Decade Masterplan: Epic’s Strategy

Epic Games Makes Bold Moves Towards Financial Stability

Just over a year ago, Epic Games laid off around 16 percent of its employees. The problem, Epic said, was its own big ideas for the future and just how expensive they were to build. “For a while now, we’ve been spending way more money than we earn,” Epic CEO Tim Sweeney wrote in an email to staff.

Financial Turnaround at Unreal Fest Conference

On Tuesday, onstage at the Unreal Fest conference in Seattle, Sweeney declared that the company is now “financially sound.” The announcement kicked off a packed two-hour keynote with updates on Unreal Engine, the Unreal Editor for Fortnite, the Epic Games Store, and more.

Strategic Cost Control Leads to Financial Stability

In an interview with The Verge, Sweeney says that reining in Epic’s spending was part of what brought the company to this point. “Last year, before Unreal Fest, we were spending about a billion dollars a year more than we were making,” Sweeney says. “Now, we’re spending a bit more than we’re making.”

The Future of Epic Games and Unreal Engine

Sweeney says the company is well set up for the future, too, and that it has the ability to make the types of long-term bets he spent the conference describing. “We have a very, very long runway comparing our savings in the bank to our expenditure,” ​​Sweeney says. “We have a very robust amount of funding relative to pretty much any company in the industry and are making forward investments really judiciously that we could throttle up or down as our fortunes change. We feel we’re in a perfect position to execute for the rest of this decade and achieve all of our plans at our size.

Unreal Engine 6 and the Vision for Interoperability

Epic has ambitious plans. Right now, Epic offers both Unreal Engine, its high-end game development tools, and Unreal Editor for Fortnite, which is designed to be simpler to use. What it’s building toward is a new version of Unreal Engine that can tie them together.

The Concept of the Metaverse and Its Implications

If you read my colleague Andrew Webster’s interview with Sweeney from March 2023, the idea of interoperability to make the metaverse work will seem familiar. At Unreal Fest this week, I got a better picture of how the mechanics of that might work with things like Unreal Engine 6 and the company’s soon-to-open Fab marketplace to shop for digital assets.

The Role of Fab Marketplace in the Metaverse

Fab will be able to host assets that can work in Minecraft or Roblox, Sweeney says. But the bigger goal is to let Fab creators offer “one logical asset that has different file formats that work in different contexts.

Challenges and Opportunities in the Gaming Industry

Of course, there’s plenty of opportunity for Epic, which already makes a widely played game and a widely used game engine and is building Fortnite into a game-making tool. (And I haven’t even mentioned how Unreal Engine is increasingly used in filmmaking and other industries.) The end state sounds great for Epic, but Epic also has to make the math make sense for everyone else.

Mobile Presence and Legal Battles

And it has to do that without much of a presence on mobile. The company has spent years in legal battles with Apple and Google over their mobile app store practices, and it just sued Samsung, too.

Reflections on the Metaverse Trend

There’s one other battle Epic is fighting: Fortnite is still hugely popular, but there is waning interest — or hype, at least — in the metaverse. Sweeney and Persson, however, don’t exactly agree about the term seemingly falling out of popularity.

FAQs

Q: What led to Epic Games laying off employees?

A: Epic Games laid off employees due to overspending on future projects and the resulting financial challenges.

Q: What is the significance of Unreal Engine 6 for developers?

A: Unreal Engine 6 allows developers to build an app once and deploy it as a standalone game for any platform, promoting interoperability.

Q: How is Epic Games addressing the concept of the metaverse?

A: Epic Games is exploring interoperability and collaboration with other platforms like Roblox and Minecraft to create a seamless metaverse experience for users.

Q: What are the challenges Epic Games faces in the mobile market?

A: Epic Games has encountered legal battles with major mobile app stores like Apple and Google, impacting its presence in the mobile gaming market.

Credit: www.theverge.com