A little over a year ago, Epic Games laid off about 16 percent of its employees. The problem, Epic said, was its big ideas for the future and how expensive it was to build them. “For some time now, we've been spending far more money than we make,” Epic CEO Tim Sweeney wrote in an email to staff.
On stage at the Unreal Fest conference in Seattle on Tuesday, Sweeney declared that the company is now “financially sound.” The announcement kicked off a packed two-hour keynote with updates on Unreal Engine, the Unreal editor for fortniteEpic Games Store and more.
In an interview with The edgeSweeney says controlling Epic's spending was part of what got the company to this point. “Last year, before Unreal Fest, we were spending about a billion dollars a year more than we made,” Sweeney says. “Now we are spending a little more than we earn.”
“True power will come when we bring these two worlds together”
Sweeney says the company is also well prepared for the future and has the ability to make the types of long-term bets he described during the conference. “We have a very, very long way to go to compare our savings in the bank to our spending,” Sweeney says. “We have a very solid amount of funding compared to virtually any company in the industry and we are very sensibly making future investments that we could accelerate up or down as our fortunes change. “We feel like we are in a perfect position to execute the rest of this decade and achieve all of our plans at our size.”
Epic has ambitious plans. Right now, Epic offers Unreal Engine, its high-end game development tools, and Unreal Editor for fortnitewhich is designed to be easier to use. What is being sought is a new version of Unreal Engine that can unite them.
“The real power will come when we bring these two worlds together so that we have the full power of our high-end game engine fused with the ease of use we bring together in (Unreal Editor for fortnite),” says Sweeney. “That will take several years. And when that process is complete, it will be Unreal Engine 6.”
Unreal Engine 6 is intended to allow developers to “build an app once and then deploy it as a standalone game for any platform,” Sweeney says. Developers will be able to implement the work they do in fortnite or other games that “choose to use this technological base”, which would allow interoperable content.
The upcoming “persistent universe” that Epic is building with Disney is an example of this vision. “We announced that we are working with Disney to build a Disney ecosystem that is yours, but that fully interoperates with the fortnite ecosystem,” says Sweeney. “And what we are talking about with Unreal Engine 6 is the technological foundation that will make it possible for everyone. From Triple A game developers to indie game developers and fortnite creators who achieve the same kind of things.”
If you read my colleague Andrew Webster's interview with Sweeney from March 2023, the idea of interoperability to make the metaverse work will sound familiar. At this week's Unreal Fest, I got a better idea of how the mechanics could work with things like Unreal Engine 6 and the company's next release. Fabulous market to buy digital assets.
Fab will be able to host assets that can operate in minecraft either RobloxSweeney says. But the most important goal is to allow Fab creators to offer “a logical asset that has different file formats that work in different contexts.” He gave an example of how a user could purchase a forest mesh set that has different content optimized for Unreal Engine, Unity, Robloxand minecraft. “Having fluid movement of content from one place to another will be one of the critical things that will make the metaverse work without duplication.”
But for an interoperable metaverse to truly be possible, companies like Epic, Roblox, and Microsoft will need to find ways for players to move between those worlds rather than keeping them isolated, and for the most part, that's not on the horizon.
Sweeney says Epic hasn't had “those kinds of conversations” with anyone but Disney yet. “But we will do it over time,” he says. He described an ideal in which companies, working as peers, would use revenue sharing as a way to create incentives for merchandise stores where people want to buy digital products and “engagement sources” (such as fortnite experiences) that people want to spend time on.
“The thesis here is that gamers are gravitating toward games they can play with all their friends, and gamers are spending more on digital items in games they trust they'll play for a long time,” Sweeney says. “If you're just dabbling in a game, why would you spend money buying an item you'll never use again? “If we have an interoperable economy, that will increase players' confidence that their current spending on purchasing digital goods will result in things that they are going to own for a long period of time and that will work everywhere they go.”
“People are not dogmatic about where they play”
“There is no reason why we can't have a federated way of flowing between Roblox, minecraftand fortnite”says Epic Executive Vice President Saxs Persson. “From our perspective, that would be fantastic, because it keeps people together and allows the best ecosystem to win.” Epic sees in its surveys that “people are not dogmatic about where they play,” Persson says.
Of course, there are plenty of opportunities for Epic, which already creates a widely played game and a widely used game engine and is building fortnite into a game creation tool. (And I haven't even mentioned how Unreal Engine is increasingly used in the cinema and other industries.) Final State sounds great for Epic, but Epic also has to make the math make sense for everyone else.
And you have to do that. without a lot of presence on mobile. The company has spent years in legal battles with Apple and Google over their practices in mobile app stores, and it just sued Samsung as well. The Epic Games Store recently launched on Android globally and iOS in the EU, but thanks to restrictions on third-party app stores, says the company's game store boss, Steve Allison. The edge that reaching its installation goal by the end of the year is “probably impossible.” Any major changes could take quite some time, according to Sweeney. “It will be a long battle, and will likely result in a long series of battles, each advancing a set of freedoms, rather than having a single global moment of victory,” Sweeney says.
There's another battle Epic is fighting: fortnite It's still very popular, but there's waning interest, or at least hype, in the metaverse. Sweeney and Persson, however, don't exactly agree that the term is apparently losing popularity.
“It's like there's a metaverse climate,” Sweeney says. “Some days it's good, some days it's bad. It depends on who is talking about it.”
