Epic losing hundreds of millions of dollars with free games; CEO defends his strategy

CARY – Epic Games is losing hundreds of millions of dollars by offering free games through its online store but CEO and founder Tim Sweeney defends the strategy, saying the move is helping grow its global business.

“Apple spins this as ‘losing money,’ but spending now in order to build a great, profitable business in the future is exactly what investment is! It’s equally true whether you’re building a factory, a store, or a game,” Sweeney said in a tweet over the weekend.

Citing court documents made available through the Epic-Apple antitrust lawsuit that is scheduled for trial in federal court beginning April 3, game enws site IGN reported that “Epic is set to lose at least $330 million in its battle to gain market share from Steam, mainly due to it offering exclusive games and free titles on its Epic Games Store.”

Sweeney responded:

“That’s right! And it has proven to be a fantastic success in reaching gamers with great games and a fantastic investment into growing the business!”

A report in the Verge estimates that Epic, which is privately held, has given away games worth more than $17 billion at retail prices.

Epic, which reportedly is raising new capital and is valued at some $20 billion, is suing Apple as well as Google for banning its Fortnite game-related sales from their app stores, saying 30% fees are too high.

Epic also has partnered with a wide variety of game developers to make titles available through its own store. Many are given away at launch.

Tweeny recently explained that publishers were not paid per copy but on a bulk basis, thus driving down costs. But the losses have been considerable.

According to statistics Sweeny published via Twitter, Epic’s game stor has generated more than 160 million customers.

The stats: