Good day everyone,

I hope you are all well and having excellent day, welcome to CryptoGod-1’s blog on all things crypto. In this post I shall be looking at the recent news emerging from Epic Games, who are to reduce their workforce by 16% thanks to unrealistic Metaverse revenue projections.

Epic Games Layoffs

The creator of Battle Royale Smash and Fortnite, Epic Games, have announced they are cutting approximately 830 staff or 16% of the companies workforce. This comes as they look to reduce costs to create a viable financial ecosystem for the company. This was confirmed by company CEO, Tim Sweeney, in a memo and later a blog post. He noted that due to overspending and their unrealistic expectations from metaverse-inspired revenue the company needed to rethink its strategy.

“For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators.” 

Sweeney went on to state that Epic and the Unreal Engine development platform have been implementing cost-saving measures in areas such as marketing and events. However, at this stage they have decided those efforts are not enough, and layoffs were the only action left to ensure they chieve financial stability.

“I had long been optimistic that we could power through this transition without layoffs, but in retrospect, I see that this was unrealistic.”

It was also pointed out by Sweeney that Epic has ventured into the creator economy sector. This basically means that players will be able to create and sell their own in-game content while retaining a 40% share of the revenue. The move has contributed significantly to the company's recent expansion but it has also narrowed the profit margins. This has therefore impacted Epic's ability to maintain its existing workforce, and there the lower earnings from the creator content revenue-sharing model are another factor in its staffing cuts.

“Success with the creator ecosystem is a great achievement, but it means a major structural change to our economics,” Sweeney said. “We concluded that layoffs are the only way."

It has been a challenging year for the gaming industry, as a number of major developers and publishers, including Epic Games, have been making staff reductions. Companies such as Riot Games, Ubisoft, and Activision Blizzard have previously endured layoffs, with smaller studios such as Romino Games and Volition shutting down due to financial difficulties. Both BioWare and Firaxis Games have also required layoffs in what they cited as streamlining operations.

Epic currently has about 40 offices worldwide, and as a result of the recent sales of Bandcamp and SuperAwesome the layoffs have been required. The company is offering six months of upfront salary to impacted employees, along with paid healthcare coverage for employees residing in the United States, Canada, and Brazil.

Have a great day.

Peace. CryptoGod-1.

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