Epic Games Acquires Rocket League Developer Psyonix - Guess They Needed More Games-As-Service

[Secret Asshole]

Epic Games Acquires Rocket League Dev Psyonix - Niche Gamer

Epic Games has announced they’ve acquired Rocket League developer Psyonix. While details are scant, the developer is pledging their continuing support to the popular game, however they will naturally make the game exclusive to the Epic Games Store on PC. Existing PC users on Steam, however...

nichegamer.com

Epic Games has announced they’ve acquired Rocket League developer Psyonix.

While details are scant, the developer is pledging their continuing support to the popular game, however they will naturally make the game exclusive to the Epic Games Store on PC.

Existing PC users on Steam, however, shouldn’t worry – Psyonix has pledged the game will “continue to be supported on Steam for all existing purchasers.”

The acquisition is expected to close by “end of May or early June.” Psyonix currently employs 132 people.

Here’s the entire letter from Psyonix:

Today is a big day for us here at Psyonix because, just as the headline says, we’re officially joining the Epic Games family.

Your first question to news like this might be, “What does this mean for Rocket League and its community?” We’re happy to say that the answers are only positive. Rocket League always has been and always will be a community-driven game, and now that we have joined forces with Epic, we will be able to serve our community in even bigger and better ways!

We understand that you might have additional questions about this new relationship, which is why we’ve assembled this quick FAQ to answer some of your initial Qs:

“No, really. What does this mean for Rocket League?”

In the short term, nothing will change at all! We’re still committed to providing Rocket League with frequent updates that have new features, new content, and new ways to play the game for as long as you’ll have us.

In the long-term, we expect to bring Rocket League to the Epic Games store and to leverage our new relationship to grow the game in ways we couldn’t do on our own before. We believe that bringing Rocket League to new audiences with more support is a win for everybody.

“Does this mean the gameplay will be different?”

Nope!

“What does this mean for the Rocket League Esports ecosystem?”

We think this is a great move for the Rocket League Esports ecosystem because it significantly increases our potential reach and resources, just like it does for the game itself. We really do believe that you’ll find our future in esports to be very exciting — especially in the near future, where on June 21-23 at the Prudential Center in Newark, New Jersey, the Rocket League Championship Series (RLCS) finals will end our 7th season with a bang!

“What happens to the Psyonix team?”

We are the same team that we’ve always been, only now, we have the power and experience of Epic Games behind us!

One last thing before we go…

The success of Rocket League would not have been possible without you, our community. Your loyalty, excitement, and creativity in supporting Psyonix has helped us become who we are, and we look forward to you helping us for many more years to come. You have our sincerest thanks and appreciation.

Respectfully,

The Psyonix Team

So, what does this mean?

1) China now owns Rocket League

2) This will be Epic Exclusive later this year so if you want to buy your loot box gambling game car ball game buy it now

3) Psyonix will now enjoy the 100+ Epic hour work weeks.

In all seriousness, Epic bought them because they bring in massive amounts of money via microtransactions and even with Fortnite money the Epic store is not sustainable. Steam not taking the bait, Epic spent more money and is probably more in the hole. Since this was a profitable property.

So it will take time to generate profit, but Rocket League always seemed to be waning in popularity so it remains to be seen if this works or not

 

[Sparky Lurker]

Begun the gaming launcher sperg wars has.

 

[Secret Asshole]

Epic isn't a game launcher, it's a website with terrible security

 

[tehpope]

Well cross platform gaming was fun. RIP Rocket League

 

[REGENDarySumanai]

Someone had to fuck it all up, and it was Epic. Good job.

 

[The tired cat]

Soooo...Anyone ever cared about Rocket League anymore? Just a honest question.

 

[Zeke Von Genbu]

It wouldn't be that difficult or long for this to be considered profitable all Epic has done is trade assets (their cash vs Psyonix's net assets) + some overpayment amount and minor acquisition costs, the better question is this presumed "support" and "resources" Psyonix will gain access to by being under Epic and if this purchase was the best way to use the amount of what I'd assume is their capital investment budget. If that support is worth it to epic is anyone's guess because Rocket League is coming on 4 years old now so it might be too little too late.

