by Quarrelsome
22 subcomments
- > "We're spending significantly more than we're making, and we have to make major cuts to keep the company funded," he said.
Sorry, HOW?!?
How can a company like Epic games with one of the most successful gaming products of the last few decades be losing money with a product that is so mature? Almost every other games developer would love to be in their position on Fortnite but they've somehow turned that into a loss making proposition?!? I'm baffled.
by ivraatiems
11 subcomments
- I am not Tim Sweeney's biggest fan. I know he and his company have many detractors. Please read this comment with that in mind, because while I don't love them, I also think that as layoff announcements go, this is good. No beating around the bush, explicitly NOT blaming AI, taking responsibility, taking care of those impacted. If you are gonna do it, this is as good as it can get.
I think the reality is that Epic got big because of Fortnite but nothing lasts forever. They would have been better off building a war chest and pulling a Valve (though I'm sure they'd hate hearing it that way): going silent and making whatever they wanted for a while, and then trying to repeat the cycle, rebuilding the chest, and then going on. Video games are the exact opposite of Infinite Growth Forever. People get bored and move on.
Meanwhile, Epic has many stable and valuable businesses - Unreal, the game store, etc. - which are perfectly capable of sustaining a sizable company. Just not one as sizable as Epic is. The best case for them is they figure that out, and manage to make a sustainable go of it doing that.
- Epic's 2019 P&L was published as part of Epic v. Apple. According to that:
* Fortnight revenue was $5.5B in 2018 and $3.8B in 2019
* Employee counts in those years: 1063 and 1932
* Average "People" cost per employee: $141K, $142K (CPI adjusted is $182K in 2026).
* Average "Production & Hosting" cost per employee: $189K, $150K (CPI $248K, $194K)
* Platform royalty expenses were 25% of total game revenue
* Slightly under half their Operating Expenses were people
* Fortnight was >90% of revenue
I have a strong guess that "People" costs doesn't include all salaries, and that many employees are categorized under "Production & Hosting", although I expect that also includes other costs. I'll guess 75% is people, which makes total CPI adjusted average cost per employee somewhere around $320K-$370K, but I'll say $320K.
This means 5000 employees cost around $1.6B and cutting 1000 saved around $320M/year in addition to $500M of other costs.
Most estimates of Fortnight revenue claim it's roughly flat or falling between 2020 and 2025 fluctuating between $3B and $6B.
Unless Unreal Engine or EGS revenue took off, it's kind of weird to quadruple headcount while keeping revenue basically flat or falling. If fortnight only makes $2B next year, then they would be underwater on just royalties and salaries.
https://s3.documentcloud.org/documents/20696836/epic-apple-t...
- Often when I see layoffs like this, I can't help but think "Wow that company has so many employees and yet, in practice, does so little". This perhaps a rather uncharitable sentiment, but I can't help but have it.
Yes, Unreal Engine keeps getting improved, more Fortnite content gets produced. But there is a general lack of innovation, one that I find personally painful when I look at Epic's recent-ish track record. Needing to fire this many employees is not just a result of market conditions, but also a straightforward consequence of not being able to leverage them for sufficiently lucrative outcomes.
Companies with this amount of capital are well positioned to take multiple strategic bets which aren't at all safe bets, but pose no real financial risk for the company in aggregate. Why do these bets end up being taken instead by indies with much more to lose? Well, partly because indies often _need_ to take riskier bets to carve a niche. But the other side of the coin is, what I can only surmise, a lack of imagination and adventurousness on the part of management. They could be funding many experiments and seek to have another hit like Fortnite, perhaps in a somewhat different market. Having to seek another hit while your finances are declining is less pleasant.
When a company loses its edge in this way, as long as it hasn't _really_ captured a demographic or created some very sticky ecosystem, it's bound to get whittled down repeatedly. I doubt that Epic will suddenly get more creative and adventurous at this point, but perhaps necessity will have its part to play.
(Aside from all of that, I agree with most commenters here that the layoff is being handled about as gracefully as one could reasonably hope.)
