News Epic Games Store

Knurek

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texhnolyze

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Ge0force

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I bet Tim is gonna go all out with exclusives on The Game Awards.
Yeah that's what I'm expecting as well. Pretty sure Epic will do the announcements themselves to minimize backlash towards the developers, which is becoming a factor for devs to refuse Tim's moneyhats.
 
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Alexandros

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Yeah that's what I'm expecting as well. Pretty sure Epic will do the announcements themselves to minimize backlash towards the developers, which is becoming a factor for devs to refuse Tim's moneyhats.
I personally expect a subdued presence. If the results of the first year were not what they expected they could double down or scale back. The former is possible but I expect the latter. I think Epic has become aware that customers will not blindly "follow the games".
 

Ge0force

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I personally expect a subdued presence. If the results of the first year were not what they expected they could double down or scale back. The former is possible but I expect the latter. I think Epic has become aware that customers will not blindly "follow the games".
I'm not sure. Epic must have noticed that while several indie games have underperformed on their store, the mainstream audience DOES follow AA(A) games with a popular license (WWZ) or (sequels for) games that are already popular (Heavy Rain, Borderlands 3). That's why I expect Epic to double down on mainstream AA(A) stuff, including Dying Light 2, Dead Stranding and the new Batman game.

I definitely don't see Epic giving up already. They have the media and lots of popular devs, publishers and influencers in their pocket.
 

C-Dub

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I'm not sure. Epic must have noticed that while several indie games have underperformed on their store, the mainstream audience DOES follow AA(A) games with a popular license (WWZ) or (sequels for) games that are already popular (Heavy Rain, Borderlands 3). That's why I expect Epic to double down on mainstream AA(A) stuff, including Dying Light 2, Dead Stranding and the new Batman game.

I definitely don't see Epic giving up already. They have the media and lots of popular devs, publishers and influencers in their pocket.
People may use a different client for the odd game here and there, but that's not vindicating Epic's strategy of carpet bombing exclusives. The idea was to get people just buying games on EGS, but the default position of buying on Steam hasn't changed. It has to have been incredibly wasteful for them.

My gut is saying that they are going to rethink their strategy at some point or another. So they may scale down the exclusives, opting for AAAs only going forward (as those seem to be the more successful ones) or take a new path. Considering Game Pass has actually made an impact, maybe doing a Fortnite-driven sub is their new strategy?

Watch: Valve will no longer be the enemy, but Microsoft. Epic will be talking about the "multi subscription future" before long and railing against MS for leveraging an unfair advantage by being the platform holder to push their gaming sub.
 

Ge0force

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People may use a different client for the odd game here and there, but that's not vindicating Epic's strategy of carpet bombing exclusives. The idea was to get people just buying games on EGS, but the default position of buying on Steam hasn't changed. It has to have been incredibly wasteful for them.

My gut is saying that they are going to rethink their strategy at some point or another. So they may scale down the exclusives, opting for AAAs only going forward (as those seem to be the more successful ones) or take a new path. Considering Game Pass has actually made an impact, maybe doing a Fortnite-driven sub is their new strategy?

Watch: Valve will no longer be the enemy, but Microsoft. Epic will be talking about the "multi subscription future" before long and railing against MS for leveraging an unfair advantage by being the platform holder to push their gaming sub.
Good points. As I've said many times before: exclusivity has never lead to loyalty to a certain storefront on PC, with the Windows Store as most recent example. While plenty of people were using the Windows Store for popular exclusives like Forza and Sea of Thieves, almost no one used it for games that could be bought elsewhere.

I don't see how Epic's exclusives will be any different, unless Epic actually succeeds in keeping the majority of the most popular PC games away from other storefronts. If they could keep this up a couple of years, an entire generation of gamers wouldn't even bother to create an account for Steam. I believe that was Epic's original plan, but obviously it didn't work out as they expected.

So yes, no doubt Epic is working on a new strategy. But I would be very surprised if exclusivity won't be a part of it. If Epic is actually working on a subscription service, I expect that the majority of games in that service will still be 3rd party moneyhats.
 

