Creator of one of the most popular Battle Royale games Fortnite, Epic Games has announced a 16% cut to their workforce or about 830 employees. The company is also closing down Bandcamp, its online music platform. This move is touted to further stabilize the profitability of the company.
Epic Games has been fined some hefty amount in the past on multiple occasions. It is currently fighting a legal battle against Apple over its 30% commissions on in-app payments. Many have speculated that this might also be one of the factors behind the lay-offs. The people that are laid-off however will receive six months of severance pay alongside health insurance, and accelerated stock vesting.
According to The Times of India, CEO Tim Sweeney in a statement said, “For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators. I had long been optimistic that we could power through this transition without lay-offs, but in retrospect I see that this was unrealistic.”
Furthermore, the company is also shifting to SuperAwesome, a technology developer. Epic Games acquired the company back in 2020 as an independent entity, with Kate O’Loughlin as the CEO. Notably, 250 further employees will be affected with his move.
Additionally, Sweeney also assured that these lay-offs will not impact the core workflow of the company in any way, as over two-thirds of people were not related to the main business line of development. However, a few projects may see some delay.
Entire video game industry experiencing slowdown
Not only Epic Games, but the entire video-gaming industry is also facing slowdowns due to numerous reasons. These include picky gamers due to unoptimized game releases, competition with other firms, and others to name a few.
Along with that, the companies have to keep up with new developers and studios releasing entertaining and genre defining games. All of this comes among many releases like Hogwarts Legacy, Elden Ring and Baldur’s Gate 3.
Most of the large companies like Epic Games have now shifted to live service mode to keep the revenue coming through in-game purchases due to their sheer size. This is because single-player games do not make sustainable profit due to picky gamers.