Epic Games Is Now 'Financially Sound,' Says CEO Tim Sweeney After Major Layoffs

Epic Games CEO Tim Sweeney declared the company "financially sound" during a presentation at Unreal Fest 2024.

This statement comes after a tumultuous period marked by significant layoffs and strategic divestitures.

The Layoffs And Strategic Shifts

In September 2023, Tencent ADR TCEHY backed Epic Games made headlines when it announced a massive reduction in its workforce, laying off approximately 830 employees—about 16% of its total staff.

See Also: Fortnite Just Made Parenting Easier: How To Control Your Kid’s Playtime With Latest Update

Alongside the layoffs, Epic divested its music service platform Bandcamp and spun off the majority of SuperAwesome, a child-safe technology company. These moves resulted in the exit of around 250 additional staff members.

At the time of the layoffs, Sweeney said that Epic had been "spending way more money than we earn," pointing out the need for a "major structural change to our economics."

Furthermore, he noted that the explosive growth of Fortnite — which initially funded the company's expansion — had transitioned to a model with lower profit margins due to revenue-sharing with creators.

A Year Of Rebuilding And Record Success

Fast-forward to Unreal Fest 2024, and Sweeney presented a much more optimistic view of Epic's state.

“I’m happy to tell you now that the company is financially sound, and that Fortnite and the Epic Games Store have hit new records in concurrency and success,” he said, according to GamesIndustry.biz-

And added: "We spent the last year rebuilding and really executing solidly on all fronts."

Fortnite reached 110 million monthly active users (MAUs) during the recent holiday season. This milestone shows the game’s lasting appeal even seven years post-launch, marking a significant increase from the 78.3 million MAUs reported in August 2018.

While Epic Games remains in a competitive struggle with Steam for dominance in the PC gaming market, the Epic Games Store reported 70 million MAUs in the last month. However, the store continues to operate at a loss, facing challenges in converting its growing user base into profitability.

Legal Challenges And Financial Implications

Meanwhile, Epic Games is still navigating a complex legal landscape. Sweeney has openly stated that the company’s ongoing litigation against tech giants like Apple and Google has cost Epic around $1 billion.

The legal battles primarily stem from Epic’s attempt to create a competing app store for mobile devices, which has led to a series of costly disputes.

In a fresh move, Epic has initiated another lawsuit against Samsung and Google regarding a feature known as Auto Blocker, which complicates the installation of Epic Games on mobile devices.

Read Next:

• Epic Games Files New Antitrust Lawsuit Against Google, Samsung Over App Store Restrictions

Image credits: Shutterstock.