- I’ve wondered how much money was burned on Tim Sweeneys quixotic quest to re-create the Steam store. I know a lot of people who would religiously download the “free games” but never spent a cent.
by dgeiser13
1 subcomments
- Epic gave away 662 Million free games in 2025 alone. They pay the game devs for each copy they give away. They've been doing this for 8+ years.
https://insider-gaming.com/epic-games-store-give-away-662-mi...
In addition they've payed other game devs for Epic Game Store exclusivity so games would be available for 1 year before being released on Steam.
The whole company has been mismanaged into the side of a mountain.
by doughnutstracks
0 subcomment
- >The folks impacted by the layoffs will receive a severance package that includes at least four months of base pay, with more based on tenure. We’re also extending Epic-paid healthcare coverage.
>For example, in the U.S., they’ll receive paid coverage for 6 months. We’ll also accelerate their stock options vesting through January 2027 and extend equity exercise options for up to two years.
https://www.epicgames.com/site/en-US/news/todays-layoffs
- As far as layoff packages go, this is pretty good. 6 months health insurance and at least 4 months pay. The last 2 layoffs I experienced were just 1 week pay for every year you worked there and zero extended health benefits. And they made sure to note that they didn’t have to pay out anything at all, legally.
The wording of the announcement is better than the usual corporate non-speak too.
by rustyhancock
6 subcomments
- Quite stunned that Fortnites 5bn per year isn't enough to keep them going.
They've been pull about that much in per year since 2019 AFAIK.
I really hope this one have knock ons for Unreal Engine or lead to Unity like licensing. Their indie grants are also quite generous.
by abcde666777
2 subcomments
- A lot of folks wax sympathetic for the employees who've been laid off. But rare is the company which grows large and doesn't develop a lot of entropy in the process. Hiring beyond its needs, bloating, and mismanagement of resources.
Does the company owe a living to those people that it doesn't actually benefit from having on board? Sometimes it sounds like people think so.
by 4corners4sides
4 subcomments
- Roblox is the elephant in the room here which fills the niche for freemium, fun 3D experiences that run on basically any platform or device.
- Not long ago I was looking at my favorite games of decades past. Unreal Tournament figured very prominently, made of course by Epic. So I wondered: why did they stop making Unreal games? I looked at their game chronology. On one hand, they made Gears of War, an Xbox exclusive that never interested me. And the other one? Oh, right: Fortnite. That's where Unreal Tournament went. They made tons of money for sure. But no company, including Epic, has made a competitive FPS + CTF game as solid as UT, UT2003, or UT2004 since that era
- With the downturn in Fortnite (and with it the dream of Fortnite as a platform), and apparent failure of Meta Horizon (at least on the Quest) . . . does that mean the entire concept of a 3D metaverse type UI is dead for another generation?
by adrianhon
1 subcomments
- 1000 layoffs represents around 25% of Epic's total workforce.
by jeffreportmill1
5 subcomments
- The CEO is worth 7B+. 1000 employees at 100k/yr would cost him 100M - less than his net worth fluctuates on any given day and only 20% of other costs savings they have identified.
Executives care little about the stakeholders: the employees, the customers, the community. It's their company, too. They only care about investors and themselves. People who "own" pay a lower tax rate than those that "work". Let's fix that and make things great again.
- If you look at the technical state of Unreal Engine 5, then how modern GPUs can barely run games without frame generation which also makes them look blurry, then you are not surprised.
Its not just gamers but also developers who are fed up with the status quo of how games are done these days.
The big use case for UE moved from technical excellence to churning through people who can work on your game for hiring convenience, because you don't have to train them on an inhouse engine.
Its unhealthy to have this much fluctuation with hiring people, then if the game fails or succeeds (it doesn't matter), people are laid off anyway.
It is just mismanagement of the money they earned with fortnite, they failed to keep the momentum and stopped taking risks.
The technical incompetency doesn't stop with UE5, it shows in the store, which is laughably bad and inefficient since forever.
I think its good these people get a new chance to start working for companies who can put their skills and time to good use and value their expertise. Long term nobody working there would be happy with the way the software portfolio is moving downwards.