 

[Secret Asshole]

Not really. Like I said, the Epic store is unprofitable as all the other ones, just with the extra added bonus of being unprofitable with exclusives. There's 0 reason to believe it'd be any more popular than GoG, Twitch or Discord's store. All of which have similar/better cuts than Steam.

Rocket League is basically a games as service with huge amounts of micro-transactions. Acquiring Rocket League allows a constant flow of money from whales as they make new content. If you have it on Steam, it stays on Steam and you get future support on Steam. In this case, they're not looking for new players, they're looking to get money from micro transactions.

My thing is Sweeny's statement for Steam to cut its percentage wasn't one of strength, it was one of desperation, that their tactics weren't really working or having any sort of effect on Steam. It was in fact the opposite, solidifying the PC userbase against Epic and even making people hate Steam hate them.

Buying the studio and Rocket League is NOT cheap, since Rocket League earns buckets through micro-transactions still. So he's putting the store more in the red and hoping eventually the micro-transactions from 2 games as service will help keep the store afloat. It is certainly a gamble, since you're not going to see new users since Rocket League is pretty well established, you're basically relying on the current userbase to keep buying micro-transactions. Shifting it off of Steam basically is irrelevant since everyone already hates you and if people wanted the game they would have bought it already.

Epic buying this is basically them trying to increase revenue to prop up the store because they're relying on current, hardcore users on Steam who buy micro-transactions and basically only play Rocket League, not new users buying the game.

The funny thing is, a LOT of DLC is still available through Steam and the studio says it will support current Steam users. Steam can basically say, 'Yeah, 99% of Rocket League DLC purchases on Steam go to us now that you've removed it from our platform, but you still support our users. So any DLC released you will make no money from, they'll have to re-buy the game on Epic's platform or in store'. I mean, its kind of funny at how vulnerable Epic made themselves by doing this. Rocket League still has 80 bucks worth of DLC for sale. So if you buy Rocket League, Steam can just massively inflate its cut for the DLC purchases that are currently available. It can really fuck with Epic if it wanted to do so and prevent Epic from actually releasing normal, non-lootbox DLC to Steam users unless there is some way to do it in the game itself. It kind of relies on Steam not being a cunt about it.

I mean, if I were Steam I'd just adjust the cut Epic gets from any current Rocket League purchase. I don't know if Steam can arbitrarily just change what they take from you, but if an aggressive competitor kept trying to use me for advertising and profit, I'd find some way to punish that, especially considering the developers are no longer independent.

If that support is worth it to epic is anyone's guess because Rocket League is coming on 4 years old now so it might be too little too late.

Epic is relying on the whales, of which I understand there are in Rocket League. Whether its worth all the money and investment to offset the current bleeding, that's debatable.

 

[Racist Trash]

Epic isn't a game launcher, it's a website with terrible security

I still can't believe they don't even have basic e-commerce stuff like a fucking basket, like come on everything has that basic service.

 

[Anonymous For This]

At least back in the Dark Ages when I had a launcher for every single game, the games were actually sold fucking complete. And if there was an expansion, it expanded on an already complete game -- like Bloodmoon and Mournhold for Morrowind. Now you need to spend $250 for a working version of Europa Universalis 4.

The day Paradox Entertainment tries to pull an Epic Games will be the day the 7th trumpet blasts us to Armageddon.

 

[Zeke Von Genbu]

Not really. Like I said, the Epic store is unprofitable as all the other ones, just with the extra added bonus of being unprofitable with exclusives. There's 0 reason to believe it'd be any more popular than GoG, Twitch or Discord's store. All of which have similar/better cuts than Steam.

...Buying the studio and Rocket League is NOT cheap, since Rocket League earns buckets through micro-transactions still. So he's putting the store more in the red and hoping eventually the micro-transactions from 2 games as service will help keep the store afloat. It is certainly a gamble, since you're not going to see new users since Rocket League is pretty well established, you're basically relying on the current userbase to keep buying micro-transactions. Shifting it off of Steam basically is irrelevant since everyone already hates you and if people wanted the game they would have bought it already.

