The aggressive strategy of Epic Games, publisher of the game “Fortnite”, against the distributor Steam revealed in documents

Since the global success of video games, the American publisher has stepped up assaults against the main video game distributors.

Epic Games decided in December 2018 to launch its own online store, the Epic Games Store, backing it up with the popularity of its flagship game, “Fortnite”.

The big trials in Silicon Valley are often the occasion to see very interesting financial documents emerge, supposed to remain confidential, but published as exhibits for the needs of the hearing. This happened in the case between, since Monday, May 3, the video game giant, Epic Games, to the manufacturer Apple.

Epic Games, publisher of the behemoth game Fortnite, is suing Apple in a US court, accusing the company of taking advantage of its dominant position to impose excessively high taxes on developers who publish apps and games on iPhone and iPad.

Before Apple, Epic Games attacked the Steam store

Since the success of Fortnite, Epic Games has engaged in an aggressive strategy directed against the major video game distributors. Before Apple, the publisher indeed attacked the Steam store, a giant managed by the company Valve, which has a virtual monopoly on the distribution of dematerialized video games on computers.

Seeing that Steam’s major competitors (such as Electronic Arts’ Origin store and CD Projekt’s GOG) are struggling to bite market share at Valve, Epic decides, in December 2018, to launch its own online store, the Epic Games Store. But far from being content to exist alongside Steam, the strategy of the American studio is to attract players by distributing a free game every two weeks.

Eleven million dollars in nine months

According to a new internal document unveiled in the lawsuit’s context against Apple, Epic Games spent, in the first nine months of its store, more than $11 million (€9.13 million) to distribute for free games, sometimes very popular. Thus, to make the independent success Subnautica available, in December 2018, Epic Games paid $1.4 million (1.16 million euros) to the publisher Unknown Worlds. Conversely, Fez, cult title but then already seven years old when Epic distributed it for free in August 2019, cost only $ 75,000 (62,254 euros) to the publisher of Fortnite .

It’s hard to determine what calculations and fierce negotiations resulted in these numbers. A globally established studio like Ubisoft granted Epic Games the right to distribute For Honor for free for two weeks for just $63,000, while Extremely OK (Exok), the independent studio behind platform game Celeste, got $750,000.

The most important part of its offensive strategy vis-à-vis Steam has been to negotiate the exclusive distribution of certain games, thus forcing players who would like to buy big titles when they are released on the Epic Games Store instead of Steam. Thus, in 2020 alone, Epic Games spent at least 444 million dollars (368.5 million euros) to negotiate the exclusive distribution of certain games .

The first two weeks of marketing finally attracted over half a million new registrants to its platform.

This sum only covers the “guaranteed minimum”, is a sum that covers the potential loss of earnings for publishers who do not publish their game on Steam. According to a financial document unveiled in recent days, Epic Games has offered a “guaranteed minimum” of $80 million (66.4 million euros) to publisher 2K to exclusively distribute the game Borderlands 3. In fact, this exclusive came to the company for $115 million, adding additional costs, such as the marketing campaign for the game. The first two weeks of marketing ultimately brought in $9.2 million (7.63 million) to Epic Games and attracted more than half a million new registrants to its platform.

The astronomical revenues generated by Fortnite allow the American studio to lose hundreds of millions of dollars each year for its online store, to make it a real competitor to Steam, which has over 120 million active users. Each month.

The most important part of its offensive strategy vis-à-vis Steam has been to negotiate the exclusive distribution of certain games, thus forcing players who would like to buy big titles when they are released on the Epic Games Store instead of Steam. Thus, in 2020 alone, Epic Games spent at least 444 million dollars (368.5 million euros) to negotiate the exclusive distribution of certain games .

The first two weeks of marketing finally attracted over half a million new registrants to its platform.

This sum only covers the “guaranteed minimum”, ie a sum that covers the potential loss of earnings for publishers who do not publish their game on Steam. According to a financial document unveiled in recent days, Epic Games has offered a “guaranteed minimum” of $80 million (66.4 million euros) to publisher 2K to exclusively distribute the game Borderlands 3. In fact, this exclusive came to the company for $115 million, adding additional costs, such as the marketing campaign for the game. The first two weeks of marketing ultimately brought in $9.2 million (7.63 million) to Epic Games and attracted more than half a million new registrants to its platform.

The astronomical revenues generated by Fortnite allow the American studio to lose hundreds of millions of dollars each year for its online store, to make it a real competitor to Steam, which has over 120 million active users. Each month.

Ironically, Steam’s parent company Valve is being sued. On April 27, independent developer Wolfire Games, also creator of the online store Humble Bundle, sued Valve in federal court, accusing it of abuse of dominance.



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