This. They've been burning money trying to give games away for free to entice people to their platform. It's quite possible they have a cash flow problem. That they just layed off 900 people definitely supports this idea.
I doubt it. Fortnite alone probably covers all of those free games and then some, it's an insane cash cow. Add to that Unreal Engine revenue and they're not hurting at all for money.
Layoffs just means they probably finished the bulk of UE5 dev and are seeing softening revenues with the COVID spike being over, so they don't have as much demand to get that and related projects done sooner. Amazon and other big tech firms have done similar layoffs, and it's not because they're losing money, but because they're seeing an end to the crazy growth in the gaming industry due to COVID-19 demand changes.
So no, I really don't think Epic is hurting for money, they're just cutting costs to improve margins now that revenue is likely falling.
Epic Games is a privately owned company, thus we don't know their financial state. We don't know which debts they have and what ventures they have undertaken over the last few years. They might have huge debts and Fortnite might not be enough.
Sure, it's possible, but I think unlikely. This sounds like the normal BS reasons companies give when their investors want better margins. I'm guessing Tencent isn't happy with profit margins and wants a better short term return for their stake.
But you're right, it's all speculation at this point.
Just because you make a lot of money doesn't mean you can't spend it even faster.
This. They've been burning money trying to give games away for free to entice people to their platform. It's quite possible they have a cash flow problem. That they just layed off 900 people definitely supports this idea.
I doubt it. Fortnite alone probably covers all of those free games and then some, it's an insane cash cow. Add to that Unreal Engine revenue and they're not hurting at all for money.
Layoffs just means they probably finished the bulk of UE5 dev and are seeing softening revenues with the COVID spike being over, so they don't have as much demand to get that and related projects done sooner. Amazon and other big tech firms have done similar layoffs, and it's not because they're losing money, but because they're seeing an end to the crazy growth in the gaming industry due to COVID-19 demand changes.
So no, I really don't think Epic is hurting for money, they're just cutting costs to improve margins now that revenue is likely falling.
Epic Games is a privately owned company, thus we don't know their financial state. We don't know which debts they have and what ventures they have undertaken over the last few years. They might have huge debts and Fortnite might not be enough.
Sure, it's possible, but I think unlikely. This sounds like the normal BS reasons companies give when their investors want better margins. I'm guessing Tencent isn't happy with profit margins and wants a better short term return for their stake.
But you're right, it's all speculation at this point.