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Epic is now offering 100% of the revenue to exclusive games for the first 6 months, up from 88%
(store.epicgames.com)
this post was submitted on 23 Aug 2023
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My experience of Epic exclusives is that most become things that are never on my radar again, even after the exclusive period.
I take it from this increase in rates that I’m far from alone in that regard.
All signs point to that program being a failure for them, which is why the exclusivity offers and announcements started drying up, but I guess this is them trying a revised strategy.
Not a failure at all. Operating at a loss for years to start up is not uncommon, and this was the case for Amazon, Netflix, Uber, Spotify and many others. Eventually they have to wind down their investments as they move towards breaking even and becoming profitable. In 2019, Epic had a specific roadmap on dropping the aggressive pursuit of exclusives and estimated that it would take them 5 years to reach profitability.
Your examples of companies operating at a loss for years are all examples of the hockey stick graph of exponential, self-sustaining growth, but I don't see any indication that that's happening for Epic. Anecdotally, do you know anyone who's stuck with EGS over other options without Epic's thumb staying on the scales (exclusives, freebies, or discount coupons where Epic eats the cost)? Because I know I don't. And their own infographics that they can cherry-pick to make them look as good as possible don't back up exponential growth either.
Epic tends to have better regional prices and supports more currencies than Steam, so I do know of people who go for it just by virtue of this. Also, I wouldn't completely disregard the freebies, because some of them probably cost them nothing, like the offers of Fortnite items for buying games like Assassin's Creed Valhalla. The Ubisoft games on Epic are activated on Ubisoft Connect and do not require Epic, so in that case there's no downside even to those who dislike the launcher.
I would guess they were assuming the failure is that it's not attracting customers. Nothing wrong with operating at a loss, but you need something to show for it (en excelent product, a healthily growing userbase) -- it's hard to imagine EGS ticking any box with the exclusivity deals they've been getting. Personally I can't recall a single exclusive that they have, other than Fortnite and Ubisoft (which seems to have ended).
Going by their annual reports, the total revenue from third-party sales increased every year. That being the case even past the decrease in exclusive offers may suggest that their winding down strategy is working.