- Seems like Epic won the battle against Apple, but lost the war. My kids haven't played Fortnite since it was dropped from the Apple Store.
- There are (were) ~5,000 employees at Epic. That seems like a huge number for company that has produced little more than various flavors of Fortnite and a failure of a store in the last 10 years.
by MisterTea
2 subcomments
- There are three other submissions in the queue and likely more on this.
I know someone in Epic and they told me that its no secret inside Epic that Roblox is killing them. Why? He told me a story where a neighbors kid came by and wanted to play Roblox but he told the kid he didn't have Roblox. The child replied "It's easy! I'll show you!" and this 8 year old sat at his PC, downloaded a few MB client, signs in, selects a game and is playing within minutes. The game was a brain dead platform jumping game where you jump to the top of a tower. No enemies. No items. No anything. Just get to the top. Yay. At one point the kid fell down and the game offered to move him back to where he was for $3. Yup a fucking game hit a kid up for hard cash. The people who makes these games are child predators. Scum really.
Epics problem is Unreal can't be easily deployed like Roblox. You want to play Lego star-wars? You need to first download the base Lego game of 30GB then the 20GB Star Wars pack. A Roblox user just downloads a small client, signs in and is ready to play a stupid simple game that isn't 50+ GB. Unfortunately most of those games are not games but attention stealers that entice users to spend real money on NOTHING.
Shame that everything has been boiled down to an attention and money milking scam.
by wiseowise
1 subcomments
- Epic should learn from Valve. The only guy touching TF2 is a cleaning manager who dusts off serves once in a year.
by istillcantcode
0 subcomment
- Game is a little bloated and loads slow especially compared to Roblox. The other games are not as fun as the ones in Roblox either. Both have a lot of doo doo, but Roblox does have some neat indie gems. It reminds me of BYOND but in 3D. The launcher sucks, and there is nothing like Steam Input or RSS feeds for everything. I added steam RSS feeds for some games to my feed reader and I still use the client to check for updates for other games. There are a lot of small features that none of the other stores really have.
- Interesting how not many comments talk about the game itself and how Epic may have driven their own players away with changes that players dislike. I’ve played for most of the life of the game pretty regularly and I’ve found myself growing tired of “yet another season full of movie/TV crossover junk”. You can tell they’re focusing on pulling money in via partnerships, and not paying much attention to “is this what players want”. Unsurprising you’d see player numbers drop.
by CodingJeebus
1 subcomments
- > Today we’re laying off over 1000 Epic employees. I'm sorry we're here again. The downturn in Fortnite engagement that started in 2025 means we're spending significantly more than we're making, and we have to make major cuts to keep the company funded.
Layoffs really, really suck, but at least there's not a whiff of the "we're doubling down on AI to boost productivity" cop out that we're seeing across the industry.
It's sad that a company being honest about a difficult decision is praiseworthy these days, but here we are.
by vintermann
0 subcomment
- Is there any reason Fortnite should be a "forever game" like Minecraft or Roblox? I haven't played it since it's so Linux-hostile, but isn't it still just a battle royale game with a building element?
- 500M in savings seems like huge amount. Just how unstable is their income? And just what else have they been burning money on to look at that sort of cost saving goal.
by arealaccount
0 subcomment
- Wow and I thought the amount of money my son pays for skins alone would be more than enough to keep the entire company afloat
- Coupled with the recent price increase of V-Bucks, things do not look like they are shaping up well.
https://www.fortnite.com/news/fortnite-v-bucks-price-increas...
by LiamhCryptokeys
4 subcomments
- The Valve comparison is apt. The difference is Valve built Steam as infrastructure first, then quietly stepped back from games. Epic did it backwards — they built the game first, then tried to force the infrastructure (EGS) into existence with money. Much harder to do it that way.
by edwardsrobbie
0 subcomment
- This one is sad for me as a Fortnite player and someone who lives in the town where Epic Games is headquartered.
- Speaking personally, the move to unreal engine 5 ruined the feel of the game. Somehow it had a very unique and polished gameplay loop that was as addicting as CS and the unreal 5 launch changed it, at least for the hardware I was running
by OSaMaBiNLoGiN
1 subcomments
- "As the first-person shooter game Fortnite"
What? If the person writing the article is so unfamiliar with the subject they are writing about, they likely should not be writing about it.
