Epic Games Lays Off Over 800 Employees as Apple Legal Battle Drags On

[jlc1978]

I agree with him that 30% is a steep fee to pay for App Store revenues, but I just don't know if mobile & Mac sales were really worth all that.

I disagree that 30% is steep. The App Store significantly lowered eh cost of getting a game to market and in front of a large user base. Way back when a developer was lucky to get 30%, had to upfront all the costs of boxing, printing, marketting, returns etc. and hope they found a distribution channel and made enough to turn a profit. The cost to Apple to provide the service is irrelevant to its value to the ultimate purchaser, which is teh developer.

People argue lowering the commission will lower the price? How many small developers cut prices 15% when Apple reduced their cut instead of pocketing the windfall? I get why developers would do that, just don't argue it's pro-consumer.

Apple has a huge user base that pays more than Android and is a very lucrative market. That put a lot of money in EPIC's pocket and decided they wanted it all.

 

[rp100]

The summary attempts to spin this like it’s an Apple-created problem. Here’s what was actually written by Sweeney:

While Fortnite is starting to grow again, the growth is driven primarily by creator content with significant revenue sharing, and this is a lower margin business than we had when Fortnite Battle Royale took off and began funding our expansion. Success with the creator ecosystem is a great achievement, but it means a major structural change to our economics.

In other words, Fortnite was getting stale, they pivoted to user-created content to boost player interest, and the decrease of profit margins was larger than anticipated.

The letter never explicitly says who was laid off, although 16% of the employee base was stated.


Letter

 

[Arsenikdote]

Let’s not pile on please

People are losing their jobs

People had jobs at Enron. Vocalizing your distaste for a business doesn't mean you don't care about the people who work there. Sorry if this has happened to you and that is why you are having such a strong reaction. I have been there too and it sucks. But when it did happen to me, I would have been happy to hear others talking @#$@ about the company, I wouldn't have been offended!

 

[noblesoul117]

“We don’t have enough money coming in and must lay you off.”

“But here’s 6 months of pay.”

IE, Epic is still paying all of these non-working employees for six months.

Make it make sense.

 

[Arsenikdote]

The employees are paying for the smug attitude of the ceo. Epic made a boatload of money for 30%. Seems like a great deal…especially now that layoffs are happening.

EPIC games is not failing because of the App Store decision. If they were a well run organization then their profits might be impacted by the iOS store, but they wouldn't be laying off 15% of their workforce. There are much larger corporate issues going on than this silly lawsuit.

 

[madeirabhoy]

What was wrong with the Epic "App" store? How did they screw it up so badly?

I’d love to know how much they wasted giving away so many free games. I admit when they were hammering out free games I’d always log in and add to my account even if they were pc only games as I liked that it was costing epic a tiny wee bit of cash.

 

[TechnoMonk]

This headline is implying that there’s a correlation between the legal battle and the layoffs, and we don’t know that to be the case.

I don’t think it’s a significant correlation but cutting themselves from a major mobile ecosystem in tough times can make a big difference. Epic didn’t think it was a big deal when money was pouring in, now that it’s dried up, every bit of lost revenue and legal fees add up.

 

[TechnoMonk]

EPIC games is not failing because of the App Store decision. If they were a well run organization then their profits might be impacted by the iOS store, but they wouldn't be laying off 15% of their workforce. There are much larger corporate issues going on than this silly lawsuit.

In the past when they started it, sure it didn’t seem like a big deal. Now companies are hungry to take any revenue opportunity they can get. When things get tough, every bit of revenue counts.

 

[kc9hzn]

The summary attempts to spin this like it’s an Apple-created problem. Here’s what was actually written by Sweeney:



In other words, Fortnite was getting stale, they pivoted to user-created content to boost player interest, and the decrease of profit margins was larger than anticipated.

The letter never explicitly says who was laid off, although 16% of the employee base was stated.


