Epic Video games, creator of battle royale shooter smash Fortnite and the Unreal Engine growth platform, is shedding roughly 16% of its workers, CEO Tim Sweeney confirmed in an e-mail republished as a weblog submit Thursday.
Roughly 830 workers are affected, with two-thirds of that quantity being in departments exterior of Epic’s core growth groups. Bloomberg first reported the information Thursday forward of the posting.
“For some time now, we have been spending far more cash than we earn,” Sweeney wrote. “I had lengthy been optimistic that we might energy by way of this transition with out layoffs, however on reflection I see that this was unrealistic.”
Sweeney shared that Epic had been funding Fortnite’s development within the creator economic system sector, however stated that its creator content material revenue-sharing mannequin has led to much less revenue to maintain Epic workers onboard.
“Success with the creator ecosystem is a good achievement, but it surely means a significant structural change to our economics,” Sweeney stated. “We concluded that layoffs are the one method.”
The writer has additionally stopped rising its headcount and decreased the quantity it spent on advertising and marketing and occasions, in line with the memo. It seems that subsequent week’s Unreal Fest 2023 occasion in New Orleans will proceed as deliberate, nevertheless. The agency says additionally it is nonetheless hiring, however will preserve the entire variety of workers at post-layoff ranges.
Epic Video games has additionally divested from music platform Bandcamp by way of a sale and will spin off “most of” creator advertising and marketing agency SuperAwesome, which signifies that about 250 workers from these companies gained’t be working underneath the Epic Video games umbrella anymore. An Epic Video games consultant clarified to Decrypt that these people should not included within the 830 folks laid off Thursday.
It has been a tough 12 months for a lot of recreation builders and publishers. Business giants like Riot Video games, Ubisoft, and Activision Blizzard have laid off workers this 12 months, whereas Romino Video games and Volition shut down as a consequence of monetary points final month.
Sega has canceled a number of deliberate video games as a consequence of financial losses, Sony studio Remaining Strike reportedly canceled a shooter recreation and laid off workers, and Unity has added a brand new controversial charge set to take impact subsequent 12 months—a transfer that raised additional monetary considerations amongst builders.
After on-line debate as as to if the video video games trade is likely to be “recession-proof,” it seems that nobody—not even a $31.5 billion-dollar studio like Epic Video games—is resistant to the influence of a broader trade downturn.
Editor’s notice: This text was up to date after publication with clarification from Epic Video games on the layoff figures.