Three reasons why Epic Games could give away $ 17.5 Billion Worth of Games for Free

The Epic Games Store once gives out free games every week - often good ones - and yet the company has never explained how it managed to give out 749 million copies without going bankrupt. still. New documents released as part of the legal discovery process for Epic's major antitrust lawsuit against Apple were published last week, and between them and a series of tweets from Epic CEO Tim Sweeney, we get our best look yet at how the company hasn't quite thrown billions of dollars away.

According to Apple's document "Proposed fact Conclusions" (credit to Eurogamer for tainting some of this over the weekend), Epic Games loses cash - hundreds of millions of dollars in "minimum guarantees" it pays many developers to give away their games and constantly offer new ones to keep players coming back. This money also covers Epic's infamous exclusivity deals, so it's not clear how much goes into free games alone.

Either way, that's a significant chunk of the billion dollars that Epic is losing here: $ 330 million, it seems. "Epic has committed to providing $444 million in minimum guarantees for 2020 alone," Apple said in its legal complaint. "This includes at least $ 330 million in uncouth expenses from minimum guarantees alone." But both of these numbers are much, much less than the retail value of these games: $ 17.5 billion if you do the math based on Epic CEO Tim Sweeney's chart below.

How does he pay only a fraction of a billion for both exclusives and freebies, when the freebies alone should be worth many billions? Sweeney revealed on April 10 that Epic doesn't actually pay a fee for the game at all, much less the full amount: "Our free game giveaways are negotiated with the developers, where we pay them the agreed amount in dollars, not for a copy."

As you can see in Sweeney's other tweet above, Epic doesn't expect to make that money back: the studio intentionally set aside that huge, nearly half-billion-dollar pile of cash to entice developers, and the company thinks it's working just fine. Sweeney publicly stated his support for this spending on Twitter over the weekend: "The Epic Games Store has proven to be a fantastic success in reaching gamers with great games and a fantastic investment in business growth!»

In theory, a steady stream of new games could keep more players using the Epic Games Store and, eventually, maybe even spend their own money on games there. The company claims it has already seen that confirmed in-store rapid growth, saying that players have spent more than $ 700 million in the store, with $ 265 million that is spent on games not made by Epic.

While we don't know exactly how much Fortnite made for Epic, it's almost certainly a lot of money: Epic made more than $ 700 million on iOS in just two years, according to an Apple filing.

And while the game is no longer available on iOS due to the ongoing Apple-Epic feud, Fortnite is still on many other platforms, and it seems a safe bet that it's still raking in a lot of cash everywhere, yielding Epic revenue as it gives away games on the Epic Games Store.

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