Spoiler: Warning: Accounting autism below, tl;dr here if you just want the gist.

Almost none of this is considered an expense to Epic, it is mostly an exchange of assets and changes the level of liquidity which doesn't matter too much unless loans exist and/or Tencent has liquidity requirements of some sort. The only reason this should put anyone in the red is if this acquisition dramatically impacts Rocket League, which it might but if it doesn't then the investment is profitable to some degree regardless of the store. This overall is a question of if any of this was worth it instead of using this money to do basically any other investment. At least that is my outside speculation.

Buying a subsidiary is trading cash (the most liquid asset) for assets, though it can involve purchasing stock, but I have no idea if Psyonix has stock so I'm ignoring that. How this cash is received and generated changes a couple of things as it might have required taking a loan, this cash amount is net assets + whatever the overpayment for the assets is. That overpayment amount would become an asset called goodwill, not an expense like "overpayment on acquisition" or whatever.

So you've just changed the liquidity of your assets as cash is always the most liquid asset, for Psyonix's cash and other less liquid assets, but unless you need to pay debt fast or you have a loan covenant; this doesn't really matter too much to your operations unless Tencent has their own demands for how liquid Epic's assets need to be. Also, none of these expenses would likely be allocated to the store itself, it'd impact the entire company directly as the new consolidated entity that it has become. Basically, none of this would be expensed to the store and even if the store fails, that doesn't automatically make this acquisition a failure.

You don't take a very notable "expense" by buying another company, you basically have an opportunity loss on what you could have done with that money which is inestimable until we see how this plays out. Below is what the entries would likely look like if I had to write these entries in Epic's books. These are the only entries on their books in relation to this acquisition, everything else you could think of would be under temporary accounts used solely to combine these two for reporting purposes. For anyone who doesn't know accounting debits (the left) and credits (the right) should always balance against each other.

Spoiler: Accounting autism/Acquisition entries.

Investment in subsidiary Psyonix	XXXX (This implies an asset was purchased, the overpayment/goodwill is also here and is allocated directly to this asset account)
Cash		XXXX (This implies cash was decreased)
Acquisition Expenses	XXXX (The actual expense in this acquistion)
Cash		XXXX (The loss of assets specifically lost on this acquistion)
Assets - S	XXXX (This is the net of the latter 2)
Liabilities - S		XXXX (Liabilities Psyonix has)
Subsidiary Equity		XXXX (The amount of ownership Psyonix has to their assets against the liabilities)

Only one expense is here and I can pretty much guarantee it'd be the smallest number in those "XXXX"s. All expenses Psyonix has for normal operations would be under their books and we'd allocate their net income or loss at Epic's year-end financials. That would be the only time the word expense, the things that put you in the red, would really matter in this as the actual expense to acquire the company isn't very large.

So the real question is what else could Epic have done with that "XXXX" amount of cash instead of buying Psyonix and supporting them for the forseeable future. This is a capital investment, therefore it was funded by a pool of money that exists to make capital investment purchases because you don't just sit on the type of cash that lets you make investments like this, these types of investments could be developing something, this could be buying a company, it could be buying something that improves operations in some way or just about anything you'd invest into to hopefully see a return on your investment. They can acquire this money just by having it, a loan, or it was given by Tencent after some sort of proposal or a combination of any of these things.

Also, this store would also likely be considered a capital investment if that wasn't obvious. It is likely this store was estimated to not see any real returns until after year 1, at least that is what I'd imagine the projections would be, though the losses might be larger than expected which is why this assumed desperation is occurring. So again was this store a worthwhile investment vs using this money to do anything else? Obviously, we can speculate with pretty good accuracy that it isn't, so they seem to be trying to double down with this acquisition and if the store still fails they still have whatever value is left of Psyonix.

In conclusion, while these investments are connected, they're still separate investments and one can be successful while another fails. The main thing I personally wonder is if focusing on implementing more money into Rocket League is a valid idea, or if a new game should be developed.

