Epic Games Can Only Blame Itself For Recent Troubles

Two and a half years ago, Epic Games CEO Tim Sweeney delivered the sad news that nearly a thousand employees at the company were being let go.

“For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators,” Sweeney said on Sept. 28, 2023. “I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that was unrealistic.”

The headcount of those layoffs was “around 830 employees, or 16% of jobs,” according to Sweeney. Earlier this week, over 1,000 more Epic employees were let go, in a statement delivered by Sweeney on the Epic Games website.

Simple math tells you that, if 830 people represent 16%, then the total number of jobs at Epic before the 2023 layoffs was about 5,000. Subtracting that, plus this week’s layoffs, would put the total number at just over 3,000 – but that assumes that there were no other hires (or people leaving the company) in the intervening time. Laying off 1,000 people makes headlines; hiring hundreds, especially over the span of three years, doesn’t.

Indeed, an Epic spokesperson has said that the company still has 4,000 employees, but whatever the actual count, it’s amazing that the company behind one of the most successful games in history has just laid off 20% to 25% of its workforce. If that’s how it is for Epic, what chance does anyone else have?

Good 'Nite

Fortnite’s fortunes are, well, epic, but even that has its limits. As Sweeney said in his statement, it’s bringing in less money than when the battle royale game “took off and began funding our expansion.” That’s how it goes with most any game, no matter how great its initial success. It’s what you do with that growth revenue that matters.

While much of it went back into Fortnite, more than a few pennies were spent on what can only be termed as Tim Sweeney’s vanity projects. First came the Epic Games Store in late 2018. It was envisioned as a competitor to Steam and used the vast war chest generated by Fortnite to lure exclusives and weekly free games, many of which are claimed by users – at cost to Epic – who had little to no intention of playing them.

Seven years later, and Epic Games Store is still the odd man out of video game storefronts. While the base numbers paint a competitive picture – 78 million monthly active users for EGS in 2025, compared to 132 million for Steam – the revenue for those users is still heavily slanted toward Epic’s own titles, most notably Fortnite.

Epic’s self-reported $400 million in third-party spending is massively dwarfed by Steam’s $16.2 billion for the year. Epic's total doesn't include in-game payments from games that process their own revenue, while Valve's total comes from analytics firms, not Valve itself, and includes all revenue, including from Valve’s games, but even sliced in half, it would still be 20 times what Epic Games Store brings in.

A little over two years ago, it was reported that the Epic Games Store still isn’t turning a profit, after five years in operation. The plan, at least as of 2021, was that it would start turning a profit in 2027, though there’s little reason to think that will be happening by next year. If that was in the cards, we probably wouldn’t be seeing all these layoffs.

That revelation came to light during one of Sweeney’s other white whales: his longstanding lawsuit against Apple. He bills it as a fight for “freedom,” when in reality it’s simply an effort to secure a greater chunk of cash, both for his company and for others using the App Store.

Whatever flavor it is, freedom always comes with a cost. In a real battle for freedom, that can be counted in blood, but in this case, it’s only money. The laughably titled “Project Liberty,” has been pricey, though Sweeney said he’s been “taking steps to reduce our legal expenses.”

As Sweeney put it in his statement last week, “we’re spending significantly more than we’re making,” which includes not only those legal fees but $2.1 billion paid out to developers it reported as having paid out to developers using the Epic Games Store as of mid-2025.

I’m sure the developers that were laid off will be pleased to have been a part of Epic's heroic struggles as they send out résumés in the coming weeks.

Unreal expectations

Perhaps I’m being too hard on Epic. They’re hardly the first game company over the past few years to experience explosive growth, bring on a bunch of people, and then let many of them go when things slowed down.

Epic’s meteoric rise began in 2017 with Fortnite’s launch, but a number of game companies experienced something similar, though lesser in scope, during the 2020-21 pandemic years. We’ve been reading about layoffs left and right over the past few years, and that trend is unlikely to stop any time soon.

It’s possible that the games industry as a whole simply overhired half a decade ago and is now realizing that permanent growth it gorged on back then simply isn’t possible. Toss in the economic downturn we’re all experiencing as a result of (waves hands in the general direction of Washington, D.C.) and it’s likely we’ll see more of this sort of thing in the years to come, both in gaming and elsewhere. Even now, a search for "layoffs" in our article archives brings up 46 results over the last two years, and this site covers only a limited selection of games and game companies.

Then again, not every company out there has used its massive good fortune to pursue goals that drained even the seemingly infinite reserves of a worldwide sensational hit game without offering much in return to the most important shareholders every game company has: its employees and players.