Letter

Generally, user generated content doesn’t appeal to most users, so it was a poor choice. User generated content is a hard sell for many games, especially if it is accompanied by a perceived reduction in the quality of first party content. (Roblox is the only game of note that I can think of that manages to make decent money on user generated content. And I think that an important part of why Roblox is so successful with it is that it was designed for user generated content in the first place.)

 

[CarAnalogy]

Yikes. Sounds like he would have been better off just taking that 70% revenue to be on the iPhone. And anyone who uses the phrase metaverse unironically at this point automatically gets credibility points taken off.

 

[Arsenikdote]

In the past when they started it, sure it didn’t seem like a big deal. Now companies are hungry to take any revenue opportunity they can get. When things get tough, every bit of revenue counts.

I agree and true, but only in on direction. I agree that every little bit counts when your business is failing. But when your business is failing it isn't because of one little thing.

 

[Toratek]

A classic case of %$*&ing around, and finding out. Sweeney took a gamble with the company's crown jewel, thought that he could eat from the trough Apple built for free, and crippled his company when he got the results.

He deserved this.

His employees, not so much. If they were good at their work they'll find other opportunities quickly, but you would have to be inhuman not to feel badly for them.

 

[TechnoMonk]

Epic made $700 Million from iOS couple years before their law suit. Heck even a 150 M per year with 50% decline sounds like a big chunk, you can afford lot more employees for that revenue.

 

[TechnoMonk]

I agree and true, but only in on direction. I agree that every little bit counts when your business is failing. But when your business is failing it isn't because of one little thing.

Yeah but 350 M a year isn’t chump change.

 

[CarAnalogy]

Tim Sweeney's ego in play unfortunately. Not much of a solid case against Apple (in most areas) and decided to start a battle anyway, oh well.

Which he started by flagrantly violating the developer agreement and publicly embarrassing Apple. Not sure why he thought that would end well.

It does seem like he might get the anti-steering provision removed. Hope he and those 800 employees think that was worth it.

 

[rgeneral]

I think Sweeney just want Apple to buy them.

 

[anthogag]

Then everyone makes their app free, but with an in-app add-on to make it functional.

True, that would happen. Apple can make several plans for developers.

If you choose to publish a free app then Apple gets a cut of purchases in the app.

If you choose a subscription app, Apple gets a cut of the subscription.

If you choose a paid app with in-app purchases, Apple gets a cut of app upgrades, not in-app purchases.

Problem solved.

Next first-world issue...finger prints on titanium frames are causing some people to lose sleep 🤪

 

[adammusic]

It tooks thousands of people to make Fortnite & just one CEO to destroy it

 

[lenningj]

imagine if apple bought epic games and tied fortnite into a subscription bundle with apple arcade for access

 

[paulovsouza]

Pinning layoffs on Apple is so bizarre (I get it’s a strategy to make people hate Apple), but they’re claiming this is a righteous legal battle, for opportunity, yet they’re firing their employees. Apple should hire those employees as a final jab against Epic.

 

[d4cloo]

Epic does not stand alone in the many layoffs happening in the tech and gaming world. Kinda disappointing to see the many juvenile Apple-fanboy responses. This affects many people who are now seeking a job in market that isn’t exactly favorable.

 

[unsui_grep]

I wonder what this means for their new HQ they're building nearby me in Cary, NC? They bought a whole shopping mall to demolish and rebuild for a sprawling campus.

Do you know how far away that is from Apple's new campus? Kind of hilarious that they're moving in next door.

 

[jimbobb24]

“We don’t have enough money coming in and must lay you off.”

“But here’s 6 months of pay.”

IE, Epic is still paying all of these non-working employees for six months.

Make it make sense.

The severance from my workplace for me would be free lunch. Tech really does have a sweet deal.

 

[Arsenikdote]

Yeah but 350 M a year isn’t chump change.

The lawsuit payout?

 

[Allen_Wentz]

Let’s not pile on please

People are losing their jobs

Blaming Apple for the layoffs sounds like an excuse for a company simply culling 16% of its workforce (like many other firms have done).

And anyone getting 6 months severance pay + health care should be able to find another job if they are competent.