When Epic Games laid off 1,000 employees as part of a $500 million cost-saving effort last month, it came with a startling acknowledgment: Many new games and Fortnite updates had flopped.<\/p>\n
On April 16, the company will shut down Fortnite Ballistic mode, a faster-paced take on the popular shooting title, and Fortnite Festival Battle Stage, which added a musical component. Rocket Racing, where players compete in rocket-power cars, will go offline in October. <\/p>\n
\u201cDespite Fortnite remaining one of the most successful games in the world, we\u2019ve had challenges delivering consistent Fortnite magic with every season,\u201d Epic founder and Chief Executive Officer Tim Sweeney said in a blog post announcing the cuts.<\/p>\n
Other splashy new initiatives, including Epic\u2019s mobile store and an effort to allow users to create their own games, also didn\u2019t live up to internal expectations, according to eight current and former employees who spoke with Bloomberg. In chasing popular trends or business whims, Epic regularly released products before employees felt they would resonate with consumers, said the people, who asked not to be identified because they were not authorized to speak publicly. <\/p>\n
The company is pinning a resurgence on games it\u2019s been developing with Walt Disney Co., which agreed to invest $1.5 billion in Epic two years ago. Epic is on track to launch the first game in its new Disney partnership in November, according to four current and former employees. It will be a shooting game along the lines of Embark Studios\u2019 hit Arc Raiders, but with Disney characters battling enemies until they can reach an extraction point, according to the people. So far, internal reviewers have expressed concerns that the game mechanics are not very original, but some of the employees are optimistic that Epic will get it right by the launch date.<\/p>\n
The Disney deal will reap at least two more games, the people said. Early versions of the second title received middling internal reviews, according to two of the people. Resources for the third game were reallocated to the first two after reports that Disney was disappointed by Epic\u2019s release timeline.<\/p>\n
Liz Markman, the senior director of global communications at Epic, said Bloomberg\u2019s reporting is \u201cnot reflective of the ambitions of the Disney collaboration. We are building a new games and entertainment universe of Disney experiences.\u201d<\/p>\n
Markman said \u201cEpic\u2019s timelines are aggressive and always have been. We\u2019ve heavily moved developers onto projects with releases approaching, while smaller prototyping teams are working on further-off projects.\u201d<\/p>\n
A Disney spokesperson said \u201cwe remain focused on our long-term collaboration with Epic which continues to have strong momentum and our work to build a transformational games and entertainment universe remains unchanged.\u201d<\/p>\n
Epic laid off several employees working on the unannounced titles, spurring concerns from three former workers that people assigned to work on the Disney collaboration will be asked to adhere to an unrealistic schedule \u2013 part of a pattern that seven current and former employees believe may have contributed to challenges at the company. Epic routinely released products in what some employees called \u201cVersion 0.5,\u201d the people said, suggesting they were only half ready.<\/p>\n
Epic, based in Cary, North Carolina, is considered one of the most respected operators in video games. The closely held company launched an international sensation in 2017 when it published Fortnite, a shooting game where 100 contestants could compete at once in battle royale mode. Epic took just 10 weeks to develop the battle royale version of the game, working off of a previously released title. It went on to earn $9 billion in two years post-release. Investors lapped up shares in private offerings, giving the company a valuation as high as $32 billion in 2022. But since then the company has released a number of products that haven\u2019t lived up to expectations. <\/p>\n
\u201cEpic\u2019s ability to execute and iterate quickly has been a clear competitive advantage, especially in the context of network-based games like Fortnite, which relied on achieving critical mass early on,\u201d said Joost van Dreunen, chief executive officer of video-game analytics form Aldora. \u201cAs a platform company, however, its success is less obvious.\u201d<\/p>\n
Employees said the company\u2019s Epic Games Store fell into that category. The store launched in 2018 to compete with Valve Corp\u2019s dominant video-game marketplace Steam and prove Sweeney\u2019s belief that Valve\u2019s 30% cut of sales was excessive. (The Epic Games Store took just 12%.) Features like a shopping cart or user reviews didn\u2019t launch with the store, which inspired criticism from gamers. Eight years later, the store is just \u201cmarginally profitable,\u201d Steve Allison, who leads it, told the website Polygon. Users would frequently log onto the store for Epic\u2019s free game promotions before bouncing back to Steam, said two former employees with knowledge of store operations. Epic said it\u2019s reinvesting in and improving the store and looks forward to when it launches across all platforms.<\/p>\n
The mobile version of Epic\u2019s store, launched in 2024, suffered from a similarly condensed release timeline. Epic sued both Apple Inc. and Google, claiming monopolistic behavior in their app stores. After Epic won its suit against Google in 2023, Sweeney urged employees to begin development on its own mobile app store, according to two former employees. The product was developed in just seven months, according to the company. To meet the timeline, Epic invested millions of dollars in contractors, according to a former employee.<\/p>\n
