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The big picture: Legal battles against Apple and Google have repeatedly brought attention to the struggle faced by Epic Games' store. The company has spent several years shoveling hundreds of millions of dollars to thwart Steam's dominance in the sector with no success.
After nearly five years since the Epic Games Store launched, the company admitted this week that it still isn't profitable. Although Epic remains committed to growth, acknowledgment of the storefront's current position indicates it has missed prior goals.
The admission came during testimony from Epic Games Store's boss, Steve Allison, during the company's ongoing antitrust suit against Google. The situation echoes criticisms Apple made against Epic during its legal battle two years ago.
When Apple and Epic went to court over the former's walled ecosystem in 2021, the Cupertino powerhouse pointed out financial statements showing the Epic Games Store had lost hundreds of millions of dollars over the two years before the hearing. Estimates indicated that Epic wouldn't recoup those losses until 2027, but the company later said it hoped for the store to reach annual profitability by 2023. Apple countered, saying it doubted the storefront would ever make money.
Allison's admission this week suggests Epic has missed its initial targeted timeline. The losses primarily stem from the millions the company pays game developers to ensure their newest titles are temporarily exclusive to the Epic Games Store – these payments totaled $444 million in 2020 alone. Apple called these and other practices unsustainable.
Epic also pays developers to offer a rotating list of free games and only takes 12 percent of sales revenue. Since launching the store, Epic has rallied against the standard 30 percent used by most digital storefronts, including Apple, Google, and console manufacturer like Sony and Microsoft.
Court testimony recently began for Epic's lawsuit against Google. The Fortnite and Unreal Engine maker claims the search engine giant's tight control over Android and the Google Play store amount to a walled garden. Initially, 36 US states, Washington DC, and dating app company Match shared Epic's complaints, but Match's new terms with Google leave Epic as the sole remaining complainant.
Epic's prior legal fight with Apple ended with the Cupertino giant emerging largely victorious. Fortnite remains banned from the App Store (though it is accessible over cloud services). Additionally, Apple is not required by law to allow alternative stores or app sideloading. However, the court ruled that Apple must make concessions regarding in-app payment processors. That result reflects poorly on Epic's chances against Google.