Video Game Distribution Platforms: Epic Games Store

Today, in our series on video game distribution platforms, 1D3 bizdev Skelius Mortalis explores the Epic Games Store. We'll delve into its user base, commission structure, and additional features. Stay tuned for more insights!

Epic Games Store: User Base

According to publicly available data, the Epic Games Store (EGS) is recognised as the second-largest video game distribution platform on PC and boasts about 26-34 million daily active users. 

While this number is impressive, most users primarily engage with a single game: Fortnite. Although the exact distribution of players across different games on EGS is unknown, some sources estimate that Fortnite's daily active users on PC range from 2 to 12 million during peak times. This suggests that most EGS users login to play Fortnite or collect free games. 

Consequently, the Epic Games Store still has a long way to go before it can be considered a primary distribution platform for the broader PC gaming audience.

Epic Games Store: Platform Fees

Epic Games Store (EGS) offers a developer-friendly fee structure with no registration fee and a base commission of 12% on video game sales and in-game purchases. This commission covers payment processing and sales tax management (though it does not cover the tax payments themselves).

In a typical distribution scenario, the breakdown is as follows:

• Developers receive 68% of the game's revenue.
• Epic takes a 12% commission.
• Around 20% goes toward sales tax.

Additionally, EGS offers the First Run Program, where developers can receive 100% of their revenue for the first six months after launching on the platform.

Developers also have the option to use third-party payment processing and merchant of record services for in-game transactions (MTXs) instead of Epic's infrastructure. These third-party services charge about 3-10%, which can benefit live service games. In this setup, developers can bring their revenue share up to 75% (accounting for 20% sales tax, 3% tax management, and 2% payment processing).

For those who qualify for the First Run Program, the potential revenue share is even higher during the initial six months, as they only need to manage and pay the sales tax.

Epic Games Store: Features 

In addition to its developer-friendly revenue share model, Epic Games is well-known for its Unreal Engine, exclusivity deals, and mobile app store ambitions, which have led to ongoing legal battles with Apple.

Unreal Engine is one of the industry's most impressive and long-standing video game engines. It typically comes with a 5% royalty fee, which is waived if the game is distributed via EGS.

While EGS is a PC-only platform, Epic has expressed clear ambitions for a mobile app store. In its ongoing legal battle with Apple, Epic plans to launch a mobile version of the store with the same 12% commission structure. This move could potentially revolutionise the mobile game distribution market, currently dominated by Apple and Google stores, which charge 30% commissions.

Unlike Steam, Epic actively engages in exclusivity deals. If your game is selected, Epic acts as a publisher, providing a sizable upfront payment and guaranteed revenue. The specific terms of these deals are negotiated privately and are not disclosed to the public. Typically, these exclusivity agreements are timed, lasting for about six months, after which the game is free to expand to other platforms.

Conclusion

Epic Games Store offers great deals for developers, but it relies heavily on Fortnite, exclusive games, and free giveaways to attract players. Many gamers dislike the exclusives and only log in to get free games without planning to spend money on the platform.

The 12% commission rate and special rates for live service games are appealing, but they come with a smaller potential player base. Epic Games Store works well as a secondary platform, especially for exclusive titles. If the store expands into the mobile app market, it could revolutionise mobile video game distribution platforms and introduce healthy competition to current leaders like Apple's and Google's app stores.