Epic Games’ strategy of offering free games on its store has proven to be a highly effective and economical way to attract new users, according to CEO Tim Sweeney. In a recent discussion, Sweeney revealed that while some of the company’s exclusive deals have been successful, many have not been good investments. “Giving away free games might seem counterintuitive, but companies spend money to acquire users into games,” Sweeney explained.
“For about a quarter of the price that it costs to acquire users through Facebook ads or Google Search Ads, we can pay a game developer a lot of money for the right to distribute their game to our users, and we can bring in new users to the Epic Games Store at a very economical rate.”
Sweeney noted that developers often see an increase in the sales of their paid games after offering a free game on the store, as it raises awareness and drives user engagement. Developers frequently collaborate with Epic to release free games ahead of new launches to maximize visibility. Documents from Epic’s legal battle with Apple reveal that the company spent $11.6 million on free games during the first nine months of the program.
Despite the expense, Sweeney described the initiative as “very economical” and emphasized its cost-effectiveness compared to traditional advertising methods.
Epic’s user acquisition challenges
In contrast, Epic’s strategy of striking exclusivity deals with publishers has faced challenges.
“We spent a lot of money on exclusives,” Sweeney admitted. “A few of them worked extremely well. A lot of them were not good investments, but the free games program has been just magical.”
Reports from 2021 suggest that Epic was likely to lose over $300 million on exclusivity deals up to that point.
Although the company has slowed down on pursuing new exclusivity deals, the strategy remains, particularly for games funded through Epic’s publishing division, which started in 2020. Overall, the free games initiative stands out as a highly successful and economical strategy for the Epic Games Store, while exclusivity deals have yielded mixed results. The success of the free games program suggests that it will continue to be a cornerstone of Epic’s user acquisition strategy moving forward.
