Over the past couple of years, Epic Games has let go a few people and downsized its operations (and its marketing presence). Having had friends / acquaintances / people I know who worked there (and no longer do), I was always wondering what was going wrong with the company.
Now I know…
Fortnite Battle Royale catapulted Epic Games into a top 5 position in the video game industry in 2017. Come 2026, Epic Games has become the face of the industry’s biggest layoff as it cut 20% of the company.
Once as popular as Roblox, Call of Duty, Minecraft and Grand Theft Auto, Fortnite has since declined in engagement.
However, Epic Games is far more than just Fortnite, and that’s precisely the problem.
Before Fortnite, Epic Games was primarily known for its Unreal Game Engine, used widely across the video games industry and for virtual production.
As Fortnite took off, Epic Games embarked rapidly into new business areas, like thirt-party games publishing (eg Alan Wake 2), buying studios like Mediatonic, launching a storefront for PC games in competition with Steam and buying the music platform Bandcamp in 2020 during the pandemic.
But the rapid diversification has not worked out well. In 2023, they sold Bandcamp to a new buyer and all 800 people who worked on it were laid off (only some of them were hired by the new buyer). This highlighted a strategic failure to blend music streaming into Fortnite, which was strange as in-game concerts are hugely popular generally.
Epic Games also took a big hit (around $6 billion in annual revenue from 2020-2025) when Epic Games’ founder and CEO, Tim Sweeney challenged Apple and Google on their App Store / Play Store policies. This led to Fortnite’s removal from iOS and Android devices for several years as the companies battled in court over whether it was illegal for Apple/Google to block third-party payment options outside of apps (which Fortnite tried to avoid the 30% cuts of in-app purchases). While Epic Games achieved a win in 2025, Apple is still contesting the decision and Fortnite remained off smartphones until last year.
Mobile gaming revenues are nearly 50% of the global gaming market (90%+ in countries like India) for many years now, so 5 years of no mobile revenues is a big hit, even more so as it skipped a whole gaming generation on the mobile.
The silver lining for Epic Games remains its partnership with Disney, which invested $1.5 billion in 2024 to explore in-game Fortnite experiences based on Disney IPs, including a dedicated section of Fortnite to function as a Disney universe (yet to launch). The removal of 1,000 jobs at Epic Games is possibly a dramatic course of action meant to streamline the company into sensible business models amid the pressure of delivering to Disney and to re-invent Fortnite, continue to build Unreal Engine and possibly look solidifying its core businesses.