Epic Games Downsizing Amid Unrealistic Metaverse Ambitions
Epic Games, the developer of Fortnite, has confirmed the downsizing of its workforce by approximately 16%, affecting nearly 830 employees worldwide. The announcement was made by CEO Tim Sweeney in response to the company’s financial instability, which has been exacerbated by the global transition to net zero hiring and the reduction of operating costs.
Sweeney admitted that the company’s expenditure far exceeded its earnings, making the layoffs necessary to achieve financial stability. He also acknowledged that their ambition to transform Fortnite into a metaverse-inspired ecosystem for creators was unrealistic. Despite Fortnite’s recent growth, driven primarily by creator content with significant revenue sharing, the lower margin business model has led to a major structural change in the company’s economics.
In addition to the layoffs, the sale of Bandcamp, which Epic Games had acquired just 18 months prior, was also announced. The platform was sold to music marketing company Songtradr for an undisclosed amount. This comes as part of Epic Games’ ongoing efforts to manage its finances amid ambitious metaverse-related developments, which have recently attracted $2 billion in funding.
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