When Epic Games laid off 1,000 employees as part of a $500 million cost-saving effort last month, it came with a startling acknowledgment: Many new games and Fortnite updates had flopped.
Other splashy new initiatives, including Epic’s mobile store and an effort to allow users to create their own games, also didn’t live up to internal expectations, according to eight current and former employees who spoke with Bloomberg. In chasing popular trends or business whims, Epic regularly released products before employees felt they would resonate with consumers, said the people, who asked not to be identified because they were not authorized to speak publicly.
The company is pinning a resurgence on games it’s been developing with Walt Disney Co., which agreed to invest $1.5 billion in Epic two years ago. Epic is on track to launch the first game in its new Disney partnership in November, according to four current and former employees. It will be a shooting game along the lines of Embark Studios’ hit Arc Raiders, but with Disney characters battling enemies until they can reach an extraction point, according to the people. So far, internal reviewers have expressed concerns that the game mechanics are not very original, but some of the employees are optimistic that Epic will get it right by the launch date.
The Disney deal will reap at least two more games, the people said. Early versions of the second title received middling internal reviews, according to two of the people. Resources for the third game were reallocated to the first two after reports that Disney was disappointed by Epic’s release timeline.
Last year, the Epic Games Store attracted a record 78 million monthly active users on PCs, and player spending on non-Epic games reached $400 million, according to the company. That was "lower than our growth expectations at launch," according to Markman, but the company is "committed to making improvements to the store and to the economic opportunity for developers to grow it further." The company's store for mobile users has 50 million installs, according to Epic — half of what the company had hoped to achieve by the end of 2024. Apple's "scare screens and barriers" made it "intentionally hard for players to download an alternative app store in the [European Union]," Markman said. Today, the store's scale is "in line with our expectations," but expansion will depend on Apple and Google's mobile ecosystems opening up, she said.