I'm still bitter that they unilaterally killed the entire Unreal Tournament franchise, pulled all games from all stores and turned off the master servers with no explanation.
I could understand maybe turning off the master servers to cut costs, but lets be honest, they could have hosted the entire franchise master servers on a raspberry pi. There was no need to pull the games from stores. They all but guaranteed there will never be any new players and the existing players all resort to piracy now when needing a new install.
Yeah, quite the opposite, I see this in the official announcement: "We aren't cutting any core businesses, and are continuing to invest in games with Fortnite first-party development, the Fortnite creator ecosystem and economy, Rocket League and Fall Guys; and services for developers including Unreal Engine for games and enterprise, Epic Games Store, Epic Games Publishing, Epic Online Services, Kids Web Services, MetaHuman, Twin Motion, Quixel Mega Scans, Capturing Reality, ArtStation, Sketchfab and Fab."
Layoffs always suck, and the things and people Epic are getting rid of will hurt everyone, but credit is due for allocating the budget to take care of everyone, including accelerating the vesting schedule.
The communication around the layoffs, the "why" and "what now" make sense. If you have to pivot, learn from this communique.
I saw this comment and opened it expecting it to maybe just be 2 months of pay due to the Warn act. So was prepared to point out that they are not doing it freely.
But honestly yeah, at 6 months of pay and benefits. It still sucks and gettin laid off can affect you emotionally with the "why me" question. But 6 months is enough to fend off the panic that could set in.
Layoffs suck and unfortunately are just a reality, sometimes they really can't be avoided. They deserve some credit for how they are handling it.
While I'm not familiar with Epic, large private companies I've been involved with in the past often have an internal market that has an independent auditor set the stock price and the company provides liquidity by authorizing a pool of money for buying and selling shares.
> While Fortnite is starting to grow again, the growth is driven primarily by creator content with significant revenue sharing, and this is a lower margin business than we had when Fortnite Battle Royale took off and began funding our expansion. Success with the creator ecosystem is a great achievement, but it means a major structural change to our economics.
...
> We’ve built the best engine in the world, and will be hosting Unreal Fest next week to bring the community together and spotlight the things they are building with Unreal Engine and UEFN. Creators are making a living building for the Fortnite ecosystem, with time in third-party games now exceeding first-party.
...
> We've been taking steps to reduce our legal expenses, but are continuing the fight against Apple and Google distribution monopolies and taxes, so the metaverse can thrive and bring opportunity to Epic and all other developers.
They are absolutely positioning Fortnite as a higher fidelity Roblox, with a view to becoming a whole gaming platform. It is a curious strategy to attack the legal foundations of one App Store while you attempt to build your own.
One of the bits of noise bouncing around the games industry is the extent to which UEFN is being seen as a sort of proving ground for teams and ideas. How viable it actually is as a business has yet to be seen.
I don’t think it’s that curious. Epic’s argument is that the App Store is fully closed and uses that forced exclusivity to take an unfair share of things, while also controlling things like discoverability.
Epic’s platforms are 60% cheaper than Valve and Apple, allows for in app purchases that don’t leverage epic and thus give them no money, and from the sound of it is much more creator friendly than something like the ridiculous economics of Roblox (not familiar with it though)
It’s a great business model. Let someone else take the risks and sell the hardware, then use regulators to open the complementary goods to be undercut.
Assuming they eventually win against Apple, they will make a fortune when they take on the console market with the precedent.
The ideal state is healthy competition where consumers can choose to interact with the platform they want, and platforms need to reduce their cuts of revenue to be competitive.
Platforms leveraging their market position to keep shares of revenue at 30% is insane.
How is it insane? I shipped an app and made some decent money. How much did Apple / Google do for me? Well, without the app stores and hardware sales I estimate I would have made $0.
There is value in building and maintaining an ecosystem. I get they nobody likes paying a middleman, but there is value there.
Because the ecosystem value cuts both ways. The thriving ecosystem is what causes people to buy so many apple products in the first place, and keep coming back to them. Apple's sales benefit hugely from the app market. App makers aren't simply leaches, which is basically what your (and many others') argument amounts to.
It is insane because you are willfully accepting an environment where a company forbids competition against itself using its market position in a different market (hardware).
