Another chink in the metaverse as Epic lays off 830 staff
Epic Games, the firm behind real-time graphics engine Unreal, is slashing its workforce by 16%. Founder and CEO Tim Sweeney admitted in an email to staff that it has overinvested in its metaverse ambitions.
In the open letter, Sweeney revealed that Epic Games — which also publishes Fortnite — had been actively seeking cost reductions by freezing hiring and curtailing expenditures on marketing and events.
“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,” he said.
“I had long been optimistic that we could power through this transition without layoffs, but in retrospect, I see that this was unrealistic,” he added.
Sweeney noted that while the creator economy that Epic has opened on Fortnite was thriving, the revenue share model meant that the publishing side of its business received lower margins. This led to “a major structural change” in their economics.
In addition to the layoffs, the company is selling the music store and community platform it acquired in 2022, Bandcamp, to the music marketplace Songtradr.
Sweeney said that Epic Games would also spin off most of SuperAwesome, the kids digital marketing company that Epic bought in 2020.
As well as games development, Epic’s Unreal Engine is used in the industry for architectural and automotive visualisation, as well as training and simulation.
Architectural firm BDP used Unreal recently to create an immersive experience from a digital twin of the Houses of Parliament, allowing architects and clients to move around the virtual version in real time.
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