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This week, Epic Games announced 1 of the largest rounds of layoffs the video games manufacture has ever faced, with much than 1,000 unit told they were retired of enactment successful 1 devastating morning. Fans of Fortnite, which remains 1 of the biggest games successful the world, were blindsided by the news. But nary 1 was much shocked than the employees themselves — immoderate of whom had dedicated a decennary of their lives to Epic and Fortnite, and established the breakout conflict royale arsenic a planetary phenomenon.
Days later, the standard of the layoffs is inactive sinking in. Alongside the galore seasoned developers present looking for enactment via societal media, those who stay person said they simply don't cognize however Fortnite volition look aboriginal this twelvemonth and beyond with astir a 4th of the company's staff, including respective cardinal figures, nary longer present.
But portion there's nary mistaking the genuinely stunning scope of Epic Games' decision, analysts person said that immoderate signifier of cost-reduction — apt layoffs — was inevitable. Announcing the quality this week, Epic Games brag Tim Sweeney blamed rising improvement costs and a downturn successful subordinate involvement successful Fortnite done 2025. But, speaking to IGN, analysts accidental there's a broader representation present of a institution present paying the terms for its lengthy and costly bets that it tin proceed to upend the video crippled industry.
"Since precocious 2017, Epic has mostly relied connected the occurrence of Fortnite to grow its concern and heavy put successful merchandise development," Piers Harding-Rolls, seasoned games manufacture expert astatine Ampere Analysis told IGN. "While the instauration of imaginable aboriginal maturation has been laid done its level and storefront strategy, a driblet successful engagement for Fortnite successful 2025 has meant an contiguous request to chopped costs erstwhile again pursuing layoffs successful 2023. This brings its workforce down to person to 3,000 employees, adjacent to its size successful 2020 astatine the commencement of the pandemic."
Three years ago, Epic Games went done a likewise large-scale layoff, ditching 830 unit and divesting others arsenic the games manufacture emerged from its Covid lockdown-era boom. Two months later, Fortnite hosted its "Big Bang" unrecorded event, the game's effort to transportation itself arsenic a multi-genre acquisition that featured Epic-developed racing, euphony and endurance crippled modes without guns. Fortnite's subordinate number spiked, but the effect was temporary.
Fortnite's fortunes person ever been cyclical, with immoderate conflict royale seasons landing amended than others, and an yearly bump successful subordinate numbers each autumn arsenic a caller conflict royale Chapter arrives. But 2025 felt a peculiarly dilatory twelvemonth for the game, thing reflected successful publicly-available idiosyncratic data. As involvement successful the game's OG mode slowed and its non-shooter portions were sidelined, Fortnite's main conflict royale spent its summertime months hosting an unpopular alien bug season. It was unfortunate timing, too, conscionable arsenic the popularity of rival metaverse crippled Roblox went stratospheric, arsenic mini-games specified arsenic Grow a Garden and Steal the Brainrot became bigger than Fortnite's conflict royale mode connected their own.
"Fortnite’s caller seasonal updates astatine the extremity of 2025 person not had arsenic large an interaction arsenic updates astatine the extremity of 2023 and 2024," Harding-Rolls agreed. "The OG representation instrumentality had a large interaction astatine the extremity of 2023 seeing MAUs [monthly progressive users] crossed PlayStation and Xbox summation by 51% month-on-month pursuing the release, but Chapter 2 OG saw diminishing returns with a 15% MAU summation month-on-month, and the precocious 2025 updates saw highest MAUs astatine 14% little than astatine the extremity of 2024.
"Since its precocious successful 2023, Fortnite’s yearly highest MAUs crossed PlayStation and Xbox person decreased by 28%," helium continued. "Engagement has besides steadily fallen, dropping from an mean monthly playtime successful December 2023 of implicit 29 hours, to 15.4 hours successful 2025. Meanwhile engagement connected intimately competitory titles person started to transcend Fortnite. In particular, Roblox had a surge of popularity from April 2025 onwards and saw mean playtime and regular visits turn supra Fortnite for the archetypal time. This reveals the much instantly competitory situation for attraction and monetisation that Fortnite is operating in. As revenues person dropped, truthful has the request to chopped costs to support nett margins and with staffing being the largest outgo it is possibly inevitable that Epic has had to trim the workforce."
"Epic says they are spending much wealth than they are earning," noted Dr. Serkan Toto, CEO of Japan crippled manufacture consultancy steadfast Kantan Games. "We request to presume this is existent and that the concern exemplary is not moving anymore, truthful Epic pulled retired the hammer alternatively of announcing a clump of tiny cuts implicit a agelong play of time. If gross falls, companies look astatine costs, and here, unit is typically the biggest block. So if the vessel sails into the incorrect direction, firing radical is the astir impactful mode to halt bleeding reddish ink. Boosting gross and profits successful a pugnacious marketplace similar the existent 1 is overmuch harder than cutting costs, truthful Epic reacted successful the mode they did."
Of course, processing Fortnite is conscionable 1 of Epic Games' costs. Alongside the improvement of its industry-dominating Unreal Engine toolkit, Epic has spent years waging precocious illustration campaigns against Apple (which it is inactive fighting), Google (which it has settled, allowing Fortnite afloat backmost connected Android phones), and Steam (where its bid to motorboat a rival PC crippled level has met with mixed fortunes).
Speaking to IGN past year, successful a punctuation which has been resurfaced and wide shared this week successful the aftermath of the layoffs, Epic Games brag Tim Sweeney said his institution had mislaid a immense magnitude of wealth portion warring Apple and Google, though helium had "no regrets" astir it. "The combat against Apple and Google has surely denied america a cardinal dollars of revenue, possibly respective billion," Sweeney said, earlier suggesting Epic Games had a large capable warfare thorax to proceed its campaigns agelong into the future. "I deliberation we mightiness tally into superior fiscal problems aft a mates much decades of this."
"Epic's caller redundancies are understandably being linked by galore to Fortnite, but that framing is apt excessively simplistic," said Adam Smart, Global Director of Product - Gaming astatine mobile analytics steadfast AppsFlyer. "While Tim Sweeney has acknowledged a softening successful Fortnite engagement since 2025, reflecting broader manufacture trends, that's lone 1 portion of a overmuch bigger picture. Epic has spent the past respective years investing heavy crossed aggregate fronts, astir notably successful its prolonged ineligible battles with Apple and Google. Those cases were hugely consequential for the manufacture — peculiarly successful opening up the speech astir direct-to-consumer payments — but they besides came astatine an tremendous fiscal cost."
Half a decennary connected from Fortnite's archetypal spat against Apple and Google, has the outgo successful ineligible fees and mislaid profits been worthy the battle? It's a question that volition surely beryllium connected the minds of Epic employees this week — those inactive astatine the firm, and those present unemployed, arsenic Sweeney blames layoffs connected the institution spending much than it has been earning.
"Beyond that, Epic has been gathering retired a overmuch broader ecosystem," Smart continued. "The Epic Games Store has required sustained concern crossed PC, console, and mobile, with mobile successful peculiar inactive not afloat realised contempt years of effort tied to those aforesaid ineligible challenges. At the aforesaid time, the institution has explored further initiatives, including imaginable B2B direct-to-consumer outgo solutions. Even wherever those haven't afloat materialized, they correspond important upfront outgo successful presumption of product, partnerships, and go-to-market efforts. When you furniture each of that together, the redundancies commencement to look little similar a absorption to a azygous product, and much similar the effect of cumulative strategical concern gathering a tougher macroeconomic environment."
Added Toto: "The ineligible costs of the year-long campaigns against 2 of the biggest companies that ever existed are surely astronomical, but each live-service crippled peaks and past starts declining 1 day. It seems adjacent Fortnite's champion days whitethorn beryllium down it. Their UGC inaugural ne'er became a information for Roblox, Steam is inactive overmuch bigger than the Epic Games Store and their assorted M&A deals implicit the past years seemingly did not lend to gross importantly capable either."
"All companies, immoderate size oregon success, are successful a battle…"“
Sweeney devoted a ample information of his connection to unit this week discussing wide manufacture trends that Epic Games, contempt its size and Fortnite's popularity, remains susceptible to. These adhd further to the analyzable representation of a institution experiencing what feels similar a existent turning point, arsenic Fortnite's momentum and Epic Games' costs intersect with pressures felt crossed the video crippled industry.
"Epic expanded its workforce rapidly implicit a five-year play starting successful 2019," Ampere Analysis' Piers Harding-Rolls noted. "Like different games companies that followed a akin people during the pandemic, contention for endowment during this play fuelled wage ostentation and ballooned the costs progressive successful games development. This was compounded by wide wage increases to screen precocious ostentation owed to the pandemic and Ukraine war. This has enactment broader unit connected margins crossed the industry, hence an summation successful prices crossed consoles, paid games, subscriptions and in-game items and conflict passes. Against this backdrop immoderate driblet successful revenues volition enactment a important unit connected margins and volition necessitate outgo savings to close course."
AppsFlyer's Adam Smart, meanwhile, pointed to the information that Epic Games has not (outside of its 2023 layoff) gone done the aforesaid cyclical, project-based scaling up and down of teams usually seen successful the video crippled industry. "Parts of the manufacture — peculiarly connected the PC and console broadside — person historically operated successful a much cyclical, project-based way, not dissimilar movie production," Smart noted. "Teams standard up during improvement and often declaration post-launch, which tin marque fiscal show look stronger erstwhile those costs travel disconnected the books.
"While live-service models similar Fortnite person shifted that dynamic, the manufacture is inactive successful modulation betwixt those 2 approaches. Ultimately, what we're seeing with Epic is simply a convergence of factors: semipermanent strategical bets, the precocious outgo of challenging level incumbents, evolving concern models, and a much hard planetary economical backdrop."
Indeed, galore video crippled companies person experienced layoffs implicit the past fewer years, with Epic Games' ain conscionable the latest among a bid of brutal cuts by Microsoft, a dilatory drip provender of departures astatine Ubisoft, and the nonaccomplishment of assorted studios owned by PlayStation. Nintendo, too, has had to set its costs, expanding the terms of its aging Switch console and Switch 2 accessories, and announcing plans to soon commencement selling carnal games astatine a higher terms than integer copies.
"All companies, immoderate size oregon success, are successful a conflict to negociate their costs," Harding-Rolls added. "This volition not get immoderate easier with different circular of planetary ostentation expected owed to the U.S. and Israel warfare with Iran. Unfortunately, staffing costs are wherever large outgo savings tin beryllium made, but that has implications for wide occupation information and workforce morale. Overall, portion Epic has specifically mentioned that AI is not a origin successful its determination making, the looming backdrop of rising ostentation means that games companies of each sizes volition beryllium anxious to leverage AI to go much efficient. That is apt to person immoderate interaction connected assemblage hiring successful the future."
What adjacent for Fortnite? If Epic Games continues down its existent path, it's possibly worthy remembering what Sweeney told IGN little than 12 months agone astatine Unreal Fest 2025, erstwhile helium said that the company's biggest situation was inactive convincing a wider assemblage that it had made an "everything game" that wasn't conscionable a conflict royale. In his enactment to unit this week, Sweeney said that what Epic Games needed to bash present was "clear: physique awesome Fortnite experiences with caller seasonal content, gameplay, story, and unrecorded events; accelerate developer tools with greater stableness and capableness arsenic we germinate from Unreal Engine 5 and UEFN to Unreal Engine 6." In different words, Fortnite needs to beryllium amended arsenic a conflict royale, portion its metaverse ambitions request to person a stronger technological base. Intriguingly, Sweeney besides noted that the institution would beryllium "kicking disconnected the adjacent procreation of Epic with immense motorboat plans towards the extremity of the year." Has the steadfast yet solved the occupation of making Fortnite thing bigger than a conflict royale, for existent this time?
"The redundancies consciousness little similar a awesome of a azygous nonaccomplishment and much similar the effect of a institution that spent years betting it could reshape the economics of the full games manufacture — a play of consolidation was astir apt inevitable," Smart concluded. "It conscionable looks bigger erstwhile it's Epic."
Tom Phillips is IGN's News Editor. You tin scope Tom astatine [email protected] oregon find him connected Bluesky @tomphillipseg.bsky.social
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