 

[whatever I feel like]

Could have been yours, Cliffy. Could have all been yours.

 

[Fagnacious D]

Epic Games Acquires Rocket League Dev Psyonix - Niche Gamer

Epic Games has announced they’ve acquired Rocket League developer Psyonix. While details are scant, the developer is pledging their continuing support to the popular game, however they will naturally make the game exclusive to the Epic Games Store on PC. Existing PC users on Steam, however...

nichegamer.com

So, what does this mean?

1) China now owns Rocket League

2) This will be Epic Exclusive later this year so if you want to buy your loot box gambling game car ball game buy it now

3) Psyonix will now enjoy the 100+ Epic hour work weeks.

In all seriousness, Epic bought them because they bring in massive amounts of money via microtransactions and even with Fortnite money the Epic store is not sustainable. Steam not taking the bait, Epic spent more money and is probably more in the hole. Since this was a profitable property.

So it will take time to generate profit, but Rocket League always seemed to be waning in popularity so it remains to be seen if this works or not

I have only one thing to add...

How long before they're dissolved / fully absorbed?

 

[Secret Asshole]

Spoiler: Warning: Accounting autism below, tl;dr here if you just want the gist.

Almost none of this is considered an expense to Epic, it is mostly an exchange of assets and changes the level of liquidity which doesn't matter too much unless loans exist and/or Tencent has liquidity requirements of some sort. The only reason this should put anyone in the red is if this acquisition dramatically impacts Rocket League, which it might but if it doesn't then the investment is profitable to some degree regardless of the store. This overall is a question of if any of this was worth it instead of using this money to do basically any other investment. At least that is my outside speculation.

Buying a subsidiary is trading cash (the most liquid asset) for assets, though it can involve purchasing stock, but I have no idea if Psyonix has stock so I'm ignoring that. How this cash is received and generated changes a couple of things as it might have required taking a loan, this cash amount is net assets + whatever the overpayment for the assets is. That overpayment amount would become an asset called goodwill, not an expense like "overpayment on acquisition" or whatever.

So you've just changed the liquidity of your assets as cash is always the most liquid asset for Psyonix's cash and other less liquid assets, but unless you need to pay debt fast or you have a loan covenant, this doesn't really matter too much to your operations unless Tencent has their own demands for how liquid Epic's assets need to be. Also, none of these expenses would likely be allocated to the store itself, it'd impact the entire company directly as the new consolidated entity that it has become. Basically, none of this would be expensed to the store and even if the store fails, that doesn't automatically make this acquisition a failure.

You don't take a very notable "expense" by buying another company, you basically have an opportunity loss on what you could have done with that money which is inestimable until we see how this plays out. Below is what the entries would likely look like if I had to write these entries in Epic's books. These are the only entries on their books in relation to this acquisition, everything else you could think of would be under temporary accounts used solely to combine these two for reporting purposes. For anyone who doesn't know accounting debits (the left) and credits (the right) should always balance against each other.

Spoiler: Accounting autism/Acquisition entries.

Investment in subsidiary Psyonix	XXXX (This implies an asset was purchased, the overpayment/goodwill is also here and is allocated directly to this asset account)
Cash		XXXX (This implies cash was decreased)
Acquisition Expenses	XXXX (The actual expense in this acquistion)
Cash		XXXX (The loss of assets specifically lost on this acquistion)
Assets - S	XXXX (This is the net of the latter 2)
Liabilities - S		XXXX (Liabilities Psyonix has)
Subsidiary Equity		XXXX (The amount of ownership Psyonix has to their assets against the liabilities)

Only one expense is here and I can pretty much guarantee it'd be the smallest number in those "XXXX"s. All expenses Psyonix has for normal operations would be under their books and we'd allocate their net income or loss at Epic's year-end financials. That would be the only time the word expense, the things that put you in the red, would really matter in this as the actual expense to acquire the company isn't very large.