It’s great that they provide this service to you. But if they had competition it would be way cheaper and better
Sure, but by that logic we should do away with patents and copyrights. As a consumer, once someone has invested the energy and money to produce something, it’s better for me if someone else can clone it and sell it cheaper.
But that’s not good long term. If there’s no reward for success, there’s no incentive to risk failure.
This statement is stupidly unqualified. Yes, we should reward investments and inventions. No, that broad sentiment does not suffice to support Apple getting to tax all software at 30% by virtues of their hardware market control And forbidding competition against themselves.
One thing I worry about is Bandcamp. I was worried when Epic bought them, and I'm even more worried now as they were divested to a company I've never heard of...
Bandcamp has for so long been a boon to independent music and musicians, and allowed them to sell their work (and whatever else) on their own terms, more or less, in a way that I thought was radical and fair compared to most other marketplaces today. Not to mention the Myspace-esque customizations you can make to your album pages!
Hopefully Bandcamp continues on for a long time relatively untouched.
He still payging six months of health care.
My wife was fired in the last round of layofs in google and they onely paid for healthcare until the end of the month.
I've seen it a few times, but honestly in the US I feel it's not much more than "thoughts and prayers". If you're on a H-1B and get laid off, you need to find a new job within 2-4 months or else you have to leave the US. No amount of "visa support" from the company that laid you off gets around this rule.
The racing mode has been semi-secretly updated through the whole year, files added with each new update [0]
LEGO invested $1b into Epic last year [1] so people were already joking about some kind of collab then. In January the UEFN (Unreal Editor for Fornite) actually had an update with the whole LEGO brickset databse imported into it [2] and there was an internal memo leak this May that they are actually working on a LEGO collab
> For a while now, we've been spending way more money than we earn
I guess giving away free games and not charging deveveloper (or charging very little depending on exclusivity deals) wasn't the best financial decision. Who would've thought?
Shame about the people impacted by this, I actually know some of them, hope they find something quick.
I would wager the free games have been a net positive to their bottom line in terms of customer acquisition. Most games are not big ticket items, and the ones that are are usually out of a push to sell new DLC or a new sequel. I’m guessing it’s not that expensive.
I buy everything off of EGS if I can because of it, even though the EGS is trash
Some of these numbers came out in the Apple suit, it worked out to about $2.37 per user with 7% going on to pay for something giving a cost of $33.23 per paying customer acquired, and an estimated revenue of $40 per paying customer.
They are trying to break into a pretty entrenched marketplace. Steam has a huge head start, EA owns the rights to some of the best selling franchises in the business, and Xbox marketplace has the backing of Microsoft.
Their options to become a major player are limited. Aggressively spending money on customer acquisition was probably the best move they had. Pulling their new games from competing stores risks impacting their game sales. Relying on organic growth would probably see Epic Game Store stuck as another tertiary, niche marketplace, like Gog.
It may not have worked out like they hoped, but it wasn't a bad play.
It was a terrible play, solely because their store suck.
From very early on, gamers were VERY vocal of what they wanted from Epic store, and Epic didn't deliver, instead they shoveled money into the fire basically.
Example of stuff that money could have better been spent on:
1. Discussion/Comments
2. Review system
3. Functioning shopping cart
4. Linux support (instead Epic did the opposite, for example buying Rocket League and removing Linux support)
5. ability to work with other stores (like Gog Galaxy does)
and so on.
Instead they choose to have a shitty, basically unusable store (that by the way, killed an older laptop GPU of mine by sending it to 100% in a screen that was only text, until the thing burned itself down), and "bribe" both creators and gamers, hoping this would replace an actual good product.
I'd argue it was a bad play, they gambled on something others had gambled and failed, and just as the rest they didn't even put a dent in the market. All they did was overspent their resources and now have to resort to layoffs.
You mention EA, and they did try to break into the market and left steam for a while... they had the money, the franchises, the personnel and they couldn't do it. Now they're back on steam. Anyone else would look at what happened and would learn from their mistakes.
To put things in perspective:
They had 2k employees in 2020 and grew to ~6k now.
To me, growing your employee numbers like that seems to be orders of magnitude more costly and risky than licensing some games to give away for marketing.
Having to lay off some people after growing quickly by ~200% does not seem like that big of a failure to me...
PC Magazines in the 2000s also managed to do regular game giveaways just fine (while being much smaller than even 2020-Epic), and I would wager they had razorsharp margins and much less revenue, too.
