It’s been a tough few weeks for game engine makers, Epic games fires almost 900 people in a bid to “reach financial sustainability”.
In an internal email to employees on Thursday, Epic CEO Tim Sweeney informed employees about the layoffs saying:
“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 layoffs, but in retrospect I see that this was unrealistic.”
This comes as a surprise to many as Epic has seemingly become the industry darling the last few years due in large part to the revolutionary technological advancements made in Unreal Engine 5 with technologies such as Nanite and Lumen allowing game makers to create far more detailed and well rendered worlds for their games without a significant increase in development time and effort. Similarly Epic’s hit free-to-play live service game Fortnite took the world by storm in 2017, and it’s been widely assumed that it was a cash cow that just kept on giving for Epic, now if Tim Sweeney is to be believed it seems that might’ve been greatly overestimated.
It would also seem that Epic’s attempt to build Fortnite as a mateverse- adjacent ecosystem “for creators” and has to take part of the blame for the company not being profitable, something that seems to be confirmed in the next quote from Mr Sweeny as he continues:
“About two-thirds of the layoffs were in teams outside of the core development, some of our products and initiatives will land on schedule, and some may not ship when planned because they are under-resourced for the time being. We’re OK with the schedule tradeoff if it means holding on to our ability to achieve our goals, get to the other side of profitability and become a leading metaverse company.”
Sweeny remains vague about exactly where the layoffs will hit, but it does sounds like for now the Unreal Engine team is mostly safe, which would make sense given the amount of good press and presumably increased profitability that side of the business has seen lately.
At the same time Epic also just announced that it is increasing the price of Fortnite’s in-game currency “V-Bucks” in most major markets, though this isn’t a major increase it’s no doubt going to help Epic weather this “storm” while it seeks cost saving ways of becoming sustainable. See the new prices below:
- 1,000 V-bucks pack now cost $8.99 (up $1)
- 2,800 V-bucks pack now cost $22.99 (up $3)
- 5,000 V-bucks pack now cost $36.99 (up $5)
- 13,500 V-bucks pack now cost $49.99 (up $10)
Once again special thanks to Jason Schreier of Bloomberg for initially breaking the story earlier today. I will keep you updated here if anything further develops.