So the real question is what else could Epic have done with that "XXXX" amount of cash instead of buying Psyonix and supporting them for the forseeable future. This is a capital investment, therefore it was funded by a pool of money that exists to make capital investment purchases because you don't just sit on the type of cash that lets you make investments like this, these types of investments could be developing something, this could be buying a company, it could be buying something that improves operations in some way or just about anything you'd invest into to hopefully see a return on your investment. They can acquire this money just by having it, a loan, or it was given by Tencent after some sort of proposal or a combination of any of these things.

Also, this store would also likely be considered a capital investment if that wasn't obvious. It is likely this store was estimated to not see any real returns until after year 1, at least that is what I'd imagine the projections would be, though the losses might be larger than expected which is why this assumed desperation is occurring. So again was this store be a worthwhile investment vs using this money to do anything else? Obviously, we can speculate with pretty good accuracy that it isn't, so they seem to be trying to double down with this acquisition and if the store still fails they still have whatever value is left of Psyonix.

In conclusion, while these investments are connected, they're still separate investments and one can be successful while another fails. The main thing I personally wonder is if focusing on implementing more money into Rocket League is a valid idea, or if a new game should be developed.

Thanks for the accounting stuff! Well, lets consider these factors:

1. Rocket League is 4 years old at this point across probably every platform in existence. Money is not going to be coming from a new userbase. Epic has to know this
2. Rocket League is well established on Steam, along with DLC. The assumption is that they have to support their Steam userbase no matter what, because you basically make this investment worthless if you basically cut them off and force them to re-start on Epic. So unless there's an in-game store, DLC will continue to be offered through Steam, in which a direct competitor will get a cut of money. Ironically, Steam will be making money off of Epic from this. This also allows Steam to fuck with Epic if they so desire. This is an inherent risk. Which Epic has to know.
3. They expect most of the value from micro-transactions and existing whales. So my bet is the focus is going to be on Rocket League for existing users as a game-as-service, with the development of an in-game store, more micro transactions and doing as many things as possible to circumvent putting any further DLC on Steam. Which requires further investment as they have to continue to produce content to keep the whales happy.

So, tl;dr: This is a massive risk and Epic in the short term is actually enriching Steam as people rush to buy as much as they can off of Steam before it goes to Epic. It also means spending money to create more content to keep whales happy and make this worth it. All I really see is Epic spending massive amounts of capital and they're risking a lot on a four year old IP.

My feeling is simple. Tim Sweeny should have put all this money into buying exclusives into developing an Unreal Tournament style game. These sort of shooters don't exist anymore and there's a huge demand for it. Pair with it some cosmetics, some MMO aspects, and you've got a license to print money. Not only that, you already own the IP and the engine, so it'd be cheaper than what you are doing now. I feel like doing third party exclusives and buying a 4 year IP on top is just digging a bigger and deeper hole. It would have been better to develop a flag-ship game, like making Unreal Tournament Epic's DotA 2. That way you have 2 income streams, you can develop your store along with a unique IP. You'll attract Steam users because they pine for Unreal Tournament. Like look at DotA 2, copy what it does with weapons and cosmetics and maps, no heroes, just models and races, have a ladder, some sort of progression and boom, you print money. You no longer need to rely solely on Fortnite as your revenue stream.

Instead, Sweeny decided to do a brute force method without actually building anything and the desperation is showing. Buying Rocket League and its developer is not from a position of strength. It shows they need a constant income stream fast and is something they cannot afford to develop themselves. And at the same time, he's still buying even more negative press for the store in the process. It seems like the sunk cost fallacy to me. Sweeny believes himself committed, so he's staying on a course that clearly isn't working.

I do not think this will work out in the end. In addition, I don't think Epic can afford to do Steam sales, which gives Steam massive amounts of cash, along with developers, far more than Sweeny's cut could give them. So he's still going to suffer. Then you've got Steam's new VR, which might turn out to be amazing. Lots of hype for it. Buying Rocket League and its developer does not seem like enough.

I have only one thing to add...

View attachment 743864
How long before they're dissolved / fully absorbed?

As soon as the profit doesn't come in.

I still can't believe they don't even have basic e-commerce stuff like a fucking basket, like come on everything has that basic service.

