- Epic Games is the veteran game development studio that created “Fortnite,” in addition to many other games over the past 25-plus years.
- In late 2018, Epic leveraged its massive “Fortnite” player base to launch a major new initative: The Epic Games Store.
- In the following months, Epic has made several moves to take on Steam – the dominant digital storefront for PC gaming – and some people are furious.
- Visit Business Insider’s homepage for more stories.
With hundreds of millions of players, “Fortnite” continues to be the biggest game in the world – but that won’t last forever.
“Fortnite” creator Epic Games is aware of that, and it’s no surprise that the company is making moves to leverage its massive “Fortnite” playerbase into something longer-term: The Epic Games Store.
In the last three months, Epic Games has taken its storefront from burgeoning underdog to serious competition. The way Epic has gone about that ascent has ruffled some feathers in the gaming community, and it’s resulting in unfortunate consequences for developers.
Here’s what’s going on:
1. December 2018: The Epic Games Store launches.
The heavyweight in the PC gaming world is Valve’s Steam service, a digital storefront and gaming platform that acts like a virtual console: It has friends list services, and achievements, and many other rich features people expect from services like Xbox Live and PlayStation Network.
Most importantly for the hundreds of millions of Steam users, the service is a digital library. It’s where you buy games that are then updated and managed by Steam – it offers order to the chaotic, balkanized world of PC gaming. All your games, all your friends, all in one place.
For game makers, Steam is the largest PC gaming marketplace in the world – it offers massive exposure and a cohesive platform.
And for Valve, Steam is a tremendously profitable venture – for every dollar spent on Steam, Valve gets a cut. Traditionally, that cut has been about 30%.
Steam is the entrenched leader, and the Epic Games Store is the new upstart. It has far fewer features than Steam, far fewer games in its library, and – crucially – a much higher profit margin for anyone selling games.
The most foundational way that Epic Games is taking on Steam is by taking a far smaller, 12% cut from anyone selling games on its storefront. And that is extremely attractive to game makers.
At the same time, it’s attracting very many of “Fortnite’s” millions of PC players: Anyone who has an Epic Games account to play “Fortnite” already has an Epic Games Store account, too.
2. Epic arranged for a series of increasingly high-profile exclusivity deals — and this upset some folks.
To be clear, no one is upset about Epic Games offering a larger cut of sales to game makers.
The first major issue surrounded a game named “Metro Exodus” – the third game in the “Metro” series of first-person shooters set in a post-apocalyptic Russia.
Just two weeks ahead of the game’s February 15 launch date, Epic Games announced “Metro Exodus” would be an Epic Games Store exclusive – it would arrive on Steam one year later.
But the game’s Steam store page was already live, and some people had already pre-ordered. Many others had played the previous two games through Steam. And some of those folks were pretty upset to hear that the game could only be accessed on PC through a totally different storefront.
Then Valve issued a statement on the game’s preorder page (emphasis ours):
“Sales of ‘Metro Exodus’ have been discontinued on Steam due to a publisher decision to make the game exclusive to another PC store.
The developer and publisher have assured us that all prior sales of the game on Steam will be fulfilled on Steam, and Steam owners will be able to access the game and any future updates or DLC through Steam.
We think the decision to remove the game is unfair to Steam customers, especially after a long pre-sale period. We apologise to Steam customers that were expecting it to be available for sale through the February 15th release date, but we were only recently informed of the decision and given limited time to let everyone know.”
What happened next was foreshadowing a coming trend: so-called “review bombing.”
3. In retaliation, people “review bombed” the previous games in the franchises that became Epic Games Store exclusives.
After “Metro Exodus,” Epic Games announced a string of other high-profile exclusive games coming to its PC store: “The Division 2,” “Borderlands 3,” and a variety of others.
Like the previous games in the “Metro” series, both “The Division” and “Borderlands” had previous games available on the Steam store – and they were the target of so-called “review bombs.”
Since the Steam store has a review function for users – whether they own a game or not – the system can be gamed. Steam users can attack a game’s review score in an effort to send a message to the game’s maker. And that’s exactly what they did with previous “Metro” games, as seen above.
4. The backlash to the Epic Games Store has stirred criticism of Epic’s relationship with Tencent, a major Chinese stakeholder.
Tencent is a major Chinese company, and it has several major investments in the video game market.
It’s the majority stakeholder in “League of Legends” studio Riot Games, and the majority stakeholder in “Clash of Clans” studio Supercell. It’s also an investor in Activision (“Call of Duty”) and Ubisoft (“Assassin’s Creed”), among others.
To put it mildly, Tencent is one of the biggest stakeholders in the video game industry.
In addition to all the previously mentioned companies, Tencent owns 40% of Epic Games. And thus, because Chinese company Tencent owns 40% of Epic Games, the Epic Games Store has been labelled “spyware” by some fans.
The most prominent post surfaced by Google accusing the Epic Games Store of spying on users is from Reddit. It alleges that Tencent “have very heavy ties to the Chinese government,” and ties that allegation to various technical processes carried out by the Epic Games Store application.
Epic Games CEO Tim Sweeney took to Twitter to respond directly.
5. Epic Games CEO Tim Sweeney denies allegations of spying through the Epic Games Store app.
“I support everyone’s right to complain about tech industry stuff,” Sweeney wrote on Twitter earlier this month. “Epic’s store, with exclusive games and a spartan feature set, is a fine target for ire. But please help separate facts and opinions from the lies about spyware and foreign control.”
Sweeney is the founder of Epic Games in addition to being CEO – he’s been with the company from day one, and is a well-respected video game industry veteran.
“I’m the controlling shareholder in Epic Games, and have been since 1991,” he wrote. “We have a number of outside investors now. Tencent is the largest. All of Epic’s investors our [sic] friends and partners. None can dictate decisions to Epic. None have access to Epic customer data.”
He noted his long relationship with Tencent CEO Pony Ma, going all the way back to the early 2000s, and he pointed to “recent anti-China rage” as the culprit for spyware allegations.
6. Why are people mad? And what’s next?
There are a variety of reasons that people are mad about the Epic Games Store, but the central reason is simple: By paying for exclusivity deals with big games, fans of those franchises are obligated to buy the game through the Epic Games Store.
It doesn’t cost anything to sign up for an Epic Games account, or to download the Epic Games Store application.
But it’s an entirely different ecosystem than Steam, with fewer features than Steam, and the only reason the game is there is because of business – Epic paid the game’s publisher for a window of exclusivity.
While it may be frustrating, it’s extremely unlikely to stop. Not only is Epic Games making more than enough money to keep paying for exclusives, but the move has been a major success: “Metro Exodus” sold 2.5 times the previous game in the series.
Business Insider Emails & Alerts
Site highlights each day to your inbox.