Kyougar

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I'm not sure. Epic must have noticed that while several indie games have underperformed on their store, the mainstream audience DOES follow AA(A) games with a popular license (WWZ) or (sequels for) games that are already popular (Heavy Rain, Borderlands 3). That's why I expect Epic to double down on mainstream AA(A) stuff, including Dying Light 2, Dead Stranding and the new Batman game.

I definitely don't see Epic giving up already. They have the media and lots of popular devs, publishers and influencers in their pocket.
If Tim has an endgame, he would want a viable store where customers buy games that he didn't have to buy.
So, it doesn't matter if those AA and AAA games were cautiously successful. For the Store it only matters if the mainstream Audience who came because of exclusives, stays and buys other games.
 

Ge0force

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Yeah, like, let's not pretend a porn game would fly on EGS let alone get an exclusivity deal lol
I think you're missing the point. This dev is claiming that he added adult content as a 100% guarantee that his game won't go EGS exclusive, since Epic doesn't allow it.

Of course, it's very likely that devs criticizing Epic's moneyhats are doing this to promote their games. But because this also helps changing the narrative among mainstream gamers and in the media, I don't really care. I see it as a win-win situation for both gamers and developers.
 

RionaaM

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Years in the making.

If I'm reading the article right, this is how DMR-free games work everywhere. It's kinda strange if they can be launched through EGS without owning them, but being able to play DRM-free games while not logged in is exactly how it should be. By definition, they aren't locked to any kind of account system or validation or anything, so this really seems like mocking EGS for the sake of it.

Now, if the topic was whether Epic should enforce a client DRM, a la Steam's CEG, that could be an interesting discussion. But laughing at EGS for treating DRM-free games like, well, DRM-free games is silly in my opinion.
 

madjoki

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If I'm reading the article right, this is how DMR-free games work everywhere. It's kinda strange if they can be launched through EGS without owning them, but being able to play DRM-free games while not logged in is exactly how it should be. By definition, they aren't locked to any kind of account system or validation or anything, so this really seems like mocking EGS for the sake of it.

Now, if the topic was whether Epic should enforce a client DRM, a la Steam's CEG, that could be an interesting discussion. But laughing at EGS for treating DRM-free games like, well, DRM-free games is silly in my opinion.
It applies to games using epic drm, even those with third party drm too, like border lands 3 with denuvo until revalidation (windows update)
 

Amzin

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I think you're missing the point. This dev is claiming that he added adult content as a 100% guarantee that his game won't go EGS exclusive, since Epic doesn't allow it.

Of course, it's very likely that devs criticizing Epic's moneyhats are doing this to promote their games. But because this also helps changing the narrative among mainstream gamers and in the media, I don't really care. I see it as a win-win situation for both gamers and developers.
Yea they mention that the post is a marketing post, but the dev was looking for a way to show consumers that they wouldn't be bought up by Epic and someone suggested making sure the game won't qualify in the first place, i.e. "more boobs", so the dev took their normal genre (narrative RPG) and based it around a new (for them) setting of a brothel of some kind.

The whole thing is mostly amusing to me but I do applaud their commitment to making sure they cannot be bribed by Epic. They have no history of lewd games so it's not like Hunie devs making a stunt post or something.
 

Swenhir

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I think this deal might reflect Kojima's ethics rather than a general consensus about EGS and timed exclusivity. I'd like to think it represent the later, but DS is a bit of a special case.
 

bobnowhere

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Clearly Kojima didn't want it exclusively on Epic, I'd bet my house 505 and Epic were pushing for it. Epic could then have stuck to their guns and missed out on one of the biggest releases of next year and look like a 2-bit store or just put up with the simultaneous release. Now, did this co-release still come with a catch? Wouldn't be surprised at all if all external keys are Epic, especially Humble who clearly are swimming in Epic moneytrucks.

