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Epic Games Store exclusives will cost Epic $444 million this year

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Epic has been making an ungodly amount of money on Fortnite. That success has enabled a rather serious push into the PC gaming space. The Epic Games Store has been pushing its way into territory dominated by Steam for months, costing tons of money. Developers and publishers alike have been relying on deals for Epic Games Store exclusives to make money by putting their games on Epic ahead of Steam.

Such agreements have made many gamers angry, as they have a variety of complaints about Epic being a lower-quality service. The storefront does lack a shopping cart, and has a very small catalogue of games, just for a few examples of problems. Although that could be a blessing as Steam is full of trash. And all of that has cost Epic a ton of money.

The company has spent $444 million on “minimum guarantees” for games that release on the Epic Games Store. These games are timed exclusives that stay off of Steam for a set amount of time. These deals are basically a cash advance against future sales. Epic is basically buying the time of the companies behind these games in sales dollars. And some titles get bigger price tags than others, Epic paid $10.45 million to get action shooter Control on the Epic Games Store.

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 amount.

In that time, the gaming giant has had more than 100 games offered as free exclusives. All of those free games have brought in a mountain of new users. Although it’s questionable how many of those end up buying games at all. For this reason, the Epic Game Store has been a perennial money-suck. We know this thanks to the ongoing lawsuit between Apple and Epic.

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That lawsuit was originally over store fees and monopoly charges, and it’s still way too early to call a winner. but the discovery process has revealed some interesting details about how much Epic is spending.

According to filed documents, Epic has spent “at least $330 million in unrecouped costs from minimum guarantees alone,” leading some to question the sustainability of the model they’ve chosen. That isn’t as close to reality as you might think. That’s a ton of money, but Epic has plenty of cash and assets to fall back on.

In 2019, Epic Games reported $4.2 billion in revenue and $730 million in earnings before interest, taxes, depreciation, and amortization.

That $330 million is over the last two years, and contrasted with Fortnite revenue, it could be called a drop in the bucket. In April 2020, Fortnite made an estimated net revenue of $400 million. In June of that year, the company raised $750 million in a funding round that included both cash injection and issuing new stocks.

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