The costs of Epic Games Store's market penetration

Tech giant has spent a fortune in gaining market share.

Epic losses millions in an attempt to gain market share from Steam.

Epic Games Store could cost $330 million for Epic in their battle to gain market share from Steam, which stems from the Games Store’s free titles and exclusive third-party game deals. The latter alone costed $444 million in 2020 as Epic was willing to spend a fortune in building content for the Game Store.

These games are exclusive for a year in which Epic spent money on ‘minimum guarantees’. This means they offer advances to publishers as guarantees regardless if the games recoup their number in sales.

Players spent $700 million on the Games Store in 2020, though the third-party games accounted for $265 million of the total.

Apple forecasts Epic will lose $330 million from the minimum guarantees and nearly $600 million by the end of 2021. They claim Epic Games Store will not turn a profit until 2027. Currently Epic is engaged in a legal duel with Apple over antitrust issues regarding Fortnite.

Epic on the other hand is defiant, stating the company generates enough revenue to take the losses and considers it to be a long-term investment. They believe the Games Store will turn a profit in 2023.

What do you all make of this ‘Epic’ news?