Epic Games announces a 16% reduction in its workforce and a separation from Bandcamp and SuperAwesome. The game Fortnite Battle Royale is no longer bringing in as much as hoped.
Fortnite // Source: Ali A on YouTube
The war with Apple and Google clearly has its price. The successful publisher of Fortnite Battle Royale, Rocket League and Fall Guys, Epic Games, is in crisis. The company has just announced a 16% reduction in workforce, amounting to 870 layoffs. That’s not all, it is also separating from the company Bandcamp, which was acquired in 2022. This online music platform, well-known among artists, hosts thousands of original soundtracks for independent games. The SuperAwesome company is also largely separated from Epic Games.
“We spent more than we earned”
In his press release, President and Founder of Epic Games Tim Sweeney explains the reasons for this crisis.
For some time now, we’ve been spending far more money than we make, investing in Epic’s next evolution, and evolving Fortnite into a metaverse-inspired developer ecosystem. I’ve long been optimistic that we could make this transition without layoffs, but looking back I realize that wasn’t realistic.
More specifically, the question of Fortnite’s growth and its ability to attract content creators would pose a problem.
Although Fortnite is starting to grow again, that growth is driven primarily by content from creators with a significant share of revenue, and it is a lower margin business than when Fortnite Battle Royale launched and with funding our Expansion began. The success of the Creator ecosystem is a major achievement, but it brings with it a major structural change in our economy.
Fortnite is increasing its prices
A day before the announcement of this wave of layoffs, Epic Games adjusted the prices of microtransactions in most countries where Fortnite is present. In Europe, the price for 1000 V-Bucks increases from 7.99 euros to 8.99 euros. Other options such as the Battle Pass and other V-Bucks packages are also increasing in the same trend.
It seems clear that Fortnite Battle Royale is no longer generating as much money as it did during the pandemic. The game has no longer been offered natively on the iPhone since 2020. You must use a cloud gaming solution to play the game on Apple. On Android, the game is missing from the Google Play Store, but it is possible to install it via the Epic Games website. The publisher knowingly violated the terms and conditions of the Apple App Store in order to demonstrate its limitations, which earned it exclusion from the platform.
There is no doubt that these obstacles have slowed down the company’s plans. Not to mention the costs invested in Tim Sweeney’s legal battle against Apple, which the employees did not necessarily demand.
Tim Sweeney keeps smiling
In his press release, Tim Sweeney wants to reassure readers, and no doubt investors, that Epic Games is 40% owned by Chinese giant Tencent Games. He is therefore optimistic.
Epic’s future prospects are good. We offer exceptional gaming experiences across multiple platforms. We’ve built the best engine in the world and are hosting Unreal Fest next week to bring the community together and highlight the things they’re building with Unreal Engine and UEFN. Creators make a living building for the Fortnite ecosystem, with the time they spend in third-party games now exceeding the time they spend in first-party games.
Solid future prospects that will take place with a team reduced by 16%.
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