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Epic Games to Lay Off 16% of Workforce as Fortnite Revenue Declines

Epic Games, the developer and publisher of popular games Fortnite and Unreal Engine, is reportedly planning to terminate around 900 jobs, which accounts for about 16% of its workforce. Despite Fortnite's massive popularity, concerns about declining revenue have prompted this decision. In an email to employees, CEO Tim Sweeney revealed that the company has been spending more money than it earns for some time now. Profit margins from Fortnite Creator are also not as high as they used to be.

Interestingly, this news comes at a time when Unreal Engine appears to be more widely used than ever before. Although Fortnite may not be at its peak, it is still a highly popular game. However, the exact financial implications of maintaining this level of popularity are known only to Epic Games.

In addition to the layoffs, Epic Games is also divesting two of its previous acquisitions, Bandcamp and SuperAwesome. The employees affected by the job cuts will receive a six-month severance payment and health benefits.

To bolster the company's funds, Epic Games announced that the price of V-Bucks, the in-game currency for Fortnite, will be increased starting from October 27. For example, the price of 1000 V-Bucks will go from $7.99 to $8.99. The price changes will affect players in several countries, including the United States and Eurozone countries. Similar price increases were already implemented earlier this year in the UK, Canada, and Mexico.

Overall, these developments highlight the challenges that even successful gaming companies face in maintaining consistent revenue streams. However, Epic Games remains optimistic about its future prospects and is still actively hiring despite the layoffs.

Sources:
– Bloomberg