505 pushed Control hard free with hardware (AMD and Nvidia), they'll probably do the same with DS and it will be Epic keys again. A smarter (still moneyhat) strategy would be to try and control the external key market. Strange conincidence the the new humble experience, with all the forced lock ins, launches a few days before stuff like Ashen launches on steam, surprise Epic Ashen keys in the new Humble?
 

Rogue Agent

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I recall that during a Gamescom conference, Kojima revealed a video where Snake was inside a cardboard box with a Steam logo on it and there was steam coming out of the cardboard box. This was basically an announcement that MGSV was coming to Steam. So this Death Stranding news is probably also to do with Kojima.
 

C-Dub

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Kojima definitely likes Steam, but let's not write 505 off cynically - they've clearly decided the best strategy for this game was probably not in exclusivity. And they have released other games on Steam that were prime EGS Kickstarter controversy bait.

The reality of Control's exclusivity seems to be down to the suspicion that it wouldn't sell well. In that sense, it was a smart business move because the game obviously didn't do well on any platforms and Epic are holding the bag for it.
 

Ge0force

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The reality of Control's exclusivity seems to be down to the suspicion that it wouldn't sell well. In that sense, it was a smart business move because the game obviously didn't do well on any platforms and Epic are holding the bag for it.
Perhaps. But once more, Remedy has alienated a part of their potential customers, preventing them to build a loyal fanbase. Because of this, it's not unlikely that their next game won't sell very well either.
 
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fantomena

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Well, Remedy alienated me. Big fan of Max Payne 1 and 2, Alan Wake is one of my favorite games of all time, played it multiple times of 360 and PC. QB despite being dissapointing, still an enjoyable game. Will not buy Control until it's on Steam.

Also, the second expansion to be released for Control might be related to Alan Wake, so I will get the complete edition when it's out on Steam.

Plus, if Nvidia has releases their next RTX card series (3000 I think it's called) before Control is releases on Steam, I will also play it with ray tracing.
 
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MJunioR

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I would have pre-ordered Control since it's a Remedy game and all that but thanks to Tim, all my hype went away and watching that DF video about the PS4 version I noticed that Control really wasn't looking like my cup of tea. Right now I couldn't care less about it even if I wanted to. Same goes to Ancestors.

Thanks Tim!
 

C-Dub

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Perhaps. But once more, Remedy has alienated a part of their potential customers, preventing them to build a loyal fanbase. Because of this, it's not unlikely that their next game won't sell very well either.
Oh, don't get me wrong, I agree. Part of the tragedy of Remedy is that they can never foster a fanbase because they or their publisher signs them up for exclusivity bullshit. Part of it is also not knowing what to do with them or how to market their games.

In short, they need to pick better partners. Microsoft, 505 and Epic have all been bad picks. My gut tells me they will sign with Sony next, which itself is a big mistake. They need to foster a cross-platform fanbase for all of their games, not alienate one audience or another on a game-by-game basis.

You can only do exclusives and publishing deals if your partner believes in your game. 505 clearly decided Control was going to flop and Epic didn't care about their game beyond it not being on Steam.
 
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lashman

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Epic Games (no stock ticker here!) The name conjures up different things for different gamers. Lust from Fortnite fans, bile from people who wanted to buy Control or Metro Exodus at launch on Steam, and free PC games for a lot of us courtesy of the Epic Games Store. Like a lot of people, I was never into Fortnite and broadly indifferent to the Epic Games Store as I had basically never used it other than to sign up for an account and get free games whenever they are offered. As with a lot of other people, the number of games I’ve got tied to my various accounts through various bundle purchases etc over the years is excessive and I long ago gave up any hope of getting to most of the stuff in my various libraries. Even so, free is free and I’ll take it.


Fast forward a bit however and a game I was looking forward to coming out was going to be an Epic Games Store exclusive. John Wick Hex (FYI, it’s a great game!). I didn’t particularly get all the gamer ranting about the store, content fragmentation is part and parcel of being a PC gamer these days what with Steam, Origin, UPlay, GOG and I’m sure others. Adding one more to the mix seems insignificant at this stage.