- Would it be possible that they become less generous with unreal engine and its free tier ? Right now it's 5% beyond 1 million revenue, free before.
- Fortnite is 9 years old this year. Epic brought in biblical amounts of money from just this one property over this time. Where and how did they spend this money?
- 500 millions in savings? They seem to have been burning lot of money. And relying on single game seems to not be working.
Also I wonder if their low cut on EGS is doing part of these problems...
- Does anyone know if this is mainly going to affect people in Cary, NC?
by grandpoobah
0 subcomment
- Not a single comment mentioning UEFN? Epic's failed attempt at copying Roblox?
Epic has been pissing money away paying "creators" to churn out slop "red versus blue" modes/maps for Epic's meta-verse.
A lot of these maps are effectively hello world applications. Like the lowest of low quality. You add in a few weapon spawns, a few prefab buildings, and you're done. Time to get yourself a few thousand a month.
by OrionSubnet
0 subcomment
- Another case of reactive management leaving employees to bear the consequences of executive decisions. Forcing 16% job cuts despite years of financial warnings says a lot.
- And yet somehow the stats show that most likely 2026 is easily on track to be a bumper gaming year, surpassing 2025.
Revenue wise they might be down from the 6bn in 2025 to somewhere in the mid 5's, so might as well get rid of 1000 employees while handing out bigger bonuses to senior staff.
- Oh no, the poor shareholders
- constant growth for stockholders ruins all it touches
- It's a very straight forward letter without all of the usual fluff, which I appreciate. Bit it's concerning how much Epic still seems to be hanging their hat on Fortnite. Trends come and go and it seems unlikely to me that Fortnite will grow significantly in the future. It had its moment, they should be focusing on the next big thing.
by oh_fiddlesticks
0 subcomment
- > Fortnite "Usage"
I like this choice of word, it seems fitting.
- They have way too many employees for what they do.
- Since when do people refer to game playing as usage?
- Duplicate
https://news.ycombinator.com/item?id=47504996
- Its kind of a miracle that any working game gets made on unreal engine considering how buggy the editor is.
- For context, they recently increased the prices of the game's cosmetics significantly to, and I quote, "help pay the bills" [1].
Apparently, that wasn't enough, and the billions of dollars in revenue the game makes every year are simply too little to keep the lights on. So now they're laying off over a thousand people and cutting several official gamemodes, so they can continue paying hundreds of millions to the creators of AI slop modes like Steal the Brainrot [2].
It's becoming increasingly clear that Epic Games is a dysfunctional company that simply stumbled onto a golden goose by sheer luck, and now that the goose can't lay eggs any faster to keep the line going up, they're panicking.
[1] https://www.fortnite.com/news/fortnite-v-bucks-price-increas...
[2] https://www.fortnite.com/news/fortnite-developers-will-soon-...
- Epic was very lucky with Fortnite. Originally they showed the game at GDC as more of a mining, resource collection and building game. Frankly it looked boring.
Changing that to a shooter with the Battle Royale mechanic was a $10 billion win. They have managed it pretty well, but it seems they just over extended without innovating to attract and retain players.
- Imagine if they spent less time complaining about App Store and more time on increasing revenue?
by platevoltage
0 subcomment
- Imagine if Nintendo cut 20% of their workforce because a 9 year old game started to lose popularity.
- [dead]
by ChrisArchitect
0 subcomment
- Discussion on source: https://news.ycombinator.com/item?id=47503239
- [flagged]
by panelpowder
1 subcomments
- [flagged]
by BoredPositron
1 subcomments
- I hate that Tim got lucky two times with initiatives of employees that went against his will. I hope epic falters.
by HardwareLust
0 subcomment
- Fortnite usage fell? Maybe there's hope for humanity after all.
- Fortnite made more money than God during its prime years. Where did that money go?
Just to hazard a guess: the majority of this money went to investors and executives and now, when the pot is empty, the employees pay the price.
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