This is why I refuse to call Epic a store. Its not. Its a website to launch a game on your computer. They're barely investing in the store and spending all their money on stupid shit like a 4 year old IP that carries with it some major risk of failing.

 

[BrunoMattei]

Not really. Like I said, the Epic store is unprofitable as all the other ones, just with the extra added bonus of being unprofitable with exclusives. There's 0 reason to believe it'd be any more popular than GoG, Twitch or Discord's store. All of which have similar/better cuts than Steam.

Rocket League is basically a games as service with huge amounts of micro-transactions. Acquiring Rocket League allows a constant flow of money from whales as they make new content. If you have it on Steam, it stays on Steam and you get future support on Steam. In this case, they're not looking for new players, they're looking to get money from micro transactions.

My thing is Sweeny's statement for Steam to cut its percentage wasn't one of strength, it was one of desperation, that their tactics weren't really working or having any sort of effect on Steam. It was in fact the opposite, solidifying the PC userbase against Epic and even making people hate Steam hate them.

Buying the studio and Rocket League is NOT cheap, since Rocket League earns buckets through micro-transactions still. So he's putting the store more in the red and hoping eventually the micro-transactions from 2 games as service will help keep the store afloat. It is certainly a gamble, since you're not going to see new users since Rocket League is pretty well established, you're basically relying on the current userbase to keep buying micro-transactions. Shifting it off of Steam basically is irrelevant since everyone already hates you and if people wanted the game they would have bought it already.

Epic buying this is basically them trying to increase revenue to prop up the store because they're relying on current, hardcore users on Steam who buy micro-transactions and basically only play Rocket League, not new users buying the game.

The funny thing is, a LOT of DLC is still available through Steam and the studio says it will support current Steam users. Steam can basically say, 'Yeah, 99% of Rocket League DLC purchases on Steam go to us now that you've removed it from our platform, but you still support our users. So any DLC released you will make no money from, they'll have to re-buy the game on Epic's platform or in store'. I mean, its kind of funny at how vulnerable Epic made themselves by doing this. Rocket League still has 80 bucks worth of DLC for sale. So if you buy Rocket League, Steam can just massively inflate its cut for the DLC purchases that are currently available. It can really fuck with Epic if it wanted to do so and prevent Epic from actually releasing normal, non-lootbox DLC to Steam users unless there is some way to do it in the game itself. It kind of relies on Steam not being a cunt about it.

I mean, if I were Steam I'd just adjust the cut Epic gets from any current Rocket League purchase. I don't know if Steam can arbitrarily just change what they take from you, but if an aggressive competitor kept trying to use me for advertising and profit, I'd find some way to punish that, especially considering the developers are no longer independent.



Epic is relying on the whales, of which I understand there are in Rocket League. Whether its worth all the money and investment to offset the current bleeding, that's debatable.

Since Tencent is a billion dollar corporation, basically the Chinese Google, how long will it take until they just cut their losses with Epic and the Epic store because it's unprofitable? Or, conspiracy theory time, they'll absorb the loss so long as they get access to our data for god knows what.

 

[Draza]

Soooo...Anyone ever cared about Rocket League anymore? Just a honest question.

It still brings in a lot of views on twitch, especially for esports which can go up to a hundred thousand viewers in the summer.

 

[tehpope]

Hopefully someome will start work on an open source remake of Rocket League. Great game, but Epic will prpbably throw it to the wayside once it sucks it dry of profit.

 

[Zeke Von Genbu]

Thanks for the accounting stuff! Well, lets consider these factors:

1. Rocket League is 4 years old at this point across probably every platform in existence. Money is not going to be coming from a new userbase. Epic has to know this
2. Rocket League is well established on Steam, along with DLC. The assumption is that they have to support their Steam userbase no matter what, because you basically make this investment worthless if you basically cut them off and force them to re-start on Epic. So unless there's an in-game store, DLC will continue to be offered through Steam, in which a direct competitor will get a cut of money. Ironically, Steam will be making money off of Epic from this. This also allows Steam to fuck with Epic if they so desire. This is an inherent risk. Which Epic has to know.
3. They expect most of the value from micro-transactions and existing whales. So my bet is the focus is going to be on Rocket League for existing users as a game-as-service, with the development of an in-game store, more micro transactions and doing as many things as possible to circumvent putting any further DLC on Steam. Which requires further investment as they have to continue to produce content to keep the whales happy.