So John Wick Hex launches and I’m using the Epic Games Store. In general I have no issue with it, right up until the first time I try to fire it up on the laptop and discover that cloud saves aren’t a thing. What?! Yep that’s right. A bit of googling reveals that Epic is rolling it out slowly across its library. It seems relatively basic functionality that if you want to have a PC game store and launcher, you should really be building in for launch day but there we are.


This gets me thinking a bit. I’ve gotten quite a few free games from Epic over time and seen some rumours around what it’s doing with all its money but it’s probably worth digging a bit more in to some of the activities of this private company.

Epic Games – A Financial Behemoth of Gaming

While still having a way to go to be number one from a financial metric perspective, Epic is still huge. A funding round about a year ago brought in an additional $1.25 billion from a variety of firms and apparently valued the company at about $15 billion. Chinese games, AI and general entertainment goliath Tencent (HKG:0700) remains the largest shareholder after a shrewd pre-Fortnite success investment in Epic when it put $330 million into the firm back in 2012 and took a 40% stake. A deal which (not including any subsequent dilution) puts its holding at about $6 billion, an 18x return in 6 years isn’t bad.


Epic still is something of a one trick pony though in the financial stakes. Fortnite propelled it to big financial success but it’s still got a way to go to catch up with the big boys. Activision Blizzard (NASDAQ:ATVI) is over $40 billion, Electronic Arts (NASDAQ:EA) is almost $29 billion and Tencent (often classified as the biggest gaming company in the world although that is something of a misnomer given its other interests) is about $400 billion. Still, other publicly listed games companies are smaller with Ubisoft (EPA:UBI) and CD Projekt Red (WSE:CDR) both coming in at a relatively paltry $6 billion apiece.


Remarkably, despite all of this dilution of his holding, founder Tim Sweeney still reportedly retains overall control of the firm, although as part of its deal, Tencent does get board level representation. Sweeney has famously commented that Tencent has basically no control over the company, particularly as trade tensions between the US and China have ratcheted up. It’s important to understand that while day to day operations and strategic decision making often rest with a company’s executives, boards do wield a kind of soft power over companies and can set the tone for the operation of a company.


Additionally, people will no doubt be familiar with Tencent’s approach when it came to one of its portfolio companies, Riot Games (which Tencent now owns entirely) and the debate over a mobile version of League of Legends. When Riot seemingly refused to develop a mobile version in the past, Tencent went ahead and created a similar mobile game called “Honour of Kings” for Chinese audiences which has proven somewhat successful. Perhaps unsurprisingly, since then Riot has agreed to make a mobile version of League of Legends.


So yes, while it may be true that for the time being, Tencent has “zero input” into the Epic business, this is at least in part due to the fact that Tencent's ambitions for its company are likely aligned with the plans it has at the moment, however this is unlikely to last forever. At the moment, Epic is doing what it should be and monetising its best IP to good effect, but Fortnite will eventually wane and when it does it will be interesting to see what happens if Epic’s decisions don’t align with those of its largest shareholder.

Epic is Trying to Creating a Platform Economy of Gaming

So with its huge cash pile, Epic feels like it is still at least somewhat spiritually aligned with the world of the AAA desktop game. Despite having a huge success in the free to play and microtransaction world of Fortnite which many gamers loathe, despite losing some notable talent over the years to other companies, particularly after the Tencent investment and the clear direction of moving away from big, single player titles to F2P (Rod Ferguson, the lead developer of Gears of War for example), Epic has effectively been subsidising a lot of other companies.


Recent figures which came to light show that Control publisher 505 received $10.5 million which looks to be for the Epic Games Store exclusive rights to Control, while 505 apparently provided about $8 million in development funding to Remedy to make the game. Additionally, Unreal Engine (which Epic owns) has effectively been made free to developers who will sell their game through the EGS, effectively saving companies the usual 5% fee for the engine (which is still payable for games sold through other storefronts). Couple this with the lower fees for selling via the EGS (12% rather than Steam’s traditional 30%) and it’s clear that game developers are getting a bigger share of the pie from their games.


