Many of Epic's exclusivity deals were 'not good investments,' says Tim Sweeney, but the free games program 'has been just magical'

pcgamer.com:

Epic has been giving away games on the Epic Games Store since it launched at the end of 2018, enticing Steam users to install its launcher with freebies as big as Grand Theft Auto 5 and Civilization 6. More than 580 million free games were claimed just last year.

Giving away half-a-billion game copies a year is not a cheap thing to do. Epic only pays a fraction of each game's list price per copy given away, but it adds up. Thanks to documents that came out during Epic's legal fight with Apple, we learned that the company spent $11.6 million on free games in just the first nine months of the program. Epic has been giving away games for six years now.

However, responding to a question about Epic's free game strategy on a call with press earlier this week, Epic CEO Tim Sweeney said that it's been a «very economical» user acquisition program, with the bonus that the budget goes to game developers—a group that it's in a game store's interest to see thrive—rather than toward Facebook or Google ads.

«Giving away free games seems counterintuitive as a strategy, but companies spend money to acquire users into games,» said Sweeney. «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.

»And you might think that this would hurt the sales prospects of games on the Epic Game Store, but developers who give away free games actually see an upsurge in the sale of their paid games on the store, just because their free game raises awareness. And it's so much that often developers, when they're about to launch a new game, come with us wanting to work closely on a timed release of a free game, just to drive user awareness of their next game. That's been an awesome thing. And it's been by far the most cost effective aspect of the Epic Games Store."

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