Epic Games, the publisher of the popular video game Fortnite, started to talk up its connections with creators a few years ago, most notably during its 2021 antitrust trial against Apple. At the time, Epic CEO Tim Sweeney argued that Apple’s App Store policies were squeezing the kind of small developers that make content for Fortnite. Epic’s program, which pays creators 40% of the revenue from sales of their content in the game, has come back to bite the company.
The privately owned company is laying off 16% of its staff, or more than 800 employees, as it tries to cut costs. In an email to employees on Thursday, which Sweeney published to Epic’s website, the CEO said that the company’s growth had been driven by its Fortnite Creator Program. But it was “a lower margin business” than Fortnite Battle Royale, the online multiplayer game that became a blockbuster before the pandemic. As Epic Games’ business shifted more towards creator-driven content, it “ended up far short of financial sustainability,” Sweeney said. “Success with the creator ecosystem is a great achievement, but it means a major structural change to our economics.”
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