This has seemingly pushed Steam to change its fee structure and the storefront now has tiered fees starting at 30% and dropping to 25% and 20% as a game sells more, so in this sense, the competition is good for developers, which in turn should be good for gamers. In this sense, competition is good and it is generally helping things. Even so, it is clear that Epic saw the writing on the wall and comments from Sweeney have shown that he views the big money as being associated with the online, F2P model.


Epic continues to pursue paid exclusives for its store aggressively with whispers of one game even receiving a 100% subsidisation of development costs by Epic until said game earns back their dev costs via Epic Games Store sales. Is this genuinely a business model that the firm should be pursuing though?

Wrapping Up – Investors Eventually Want Return…

…but can Epic give them one? Thus far the answer has obviously been yes to its earlier investors (notably Tencent, to a lesser extent Disney NYSE:DIS). But we’ve seen this year that public markets have started to reach a turning point with the once reliable tech IPO seemingly floundering this year with a number of high profile companies trading below their placing price. Big investment on the expectation of future returns from a hit game maker that is raking in piles of cash from Fortnite may be possible but if indeed the economic cycle is approaching a peak for this iteration, throwing precious Fortnite cash at free games to attract gamers to its storefront, exclusives and giveaways like the Unreal Engine may be short lived.


Private equity is a very different game to public markets and it may be that Epic was able to convince a select group of investors of the benefits of its strategic vision which may not have held water had the firm attempted to access publicly traded status via an IPO like we saw with the WeWork debacle.


Platform economies can be powerful drivers of businesses but Epic doesn’t particularly feel like it’s doing anything innovative with its Fortnite cash at the moment. Trying to gain traction in terms of market share of PC game purchases is undoubtedly a big pie that it may want to pursue but it feels like it’s simply throwing cash around while looking for the next big thing to eventually replace Fortnite cash as the game’s revenue profile dips. Is a game store with Unreal Engine exclusives really enough to replace what last year amounted to $2.4 billion in revenue? Possibly, but it seems unlikely.


Fortnite spending is (according to research by Edison Trends) down about 52% from Q2 2018 to Q2 2019 so the decline has already clearly begun. It may be that Epic Games has another hit up its sleeve to come once Fortnite’s revenue has dipped sufficiently and it feels it has milked that particular cow as much as it can. Exactly what would’ve been revealed to the recent investors regarding roadmap was likely important and part of what convinced them to invest in Epic at what could be the peak if no further hits materialise. It seems unlikely that the pitch:


“Hey guys, we’re gonna make the best PC gaming storefront the world has ever seen and Steam, Origin, Uplay and all the others will have to close up shop giving us all PC gaming sales commission revenue and then jacking up our fees”


Would’ve been enough to convince investors to pony up, so there must be something else to come. A swathe of as yet unannounced exclusives due to the Unreal Engine licensing would help one assumes but there must be other plans. In the event of an economic downturn, discretionary spending (as everyone knows) is the first thing to go out of the window. Epic is undoubtedly helping the single player AAA industry at the moment with the kinds of terms it’s offering for game engines, store fees and exclusives but that can’t last forever. With Fortnite cash drying up and the amount of time it takes to develop games being measured in years, it must have something else up its sleeve.


PC gaming worldwide reportedly brought in about $30 billion in 2018. Even if there were no other stores and all of that was sold through the Epic Games Store (never going to happen of course), it would only have amounted to $3.6 billion in fees. Growth in the PC gaming market and games store domination can't be the only prong in its strategy.


We’ve reached out to Epic Games for comment on this piece and will update with any reply.
 

MJunioR

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WCCF said:
This has seemingly pushed Steam to change its fee structure and the storefront now has tiered fees starting at 30% and dropping to 25% and 20% as a game sells more, so in this sense, the competition is good for developers, which in turn should be good for gamers. In this sense, competition is good and it is generally helping things.
lol, WCCF at its best.