Since its launch in 2018, Epic Games Store has spent bucket loads of money on giving away free games, in order to attract PC gamers away from Steam.
Success has been hard to come by. In 2022, the retail store front hit 68 million monthly active users and a peak daily active user base of 34 million. The company says it’s targeting a relatively modest increase to 70 million MAUs as of the current quarter.
Part of Epic’s attraction is its range of popular first-party games such as Fortnite, Rocket League, and Fall Guys. But there’s little doubt that EGS has work to do, in order to get the most out of third party publishers and developers.
At the recent Unreal Fest, the company sought to persuade partners to throw in with EGS, with a range of programs and promotions that it says will maximize revenues, without harming lifetime sales on other platforms.
Kyle Billings, director of product and content strategy, laid out some of the company’s plans, while reassuring developers and publishers that “our commitment to the store is unwavering”. He said: “We succeed when our creators succeed. When creators can bring their ideas to life and successfully share their games with the world, that’s a win condition for us”
He added: “What really matters is the volume of players that are actively engaged in third party content. Currently, 67 percent of our player base is playing third party games, and 50 percent of them are exclusively playing third party games.”
Of course, as well as its genuinely attractive range of free games, Epic offers better margins to suppliers than Steam – roughly speaking, the retailer charges about 12 percent as opposed to 30 percent. It also offers promotional game launch programs that yield 100 percent of revenues to creators. However, Steam’s user base is likely at least double the size of Epic Games Store’s, with a significantly larger selection of games.
“Given economic headwinds facing the industry margin expansion and increased reach is a key component to success and the long term health of our partners,” said Billings. “In 2024, we have plans to level up both the partner and player experience.”
Earlier this year, Epic introduced a new suite of self-publishing tools that give vendors more control over how they price and market their games. “As we move into 2024, you can expect to see more features being rolled out,” said Billings, adding that additional margin benefits are avaiilable for developers who use the company’s Unreal Engine development tool.
In May, the retail portal introduced a new discount pricing management tool “that allows our partners to independently manage discounts” during promotional periods, most especially holiday sales. Epic Rewards was also released, through which players receive a five percent kickback on their spending, which they can use to buy other games, at Epic Games Store’s expense (as opposed to the vendor).
The retailer also tweaked basic services like discoverability, wish lists, search, and vendor merchandising, as well as upgrading its slightly creaking launcher, with significant improvements to launch times. A new download manager is coming early next year. Epic is also working on social features so that “our players know what their friends are playing”.
Epic First Run was first announced at Gamescom as “an optional exclusivity program for new release titles” with a six month exclusivity window in which partners gain 100 percent of net revenue “from all players spending on payments processed by Epic Games”.
“We want our partners to bring every PC title to the Epic Games Store,” said Billings. “By channeling all of your efforts into one storefront during your first six months of launch, you can maximize the margin of your launch, but then you can also take advantage of a subsequent release window on another third party PC platform.”
Billings said that “on average, the titles that manage to execute and do everything right [marketing their game] captured the majority of their first 24 months [forecast] revenue during their 12 month exclusivity window without damaging their lifetime sales performance.”
The retailer is keen to bolster its overall portfolio of games, while taking advantage of brand synergies through a program called ‘Now on Epic,’ which is essentially a lure to persuade vendors to bring their back catalog to EGS, offering benefits for those who either bring three older games to the store, or (if they have a smaller back catalog) offering their entire PC portfolio.
“Bringing your catalog over maximizes your presence and your exposure on the store,” said Billings. “Consumers aren’t left wondering if an older game is available, while back catalogs can be used as promotional tools for new games. Leverage your social channels, your own channels, amplify … and get your game in front of the widest audience possible”
Billings hinted that vendors are not necessarily prioritizing EGS when they enter the launch marketing phase for new games. He urged publishers and developers to focus on promoting games on the store well in advance of launch, as they generally do on Steam.
“Don’t have a store page up on another platform or storefront months ahead of time, and then throw your Epic Games Store store page up just days before [launch]. You really want to make sure that our players have the opportunity to discover and engage with your content,” he said. “Really make sure you launch your ‘Coming Soon’ page simultaneously with all other PC storefronts that you are going to bring your title.”
He added: “Our internal data – and some of the third party data sources we work with – highlights that if you get your store page up and actively promoted at least six weeks prior to launch, you typically generate eight and a half times more revenue than if you just effectively throw it over the wall.”
Another concern for Epic – which recently laid off hundreds of workers in an effort to cut costs – is branding on third party websites and other marketing assets. Billings said that generic PC branding is not as effective as retailer-specific logs.
“It’s essential to incorporate the Epic Games Store branding from all of your own channels,” he urged. “Please, please, please avoid the generic PC logo even if you’re just going to put our logo and other PC storefronts next to each other … so your community is fully informed on where they can find these games. If you’re directing players to the platform where you can capture the highest amount of net revenue and expand your margin, you make it a convenience for your audience to access and purchase your content directly.”
Billings said: “The bottom line is that we can’t succeed in our mission if you don’t succeed. Your active participation at the Epic Games Store is absolutely critical to long term success for both of us.”
You can see the full presentation here.