It's no secret that the Epic Games Store currently doesn't make a profit. As a result of the lengthy Apple Vs Epic legal battle in the state of California, a whole bunch of information has come to light in regards to Epic's projected revenues for the digital storefront - and none of it is particularly flattering.
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Back in August this year, Apple lawyer's hit out at claims from Epic lawyers that the Epic Games Store was in any way comparable to the App Store.
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"Epic Games Store is unprofitable and not comparable to the App Store", Apple's team hit back. "And will not be profitable for at least multiple years, if ever."
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The lawyer's continued: "Epic lost around $181 million on EGS in 2019. Epic projected to lose around $273 million on EGS in 2020. Indeed, Epic committed $444 million in minimum guarantees for 2020 alone, while projecting, even with 'significant' growth, only $401 million in revenue for that year. Epic acknowledges that trend will continue in the immediate future: Epic projects to lose around $139 million in 2021."
More documents from the Epic vs Apple case have since surfaced, and it looks as if Epic itself expects the store to remain unprofitable until at least 2025.
As reported by Game World Observer, documents provided by Epic Games Store general manager Steve Allison towards the end of November show an internal strategy review for the store and Epic publishing divisions. The information has now started doing the rounds on Reddit.
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The vast majority of the document is about as boring as you'd expect it to be, but there are some interesting bits and pieces of note. In June 2020, the company put together a profit and loss model. From this, we can see Epic increased EGS' revenue projections for 2021 from $547 million to just $547 million - with a noticeable decline for the following years. Take a look below:
- 2022 — from $774 million (as of Fall 2019) to $658 million;
- 2023 — from $1.004 billion to $748 million;
- 2024 — from $1.177 billion to $838 million.
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The document also notes that the Epic Games Store is currently projected to reach $4.362 billion in revenue between 2019 and 2027. But it will not become profitable until 2025, with its combined operating losses reaching a staggering $965 million by 2027.
This is still slightly more optimistic than what Apple's lawyers were saying earlier this year. "At best, Epic does not expect EGS to have a cumulative gross profit before 2027," the team remarked in August.
It's also obviously worth mentioning that if any company can afford to take a hit for a few years, it's Epic. The storefront is just a small part of the company's overall output - output that includes the juggernaut Fortnite franchise. In 2020 alone, the battle royale raked in a staggering $2.5 billion total revenue, and only continues to go from strength to strength. I think Epic will probably be fine.
