Epic Games Layoffs and Bandcamp
Epic Games Inc., the maker of the popular Fortnite video game, is laying off 870 employees as it seeks to rein in costs.
As we shared earlier, we are laying off around 16% of Epic employees. We’re divesting Bandcamp [to Songtradr] and spinning off most of SuperAwesome.
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. I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.
While Fortnite is starting to grow again, the growth is driven primarily by creator content with significant revenue sharing, and this is a lower margin business than we had when Fortnite Battle Royale took off and began funding our expansion. Success with the creator ecosystem is a great achievement, but it means a major structural change to our economics.
Epic is privately-held, so it doesn’t have Wall Street analysts to answer to — but it went on a spending spree through 2021 and 2022, and the numbers evidently weren’t adding up. Bandcamp is still profitable, but that makes it just a particuarly saleable non-core business. Also dumped was SuperAwesome, a “youth marketing solutions” company, in an upper management buyout.
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Epic only bought Bandcamp eighteen months ago. Nobody could work out quite what Epic could do with Bandcamp. That seems to include Epic. It didn’t have synergy with game development or distribution.
Bandcamp is good, it’s profitable and sustainable and it basically works. Musicians love Bandcamp and depend on it. They worried at the Epic sale and now they wonder what the Songtradr sale means.
As for the fight against Apple, Sweeney claims that Epic Games is taking steps to cut down on legal expenses, but will continue on with its legal battles so the “metaverse can thrive and bring opportunity to Epic and all other developers.”
Previously:
Update (2023-10-10): Here are some links that I meant to post when Epic acquired Bandcamp:
- Bandcamp is Joining Epic Games
- Epic Games Acquires Bandcamp as ‘Fortnite’ Maker Expands Into Music (Hacker News)
To avoid Apple’s 30% surcharge on in-app purchases of digital goods, the Bandcamp app is limited to being a front-end for streaming music and purchasing physical products. Digital files are “not available for purchase on this device”, according to the app, with no explanation for how someone may go about acquiring them.
This is not the only hurdle. Even if you figure out that you must visit the album page through Safari and complete your purchase there, you cannot add the songs to your Music library on an iPhone or iPad. Those shortcomings really are a crappy customer experience; they sure make the iTunes Store or Apple Music look more compelling for a user.
I can see why Epic would want a non-gaming angle for its antitrust arguments, and I can see why Bandcamp would want the lawyers afforded to a larger company. It cannot be the only reason for this acquisition, but I bet Epic’s disagreement with Apple and Google is a rationale for buying Bandcamp. A subsidiary like Bandcamp will help strengthen Epic’s case.
Update (2023-10-27): Ash Parrish (Hacker News):
One of the worst tech labor years ever continues with the news that roughly half of Bandcamp employees have been laid off.
Emanuel Maiberg (Hacker News):
Bandcamp’s entire union bargaining team, the eight union members democratically elected by their peers to negotiate their first union contract, were laid off when Epic Games sold Bandcamp to music licensing company Songtradr on Monday.
Previously:
