When Epic Games decided to increase the price of V-Bucks, it started to become apparent that the unsinkable beast that was Fortnite was developing cracks in its hull. Clearly these cracks are deeper and larger than expected.
In a shocking turn of events, Epic Games has just announced that it has laid off as many as 1,000 employees. This was confirmed by CEO Tim Sweeney in a statement that was sent to Epic employees and published on the company's website, wherein Sweeney cites all kinds of reasons for the delays while outlining that the rise of AI in the video game sector played no part.
For one, Sweeney expressed that the downturn in interest in Fortnite has played a part as "we're spending significantly more than we're making, and we have to make major cuts to keep the company funded." To this point, on top of the 1,000 lost jobs, around half a billion dollars in cost-cutting measures have been identified in a bid to survive.
Beyond this, Sweeney notes that the industry-wide challenges play a factor too, as Epic has noticed "slower growth, weaker spending, and tougher cost economics; current consoles selling less than last generation's; and games competing for time against other increasingly-engaging forms of entertainment."
Sweeney does also express that Epic has been struggling to deliver in Fortnite in ways that it has in the past, with this being part of the problem as the game is seeing reduced engagement. The hope is that the return to Google Store and mobile platforms will help steady the ship.
Sweeney then explains that "the layoffs aren't related to AI," as while it does enhance productivity, "we want to have as many awesome developers developing great content and tech as we can."
Those who have been affected will receive at least four months of paid salary, extended healthcare, and accelerated stock options and extended equity exercise options for the next two years.
As for what's next for Epic Games, we're told that the focus is moving onto building "awesome Fortnite experiences with fresh seasonal content, gameplay, story, and live events," while simultaneously delivering a major launch slate of announcements later this year when the evolution from Unreal Engine 5 and UEFN to Unreal Engine 6 takes place.
Sweeney signs off with: "Market conditions today are the most extreme we've seen since those early days, with massive upheaval in the industry accompanied by massive opportunity for the companies that come out as winners on the other side. That's what we're aiming to do for our players, and we aim to bring other like-minded developers in the industry along on the journey to build an increasingly open and vibrant future of entertainment together."
It should also be said that these cost-cutting measures seem to be aligned with the decision to sunset and eventually shut down Fortnite's Rocket Racing, Ballistic, and Festival Battle Stage modes. In an accompanying article on X, Epic explains that on April 16 for Ballistic and Festival Battle Stage and then in October for Rocket Racing, the modes will be closing down as "we failed to build something awesome enough to attract and retain a large player base."
<social>https://x.com/FortniteStatus/status/2036451164347109440</social>
The question now is what else will be cut to keep Fortnite and Epic Games afloat?