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Here"s how much money Epic is burning khổng lồ make the Epic Games Store a Steam competitor.Bạn vẫn xem: Teaching about social justice issues in physical education


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To take on Steam, Epic Games has spent the past two years shoveling Fortnite money into the Epic Games Store, making over 100 exclusivity giao dịch and giving away free games every week. We knew Epic was spending a lot of cash to lớn get customers onto its store, but didn"t have many specifics until now. Thanks to Epic"s big legal fight with Apple, we learned this week that Epic committed around $444 million khổng lồ Epic trò chơi Store exclusivity đơn hàng in 2020 alone. Phew.Bạn đang xem: Sue di tam bien

More precisely, that"s $444 million on "minimum guarantees" for games that release on the Epic Games Store but stay off of Steam for a year. A "minimum guarantee" is just another way to refer to an advance: It means that Epic guarantees the quảng cáo trên internet a certain amount of money whether or not their game actually sells enough lớn cover it. For example, Epic put down $10.45 million for Control.

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Apple says that Epic lost $181 million on the Epic Games Store in 2019, projected a loss of $273 million last year, và projects another loss of $139 million this year.

In its end-of-year report, Epic said that players spent $700 million on the Epic Store in 2020, but third-party game sales only accounted for $265 million of that spending. That $444 million in advances lớn third-party devs isn"t close to lớn being recouped, then. Some of those giao dịch must be for exclusives releasing in the future, but according lớn Apple"s learnings, Epic is going to lớn eat "at least $330 million in unrecouped costs from minimum guarantees alone" if you also consider 2019"s deals.

As for how much the Epic Games Store will have lost in total by the kết thúc of 2021, factoring in exclusives và all other expenses, projections say it"s less than $600 million. Just a bit of spending money, then.

Citing depositions from Epic Games Store VP and GM Steve Allison & Epic VP of business development Joe Kreiner, táo bị cắn dở says that Epic lost $181 million on the Epic Games Store in 2019, projected a loss of $273 million last year, & projects another loss of $139 million this year. Added up, that"s an estimated $600 million that the Epic Games Store will need lớn recoup before it"ll be profitable on the whole. Hãng apple points out that Epic doesn"t think that"ll happen until 2027.

In its new filing (PDF here), Epic puts a happier face on its business plan, saying that it expects the Epic Games Store lớn start earning annual profits in 2023. And what táo apple calls "losing money," Epic would probably call "investing money." This spending is all part of the plan, says Epic, & its 12 percent revenue cut will eventually be enough lớn sustain the store, something it has been saying since it launched the store at the end of 2018.

Other fun things Epic và Apple have to lớn say about each other

Epic called its plan lớn go after Apple và Google "Project Liberty."

Epic has even bigger plans than bypassing Apple"s fee in Fortnite, though. It wants to put the Epic Games Store on iPhones & sell thiết bị di động games with its own payment system, competing with the phầm mềm Store itself, & hopes US courts will rule that it would be anti-competitive for táo to stop it.

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Epic argues that quả táo developers can"t innovate và provide the safety features they want to due to lớn Apple"s overbearing policies, and Apple brings up the Epic Games Store"s unprofitability in part to lớn attack the idea that Epic actually does those things in the first place. "By its own admission, the Epic Games Store—two years after it launched—is still missing "critical" features," writes Apple"s lawyers (echoing large parts of Reddit).

In a mostly-redacted section, hãng apple calls out "significant security breaches involving EGS," possibly referring lớn a 2019 Fortnite breach. It also says that Epic"s customer support team is inferior to Apple"s, citing an internal thư điện tử sent by Sweeney in which he asks "what happened with the community team" that was supposed khổng lồ offer customer service khổng lồ people complaining online. "I"ve seen nothing," wrote Sweeney. "Literally zero, while we"re being endlessly bombarded with claims of problems that Epic isn"t answering."

During the trial, it may also come up that Epic doesn"t force developers khổng lồ use its payment processing for in-game purchases on its store. That"s true in Ubisoft games on the Epic Games Store, for instance, which have their own in-game transaction system. Táo bị cắn dở doesn"t want the court to think that the app Store & Epic Games Store are comparable, saying that in-app purchases are part of the ios platform, not just some store feature, và that the first iPhone didn"t even allow third-party apps (read: you should be thanking us!).

What Epic wants, in brief. (Image credit: Epic Games)

Across the document, apple more or less says: Epic, your store is a bonfire that you chuck money into, all the gamers are mad at you, & if we"d let you run wild, you would"ve caused security breaches on our phones. You needed our app Store to earn $700 million in Fortnite revenue on iOS, you ungrateful nerds!

I doubt comparisons between the Epic Games Store & App Store will be a big part of the case, in the end. Epic"s issue with apple isn"t just that it runs a store with mandatory fees. Epic"s complaint is that táo bị cắn also makes that store & its in-app purchase system unavoidable on a huge portion of the smartphones in the world. That"s what makes it an antitrust issue, in Epic"s view.

Part of Apple"s rebuttal is that Microsoft & Sony vì chưng the same thing with the Xbox và PlayStation. Epic says, no, that"s not the same, because game consoles "do not include general computing features lượt thích smartphones," aren"t very portable, và don"t connect to lớn cellular networks. "Smartphones are critical platforms for developers," says Epic, and since so many of them are iPhones, developers have no choice but to lớn submit to lớn Apple"s rules.Apple says that"s not true, because "consumers can and do switch away from ios devices to apk devices," and lots of people play Fortnite on multiple platforms, so actually it is competitive.

The companies raise many more points and counterpoints in these recent filings, which comprise about 500 pages together. For instance, apple says, as it has before, that Epic tried khổng lồ negotiate a side khuyễn mãi giảm giá with it, implying that Epic"s mở cửa platform evangelism is actually self-serving. Epic, meanwhile, accuses táo apple of burying competitor"s apps in the tiện ích Store search.

Against my expectations, Apple"s is the more aggressive of the two documents, making it the more interesting. Here are a few more tidbits from Apple"s interpretation of the evidence:

Fortnite"s average monthly users declined between 2018 và 2019, và Epic noticed when #RIPFortnite trended on Twitter. (See? Developers vị hear you. And then they develop elaborate plans to sue Apple.)Epic believed Fortnite could be reinvigorated by turning it into a platform for creators, but felt that platform fees, lượt thích the ứng dụng Store fee, might hinder the plan.Epic called its plan khổng lồ go after Apple & Google "Project Liberty." Sweeney was "in the loop" on it "100 percent." (I mean, obviously, he tweets about it all the time.)100-200 Epic employees were involved with "Project Liberty."Epic knew the public wouldn"t necessarily sympathize with it when it defied Apple"s rules, & was concerned about looking lượt thích "the baddies." It paid a truyền bá firm $300,000 to work on Project Liberty.Epic has made more than $700 million just through Fortnite tiện ích ios transactions. (Which is one reason its Epic Games Store losses are no big deal.)

This article was updated on April 10, 2021 to showroom more details about the filings & case.

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