So, tl;dr: This is a massive risk and Epic in the short term is actually enriching Steam as people rush to buy as much as they can off of Steam before it goes to Epic. It also means spending money to create more content to keep whales happy and make this worth it. All I really see is Epic spending massive amounts of capital and they're risking a lot on a four year old IP.

My feeling is simple. Tim Sweeny should have put all this money into buying exclusives into developing an Unreal Tournament style game. These sort of shooters don't exist anymore and there's a huge demand for it. Pair with it some cosmetics, some MMO aspects, and you've got a license to print money. Not only that, you already own the IP and the engine, so it'd be cheaper than what you are doing now. I feel like doing third party exclusives and buying a 4 year IP on top is just digging a bigger and deeper hole. It would have been better to develop a flag-ship game, like making Unreal Tournament Epic's DotA 2. That way you have 2 income streams, you can develop your store along with a unique IP. You'll attract Steam users because they pine for Unreal Tournament. Like look at DotA 2, copy what it does with weapons and cosmetics and maps, no heroes, just models and races, have a ladder, some sort of progression and boom, you print money. You no longer need to rely solely on Fortnite as your revenue stream.

Instead, Sweeny decided to do a brute force method without actually building anything and the desperation is showing. Buying Rocket League and its developer is not from a position of strength. It shows they need a constant income stream fast and is something they cannot afford to develop themselves. And at the same time, he's still buying even more negative press for the store in the process. It seems like the sunk cost fallacy to me. Sweeny believes himself committed, so he's staying on a course that clearly isn't working.

I do not think this will work out in the end. In addition, I don't think Epic can afford to do Steam sales, which gives Steam massive amounts of cash, along with developers, far more than Sweeny's cut could give them. So he's still going to suffer. Then you've got Steam's new VR, which might turn out to be amazing. Lots of hype for it. Buying Rocket League and its developer does not seem like enough.

It's nothing, this is why I wanted to get into accounting I wanted to try and understand video games as an industry so I can hopefully communicate it to other people, and I was reasonably good at it and it seemed like a stable profession. Though I don't work anywhere, I've just been studying for awhile and have nearly graduated with a 4 year degree. So to touch on everything you said.

1: Likely, though in the grand scheme of things more revenue likely comes from microtransactions than the game's sales themselves for obvious reasons. So the lack of game sales is not significant enough to matter, but we agree on that overall. This is clearly a play to gather all the money themselves from microtransactions as you've pointed out. Do note that as a consolidated entity even if the money doesn't go directly to Epic, it doesn't mean they lack access to it or at least lack the ability to take credit for "earning it". Their effectively a subsidiary of a subsidiary, in the end Tencent profits as long as Rocket League doesn't die. When Epic reports to Tencent, they've consolidated all the earnings to themselves with disclosure of the proportion that comes from Rocket League/Psyonix.

In short, when you consolidate financial statements the parent is the face of the report effectively, because it mostly focuses on the parent and how the subsideries operations merge into the parent's operations. So if Rocket League is profitable, that profit is considered Epic's profit because they made the brilliant idea to buy the studio so it looks pretty good. So all PC microtransactions are almost 100% owned by Epic for reporting purposes (ignoring steam's cut), minus whatever comes from console post cuts assuming they stay on the console platforms which I assume they will. We can speculate if this is a factor to why this purchase happened. Though obviously anyone savvy about any of these reports knows why Epic would suddenly have a massive increase in revenue in the middle of Q2 and beyond (assuming Epic's year end is Dec 31 meaning we're in the start of Q2), but it is still what I'd imagine is posturing to look better in the face of the store's shaky beginnings.

