The court hearing between Epic Games and Apple have shown Epic has invested millions into 'free games' to try and onboard users.
Fortnite made Epic Games $9 billion USD alone in 2018-2019. Their 'free game' strategy is just a drop in the bucket. Image: Epic Games
Documents revealed during the recent court hearing between Epic Games and Apple have shown Epic has invested millions into games given away for free, which pales in comparison to the company’s Fortnite revenue.
For background, the court case revolves around a dispute between the two tech giants over Epic trying to circumnavigate Apple’s App Store policy. Similar to the discussion about videogame platform revenue sharing--which Microsoft has recently addressed by reducing its PC store cut from 30 percent to 12, matching the Epic Games Store--Epic tried to circumvent Apple’s 30 percent cut on principle by implementing its own payment system into the mobile version of Fortnite. This was a breach of the App Store policy and resulted in the game being removed.
As part of the hearing, various internal documents are available for public viewing for the first time, showing some of the staggering financial figures at play.
First off is an excerpt from a document shown by Simon Carless
, founder of GameDiscoverCo, revealing Epic paid over $11.5 USD million for 38 games used for free giveaways between 2018 and 2019. The maximum paid for any individual game was $1.5 USD million for Warner Bros’ critically acclaimed Batman: Arkham Collection
, followed by $1.4 USD million for independent developer Unknown Worlds’ Subnautica
. Notably, Metro 2033 Redux
was listed as being acquired for no up-front cost, which was likely related to the deal that brought Metro Exodus to the Epic Games Store as a limited-time exclusive.
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This document also includes data on how many redemptions each game had, how many new Epic accounts were created, and subsequent user acquisition cost. According to the data, all but two games--Inside and Celeste--ended up costing Epic less than $10 USD per new user acquired.
These figures are completely eclipsed by documents revealing Epic made more than $9 USD billion in revenue from Fortnite alone between 2018 and 2019. Another document from Microsoft shows how lucrative the mobile gaming market is, with Chinese company Tencent considered the largest industry player, earning an estimated $19.4 USD billion revenue in 2019--more than EA, Activision Blizzard and Nintendo combined.
Another revelation from the court documents included correspondence from 2018 between Epic Games and Sony revealing the two companies struggling to agree on terms regarding crossplay functionality between platforms. Sony has seemingly relaxed its hard-stance on working with other platforms, as signalled by the company’s recent partnership with chat platform Discord.
The court hearing between Epic Games and Apple reconvenes tomorrow, with more details expected to come forward about the two large entities’ ongoing stoush.