It would have been difficult for Epic to learn from from EA and Ubisoft's mistakes as they didn't return to Steam until well after the Epic Store launch.
> I guess giving away free games and not charging deveveloper (or charging very little depending on exclusivity deals) wasn't the best financial decision. Who would've thought?
This stuff wasn't the problem at all. By all accounts the free game giveaways have achieved their intended purpose and they are going to continue doing them. Their engine licensing business is looking better and better as Unreal's only big competitor has made a habit of sabotaging themselves.
He literally owns Epic and is worth billions. His rather small $1m/year CEO salary is peanuts in comparison to his net worth and other CEO salaries. Asking this question shows you care more about the optics than the substance of someone cutting their pay. Even if he cut it to $0 it'd be irrelevant as he's not sacrificing anything in the process.
You're making the opposite argument to what you think you are. Your points support that he should cut his $1m/salary to 0 and allow 3-10 other employees to stay on.
You think I'm defending him. I'm not. He could take out a loan against his $5+ billion ownership stake to help keep 100+ employees on. He's not. He's prioritizing the future growth and value of the company despite having the choice not to. You however are too busy being distracted by the shiny toy to realize how much he isn't doing.
You do understand what owning the company means, right? Everything paid to employees beyond the legal minimum is essentially coming 50+% from his pocket. And not paying himself doesn't mean much when that just means Epic keeps the money which is half owned by his anyway. Thus my point that you care more about the optics than the reality of helping those laid off.
It seems that Western society is divided over the question as to whether or not employers have some broader duty of care to their employees beyond the economic arrangement of employment.
If the CEO of a factory had to sell half their maintenance-hungry machines to balance the budget, do they owe it to the sold or retained machines to take a pay cut so they "share in the harm of the layoffs"?
The factory machine example is silly because they are machines and offensive because many people would agree that employees are very much not machines.
> If the CEO of a factory had to sell half their maintenance-hungry machines to balance the budget...
... then they're clearly in dire straits and the company should be looking at any cut they could make including the CEO's compensation. Payment in stock devalues the stock; payment in cash decreases the runway.
I was hoping somebody would pick up what I was trying to put down, which is that there's a fuzzy spectrum between silly examples and a self-evident duty of care between employers and employees.
This is what happens when you fight with Apple. They are losing money from the legal battle and also by not being on iPhone. With Vision Pro and Apple’s interest in gaming, they could position themselves very well and earn tons of money but instead they wanted to reduce the commission they pay to Apple. They are doing amazing stuff with Unreal Engine, it is sad that Apple is partnering with Unity instead of Unreal Engine.
I think this is a good question - as is the question of if they can really expect to achieve what they want for ‘the metaverse’ and Fortnite without Fortnite being available on iPhone.
curious minds would like to know over here as well. add to that, the loss of sales for throwing the tantrum and taking their ball and going home. where's the punishment for those involved in that business venture?
Seriously I grew up playing his games as a kid and when I saw his name in the credits there was a certain warm and tingly feeling of respect and adulation. And now this. I get it shareholders are always #1. Still...
The package he's giving employees is outstanding. The communication is solid.
The alternative is to bleed out financially and put the larger company - the other 84% of employees - at heightened risk. A lot of things could easily go south for Epic, their business isn't guaranteed in the least, and they have 5,000-6,000 other employees to consider.
I don't follow. I was making the point that Tim Sweeney is not a terribly good role model for "enlightened management" in light of his actions when his own interests are threatened.
>We aren't cutting any core businesses, and are continuing to invest in games with Fortnite first-party development, the Fortnite creator ecosystem and economy, Rocket League and Fall Guys
Interesting he mentions investing in Fall Guys specifically when Mediatonic was hit really heavily by these layoffs.
Besides what has been otherwise discussed - you've got to him credit for clear and direct communication.
(Still not quite sure why he/Epic bought a music streaming company like Bandcamp; seems a bit of a stretch even considering content licensing for Epic-based games.)
I could understand maybe turning off the master servers to cut costs, but lets be honest, they could have hosted the entire franchise master servers on a raspberry pi. There was no need to pull the games from stores. They all but guaranteed there will never be any new players and the existing players all resort to piracy now when needing a new install.
At least give an explanation.