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Epic spent more than $11M on free games in the first nine months of giveaways

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A document released as an exhibit in the Apple v. Epic lawsuit that got underway Monday reveals that Epic dropped more than $11.6 million dollars on free games in the first nine months of its operation, between December 2018 and September 2019.

GameDiscoverCo founder Simon Carless, who tweeted the image earlier today, explained that the document in question was one of several that were released prematurely: They weren't meant to go public until later in the trial, but were mistakenly included with Epic's documents, which were released today. All of the documents were quickly removed from the archive, but appear to have been restored since.

The full doc paints a very interesting picture of the early days of the Epic Store, and reveals a remarkable disparity in what it paid for various games in order to be able to give them away. Edmund McMillen's The End is Nigh earned him $200,000, for instance, while Annapurna's What Remains of Edith Finch only drew $125,000. Epic paid PlayDead $350,000 for Limbo and $800,000 for Inside, but Alan Wake only warranted $150,000. 

The top getter was Batman: Arkham trilogy, which cost Epic $1.5 million, followed closely by Subnautica, at $1.4 million; the best bargain (for Epic, that is) was Metro 2033 Redux, which Deep Silver apparently decided to throw in for free.

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‚ÄĒand 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‚ÄĒand, 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.

Epic declined to comment on the document.

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