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Epic Shenanigans
In case you haven’t seen the news, the Epic Store has poached another timed-exclusive game release: Metro Exodus. The wrinkle this time is that rather than being planned from the start, Deep Silver must have been given a fat stack of secret cash because the game was already available on pre-order from Steam (which are still being honored, until removed from the Steam store). And, you know, the game was all set out to be released in 2.5 weeks.
I mentioned “fat stack of secret cash” because while the revenue split is more generous in the Epic Store, they are actually doing the only thing I said would matter in the competition space: Metro Exodus had its MSRP lowered from $60 (on Steam) to $50. Which means the gross revenue from this game would be:
- Steam = $60 * 0.7 = $42
- Epic = $50 * 0.88 = $44
That calculation demonstrates how a developer could still make a higher profit on the Epic store by dropping the price to $50, but here’s the thing: they are going to be losing a non-trivial amount of sales for not being on the PC’s largest storefront. Enough to matter? Remains to be seen. The Metro Redux (aka remasters) of the first two games sold 1.5 million copies back in 2016. That would be $3 million more in Deep Silver’s pocket if they sold the same amount of games… at full price… as the remasters of the last two games combined.
That $2 difference between revenue is 4.5%. If Deep Silver sells 4.5% fewer copies due to not being on Steam, then they lose almost $3 million. I mean, without even doing much calculations, you gotta know that for every Steam sale lost, they have to sell 22 copies in the Epic Store to break even. Ergo, I suspect that Epic was waving something more than simply the 88% cut in Deep Silver’s face.
And that’s kinda the baffling thing about all this. I’m not opposed to competition between companies, especially when it results in a gain in consumer surplus. Competing on price is a huge deal, and I’m sincerely amazed that Deep Silver pulled that trigger to sell at $50. But… why then yank the title from Steam as a “timed-exclusive release”? That isn’t consumer friendly or useful to anyone at all. Why not let the same title be purchasable on both platforms, and allow nature to run its course?
We’ll have to see how things shake out a year from now, when the game is finally released on Steam… presumably at a huge discount because it will have been a whole year.
In An Age 
Epic Whims
Nov 13
Posted by Azuriel
Epic is in court again, this time facing off with Google. And during the testimony, it was admitted that the Epic Game Store is still not profitable. Not sure of the current figures, but they had lost $330 million back in 2021. That is not always a bad thing for tech companies, who typically operate under a “if you build it, they will come” fantasy funded entirely by rich gamblers who hope to get cheap shares of the next Facebook. Still, even Epic thought their storefront would be profitable by 2023.
Interestingly though, Epic is not being funded by venture capitalists per se. They are being funded by their ridiculous, beyond-all-comprehension wildly successful Fortnite money:
I knew Fortnite was successful, but part of me still imagined that the Unreal engine was most of what sustained the company. That does not appear to be the case.
My question is: how long can this go on? I mean, on the one hand the Fortnite money machine is still printing. And, hey, Uber has been around for 9 years and only became profitable a few months ago. But we’ve also seen Epic lay off 16% of their staff this year and divest themselves of Bandcamp and other properties. Clearly, sustainability is a concern.
With that backdrop in mind, will they continue dropping free games every Thursday through 2024?
Beyond the freebies, this is relevant to my interests because of all the (timed) exclusives too. Dead Island 2 is still not available on Steam, and likely won’t be until next April. While the Epic Games Store has improved over the years – they have had wishlists and shopping carts for at least two whole years now! – exclusivity equals higher prices for longer. Who knew? Some of that is changing a little, as it seems Fanatical and Humble are selling an EGS key for Dead Island 2, but that’s just 1 of 2 listed key sellers to the dozens of Steam alternatives.
Not that I’m hurting for games, of course. But I do want to play Dead Island 2.
Posted in Commentary
2 Comments
Tags: Court, Dead Island 2, Epic Store, Layoffs, Loss Leader, Timed-Exclusive