Last year, the Epic Games Store attracted a record 78 million monthly active users on PCs, and player spending on non-Epic games reached $400 million, according to the company. That was \u201clower than our growth expectations at launch,\u201d according to Markman, but the company is \u201ccommitted to making improvements to the store and to the economic opportunity for developers to grow it further.\u201d The company\u2019s store for mobile users has 50 million installs, according to Epic \u2014 half of what the company had hoped to achieve by the end of 2024. Apple\u2019s \u201cscare screens and barriers\u201d made it \u201cintentionally hard for players to download an alternative app store in the [European Union],\u201d Markman said. Today, the store\u2019s scale is \u201cin line with our expectations,\u201d but expansion will depend on Apple and Google\u2019s mobile ecosystems opening up, she said.<\/p>\n
Epic\u2019s Unreal Editor for Fortnite initiative, which allows outsiders to create games within the Fortnite universe, has attracted 100,000 developers and is garnering 40% of the play time, also in line with company expectations, according to Markman. The product is still a long ways from competing with user-generated game platform Roblox, Bloomberg previously reported.<\/p>\n
Fortnite\u2019s challenges also came from rushed-out updates that didn\u2019t land with gamers. Its 2024 Ballistic mode, for example, was put out before many developers had a chance to craft deeper game mechanics that would keep players coming back, the people said. <\/p>\n
\u201cSome of the challenges we\u2019re facing are industry-wide challenges: slower growth, weaker spending, and tougher cost economics; current consoles selling less than last generation\u2019s; and games competing for time against other increasingly-engaging forms of entertainment,\u201d Sweeney said in his March blog post.<\/p>\n
In 2025, Epic announced it would let players recruit an AI recreation of the Star Wars villain Darth Vader into their Fortnite squads, but according to the people, it was developed on a condensed timeline and riddled with bugs after release. The AI didn\u2019t meaningfully increase Fortnite engagement, according to two of the people, and created \u201ctech debt\u201d for employees \u2013 a term describing the future cost of reworking a project that relied on shortcuts. Two developers said Epic routinely mass-deleted the company\u2019s backlog of bug reports despite them not being resolved. <\/p>\n
\u201cWe explicitly build ambitious things, ship quickly, and improve with time. Moving fast is the optimal tradeoff for the kinds of games we make nowadays,\u201d Epic\u2019s Markman said, adding that \u201cit\u2019s a different approach than Epic in the single-player eras of Unreal Tournament and Gears of War.\u201d Markman said the Vader project was fast-moving but denied that it was \u201crushed\u201d adding that \u201cit\u2019s an example of the first version of a tech feature that we pioneered internally and have since been polishing and will be opening up to Fortnite creators soon.\u201d It\u2019s normal to close low-priority and low-impact bug reports without fixing them, she said.<\/p>\n
Behind the ambitious timelines was Chief Operating Officer Dan Vogel, according to four current and former employees. Vogel, whose background is in engineering, is deeply involved in nearly every arm of the business, according to the people. Some employees were afraid to push back against his mandates for fear they would be publicly rebuked or yelled at \u2013 behavior three people reported witnessing regularly at meetings with him. Two people said he sometimes cursed at employees.<\/p>\n
\u201cThis is just not true,\u2019\u2019 Markman said. \u201cMeetings at Epic are directed at discussing and debating plans and ideas.\u201d While Vogel \u201cdrives our ambitious timelines,\u201d Bloomberg \u201cis conflating cursing for emphasis with cursing at people. The latter is not tolerated at Epic and is not behavior exhibited by Daniel Vogel.\u201d <\/p>\n
Vogel didn\u2019t respond to an emailed request for comment.<\/p>\n
Sweeney, who is also deeply involved in day-to-day operations, was known to change his priorities quickly, which sometimes left employees scrambling to deliver products on time, or in a polished state. \u201cEpic adjusts priorities frequently in response to learnings and market conditions. Tim Sweeney, as CEO, is the top executive responsible for priorities and their changes,\u201d Markman said.<\/p>\n
Epic\u2019s Disney collaboration, which was highly guarded from a large portion of employees, may help stabilize the company. So far, Disney has been pleased with Fortnite\u2019s ability to breathe new life into its properties, according a former Epic employee. Collaborations with Fortnite and the Epic Games Store have led to increased Disney+ subscriptions \u2013 significantly more than either company had predicted, according to an employee with knowledge of the numbers. Fortnite proved to be a successful marketing vehicle for the century-old entertainment firm.<\/p>\n
As part of the deal, content from Marvel, Star Wars, Avatar and Pixar properties will lure users into Fortnite, and funnel the game\u2019s young audience into the media properties. Disney\u2019s new CEO, Josh D\u2019Amaro, who spearheaded the deal at Disney, had just stepped into his new role when Epic\u2019s layoffs were announced. <\/p>\n
D\u2019Anastasio writes for Bloomberg. <\/p>\n","protected":false},"excerpt":{"rendered":"When Epic Games laid off 1,000 employees as part of a $500 million cost-saving effort last month, it…\n","protected":false},"author":2,"featured_media":377777,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[902,6636,1656,29414,9948,196848,70812,67628,5269,196849,111,139,69,384,9617,4460,2735,1742,145],"class_list":{"0":"post-377776","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-technology","8":"tag-bloomberg","9":"tag-challenge","10":"tag-company","11":"tag-developer","12":"tag-employee","13":"tag-epic-founder","14":"tag-epic-games","15":"tag-fortnite","16":"tag-game","17":"tag-liz-markman","18":"tag-new-zealand","19":"tag-newzealand","20":"tag-nz","21":"tag-people","22":"tag-player","23":"tag-product","24":"tag-store","25":"tag-sweeney","26":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/377776","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=377776"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/377776\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/377777"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=377776"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=377776"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=377776"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}