Epic Games is in more financial trouble than first realised, as another round of layoffs takes place at Telltale Games.
Sometimes you have to wonder whether the people in charge of the video games industry actually know what they’re doing. Although, the usual PR blunders and scheduling failures are nothing compared to running out of money while simultaneously owning the most popular game in the world and the most widely used graphics engine.
That’s exactly the situation Epic Games finds themselves in, as CEO Tim Sweeney has admitted that the company began to experience ‘financial problems’ about 10 weeks ago – although exactly what the issue is still isn’t clear.
Sweeney commented on how the company has been ‘heavily funded by Fortnite’ over the last six years but it seems it’s no longer bringing in the money it used to and that’s caused immediate problems.
You would’ve thought Epic Games had managed to store up a significant nest egg over the last half decade, but the immediate, and very desperate sounding, response to the problem was to raise the price of the V-Bucks in-game currency and sack nearly a thousand people.
According to Sweeney, different parts of the business have become ‘disconnected’ from their revenue streams. Although, again, it’s not really clear what that means.
It’s also not certain what Sweeney considers ‘financial problems’. Are Epic’s coffers really empty or are they just making slightly less money than last year? For some financial execs both situations are considered equally bad, even though they’re clearly not.
All of this has fed into Epic Games’ decision last week to let go around 900 of its employees; something that’s become worryingly commonplace across the games industry as of late.
However, game developers can breathe a sigh of relief as they are exempt from the Unreal Engine price hike. It only applies to everyone else, be they based in film, TV, or other such industries (it’s used a lot now for special effects in shows like The Mandalorian).
This new per-seat licensing fee will come into effect next year and while exact pricing details aren’t known, Sweeney promises the new model won’t be ‘unusually expensive or unusually inexpensive’ and work similarly to the subscription services used for the likes of Photoshop and Maya.
And just to add to the misery that seems to have gripped the Western games industry recently, Telltale Games has confirmed that it is making a number of team members redundant, due to ‘current market conditions.’
It insists that none of its projects have been cancelled – including the long-delayed The Wolf Among Us 2 – but while layoffs are never a good thing, it’s an especially bad look for Telltale, after it pledged not to repeat the same mistakes that led to most of its workforce being made redundant in 2018, followed by its closure.
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