Epic's quest to see half the tech industry in court has has put its executives in the witness stand again. This time, the case is the Epic vs Google trial and the executive is Steve Allison, the general manager of the Epic Games Store, who testified yesterday (via The Verge) that the PC storefront continues to generate no profit for the company five years after its December 2018 launch.
Epic sued Google all the way back in 2020 in an attempt to get out of paying the 30% cut that the company takes from transactions on Android's Google Play Store apps (like Fortnite). The trial had its first day in court yesterday, and Allison took the stand in order to give the court a bit of detail about the Epic Games Store, particularly the 12% cut it usually levies on companies who sell their games there. Doesn't that make Google, Apple, and Valve look very greedy indeed?
That's certainly the message Epic hoped to get across, anyway, but amid a barrage of questions, Allison happened to mention that, five years on from the EGS' launch, the store still isn't turning a profit. Its goal is still growth, Allison told the court. No doubt the scads of cash Epic still makes from Fortnite and Unreal Engine licensing helps plug the hole in Epic's financials, but it's affirmation that, for better or worse, Valve still rules the PC game storefront roost in 2023. No wonder they all came crawlin' back to Steam.
To be clear, this isn't dire news for Epic. In fact, it's actually all according to the company's plan, at least outwardly. Two years ago—as part of Epic's court case against the other major mobile platform holder, Apple—we learnt that the Fortnite studio had poured half a billion into the Epic Games Store with no expectation of profit until 2027. We also learnt in 2021 that Epic had spent a full $1 billion on exclusives for the EGS, a practice which shows no sign of easing up.
So I guess Epic's plan to make no money from its game store is going off without a hitch, and my congratulations to the company for that. Still, even with expectations as low as those, I can't help but wonder how well the EGS is living up to Epic's hopes for it. When Allison reached out to former Epic boss Paul Meegan to talk about how excited he was to work on the EGS, he mentioned that "Fortnite blowing up definitely has created that potential Valve-Counterstrike moment."
In other words, Fortnite's popularity looked to Allison like it could be leveraged to vacuum up PC storefront market share much like Counter-Strike's popularity helped Valve do it around two decades ago. "Steam is pretty ripe for disruption," wrote Allison to Meegan, saying Epic could "take 20-30% paid digital PC market share… like nobody else can."
Epic claimed a 15% market share for the EGS last year, so maybe things are going just fine, but in my experience pretty much no one uses the client as their storefront of choice. It's an app you launch to grab a free game (that you likely won't ever play) before going back to Steam, and when its games are exclusive it's a source of minor irritation, like having most of your games on one shelf in your home but a few kept in other rooms arbitrarily. I mean, hey, people hated Steam at first too, so who knows what the future holds, but I don't see any sign of that "Valve-Counterstrike moment" in the months or years to come.
