Two Fortnite players in Paris at an event in 2022.Getty
Epic Games, the maker of Fortnite video games, announced Thursday that it has laid off about 830 workers, 16% of its workforce, due to a crisis caused by the decline in popularity of its flagship title, played by about 30 million people , was triggered per day on average. Tim Sweeney, the company’s CEO, announced the move in a statement to employees. “For a long time I was optimistic that we could make this transition without letting anyone go, but looking back I think that was unrealistic,” he said. The executive has reported that the company is getting rid of Bandcamp, an online community focused on music. The company is parting ways with this asset just a year and a half after purchasing it to expand beyond games.
Epic had been trying to avoid cuts for months. The North Carolina-based company had ordered a hiring freeze at its 40 offices around the world, which employed a total of 2,300 people to date. He had also reduced the budget for events and marketing expenses to a minimum. This was not enough to achieve “financial sustainability”. The board concluded that cuts were the only way to stabilize the numbers.
Of the total number of those fired, about 250 worked for Bandcamp and SuperAwesome, a parental control and advertising platform that Epic acquired in 2020. Bandcamp, which boasts of giving 80% of its income to artists and record labels, a far better figure than other music communities, is becoming part of Songtrader, a company based in Santa Monica, California.
Epic’s chief executive has made it clear that the cuts will not affect the video game maker’s core business. Two-thirds of the employees leaving Epic were not involved in programming or development tasks. Fortnite is by far the company’s biggest success. It has about 230 million monthly players, although the number of users has fallen by 4% in recent months.
Chinese tech giant Tencent owns 40% of Epic, which was valued at $32 billion in 2022. Like several entertainment companies, the workforce at Epic, maker of Del Mar, Sparks and Juno, grew to nearly 5,500 workers during the pandemic years. The cuts will not impact upcoming announced releases, including collaborations with Lego.
Sweeney has said those affected by the cuts will leave the company with six months’ salary and health insurance. Former employees can also exercise their share packages from 2024 and until mid-2025. “Epic’s future is bright,” said the CEO, who ruled out further layoffs in the immediate future.
Fortnite is an online fighting game that allows you to connect and build communities with users from all over the world. The battle royal model, in which a single user wins the game by eliminating the others, became so successful that the company expanded into a metaverse. This one focused on content creators. Epic made adjustments to give more weight to user-generated content that streams hours of games on Twitch, increasing revenue from sales of accessories and avatar customization items. Sweeney sees this “creator ecosystem” as a success and great achievement, but acknowledges that it brought structural changes to the company’s finances. These effects are clearly felt today.
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