Tim Sweeney is cool with that
If you've got an Epic Games Store account, you're probably very aware of the exclusivity deals the company has been promoting over the past 28 months.
Even back in February, we heard that Epic Games plans to continue attracting game developers and publishers to its PC platform by offering them exclusive deals.
This revelation followed on from statistics the company revealed that it had grown its userbase by millions over the course of 2020, but revenue had remained consistently flat. As reported by PC Gamer over the weekend, we've learned that a lot of the company's money was sunk into ensuring exclusivity deals in 2020 – to the tune of around $444 million.
As per the report, Epic spent an eye-watering $444 million on "minimum guarantees" when it comes to exclusive games on EGS. Put simply, a "minimum guarantee" is the assurance that if a game launches on EGS but not on Steam, for example, Epic will ensure the publisher gets a certain amount of money whether or not the game sells that well. An example cited on PC Gamer notes that Epic paid $10.45 million for Control alone.
Though it may be costing the company a lot of cash upfront, Epic Games founder and CEO Tim Sweeney doesn't seem to care. In a quote tweet replying to an IGN article outlining Epic's $330 million loss when it comes to exclusivity deals, Sweeney replied:
"That’s right! And it has proven to be a fantastic success in reaching gamers with great games and a fantastic investment into growing the business!"
He shared a graphic outlining the 160 million+ Epic Games Store customers the company has attracted on PC, as well as the $700 million+ those players have spent via the storefront.
It seems for Epic, short-term losses are offset by building a loyal and robust userbase – and providing players with a viable alternative to Steam on PC, too.
Free game claiming is the only notable area where the Epic Games Store achieved massive growth in 2020, and the company is going to need to diversify its tactics in 2021 and beyond if it wants to challenge Steam for the PC gaming market, and come out on top of Apple and its antitrust lawsuit, to boot.