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Koby

Here’s what Epic Games Store paid for those ‘free’ games

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If you’ve ever wondered what it actually costs when one of these big video game services are giving away “free” games, well, the bill for the Epic Games Store was $11.6 million for the first 10 months of its existence.

 

The information came to light on Monday as part of Epic Games’ lawsuit vs. Apple Computer. Writer and video game historian Simon Carless said a spreadsheet showing 38 titles, given away between December 2018 and September 2019, was “accidentally published early” as part of a trove of lawsuit documents and exhibits.

 

 

The giveaways released during that period reveal interesting data points about how much Epic Games paid for the privilege to hand out free games in an effort to lure in new users. The first game released as part of that promotional push, Subnautica, proved to be one of the store’s most popular, with 4.6 million entitlements, netting Epic more than 800,000 new accounts. Subnautica was also one of the most expensive buyouts for Epic at $1.4 million. That worked out to a cost of $1.74 per new Epic account, which would appear to be a solid return on Epic’s investment here.

 

Other games, like Super Meat Boy, Rime, For Honor, World of Goo, and the Jackbox Party Pack, earned Epic new users for about 50 cents each — in part because Epic paid far less (between $45,000 and $63,000) for those older titles than it paid for games like Subnautica, Mutant Year Zero ($1 million), or the Batman Arkham series ($1.5 million).

 

Metro: 2033 Redux is listed as costing Epic zero dollars to buyout, but that apparent anomaly seems to be a result of Metro Exodus’ Epic Games Store one-year exclusivity in 2019.

 

More interesting than the amount of money Epic threw around for these freebies, though, is the "UA Cost" column (aka user acquisition), which is the buyout price divided by the number of new Epic Store accounts that each game attracted. That metric, indie developer Rami Ismail said on Twitter, demonstrates that indie games are a very big part of attracting audiences: Big releases like the Arkham games draw huge raw numbers, but games like Oxenfree, Hyper Light Drifter, Super Meat Boy, and Fez add up—and at a fraction of the cost, too.

 

In spite of all that expense and the number of users who have created accounts in exchange for free games, the actual impact of the regular givaways seems relatively minimal. The document indicates that only about 7% of EGS users who have acquired at least one free game have also made a purchase through the storefront, which does not strike me as a very impressive conversion rate.

 

The numbers only go to mid-2019, which mean the doc doesn't tell us how much Epic spent for some of 2020's high profile giveaways, like Grand Theft Auto 5, and whether Epic's UA costs started to climb noticeably over time. If the chief goal is to attract new users, diminishing returns means it's going to become increasingly difficult to do so—and, you'd have to think, too costly to continue doing so at some point. 

 

Regardless of how it decides to proceed with weekly giveaways in future years, there's still a long way to go before the Epic Games Store stops burning money: CEO Tim Sweeney acknowledged in April that the Epic Store isn't currently profitable because "it has front-loaded its marketing and user acquisition costs to gain market share." He doesn't expect it to start making money until 2027.

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