2: I agree on most of this except the part of about fucking with the cuts. This depends on if Steam is allowed to just rewrite the agreement like this, I don't want to try to figure the legality of this if there is any, I'm studying accounting not law. You're basically saying "I don't like your private business decisions, fuck your business" with this proposed idea, that doesn't sound right or something anyone wants to deal with. As funny as that might be for Epic and Steam to get into a legal battle over car soccer DLC, I don't think anyone wants to deal with it.

3: This is where my speculation comes in. I know basically nothing about Rocket League so I can't try to guess how this expansion of Psyonix's accessible resources will pan out and what could happen. I'd imagine they'll try to increase update speed to stay relevant and increase purchases over the course of the year, but I don't know what those kind of updates would be. Also esports is a relevant thing right? That is also revenue/profit Epic technically has rights to report owning.

The rest of this is speculative based on my obviously limited observations of the video game industry mixed in with what I know from my business studies. I'm just trying to set this up how a typical businessman would most likely see this proposal.

First, this entire venture is too short lived as of right now to properly figure out what is going wrong, if it is going wrong at all if they estimated losses in year 1, and you can't just act like a schizophrenic with millions of dollars in investment. So unfortunately until I'd say the end of year 1 we can't just kill this thing off, it just can't happen and I wouldn't expect anything until the end year 2 unless something cataclysmic happens.

Also developing an entirely new game (and IP) when Fortnite still exists sounds like a bad idea, you'd need to hire staff, pre-plan a this proposed game (I'd speculate 6 months to a year), how it'll function/generate revenue assuming we don't just save that for the end and try to make a reasonable monetization scheme, and spend at least 2-3 years developing it. You will not see any revenue for 3-4 years in any capacity, Epic's store might generate losses right now, but it still generates revenue. From a typical business prospective depending on how this was budgeted and proposed, this store is likely an easier sell.

Second, you have to propose this hypothetical new IP while Fortnite is a major phenomenon, reallocate/buy new teams of staff to create this, and possibly slow down the Fortnite train? I a typical businessman see no reason to do this in the short run and most business plans from what I've heard are fairly short term plans, long term in business is around 5 years for example. Now expanding into a new operation where you can sell other people's games like Steam and your big selling point is to appeal to consumers that hate steam by posturing as trying to support the indie scene for positive PR? Also, this operation doesn't require jackshit amount of time to develop and you can basically print money once you're established by almost doing nothing, compared to making actual video games. Spin some numbers, make positive projections, and implement a plan of action you're confident will work to a bunch of suits? Sounds like a great idea on paper to me, video games take too long and are hard. Tencent owns a lot of shit, so I doubt they have much or any specialized awareness or understanding of how this stuff works.

Though Tencent bought Riot Games during the peak of their popularity, one of the most time wasting studios I've ever heard of, where I've heard stories of champions taking more than a year to make because the designer kept changing his mind on fairly minor details and Riot's heads are just like "yeah whatever man we believe you'll make something cool lol". So who knows I guess.

Yes I do realize this sounds very short sighted and I by no means support Epic, but if this was proposed to me and I'm not savvy enough to understand the nuances of what is going on, I'll take the Epic Store over the Unreal Fortnite Tournament proposed here. That is just my speculation, based on what I'd imagine a typical suit would think about these two proposals.

 

[JuanButNotForgotten]

China now owns Rocket League

Hope people will have fun playing it only on odd days.

Since Tencent is a billion dollar corporation, basically the Chinese Google, how long will it take until they just cut their losses with Epic and the Epic store because it's unprofitable? Or, conspiracy theory time, they'll absorb the loss so long as they get access to our data for god knows what.

Only after battle royale fad will run out and army of 10-year olds find something else to annoy people with.

 

[Clop]

https://steamcharts.com/app/252950

It's still in the top 10 games played on Steam, it has its loyal fans. And loyal fans is what any game wants if they can profit off whales because whales are the most loyal fans of all.

I still play it locally with friends on occasion, and as long as Steam still has its policy to let owners of a game keep downloading it despite it dropping off the store, it'll be fine. Unless the game starts demanding Epic to be launched every time and refuses to run otherwise, in which case I'll be freeing some space for a different couch game.

This is going swimmingly.