Tim Sweeney Admits Epic Games Had 'Financial Problem' 10 Weeks Prior to Studio Layoffs

ign.com:

Epic Games CEO Tim Sweeney has admitted the company was grappling with a "financial problem" 10 weeks before announcing sweeping layoffs, in an unexpected admission during Unreal Fest earlier this week.

In a post on the social media platform X (spotted by Polygon), user @ImmatureGamerX uploaded a video recorded during one of the sessions available on the first day of the annual conference focused on Unreal Engine. However, this session is not included in the live streams available to the public.

Sweeney elaborated more on Epic's financial woes that led to the company laying off 830 employees late last month. Sweeney explained that management became aware of how dire their financial difficulties were just 10 weeks before the announcement.

Tim Sweeney addresses Epic Games Layoffs... #UnrealFest pic.twitter.com/49t4Tf20SA

"This wasn't a right sizing. I think we were in the right size, and I loved our original plans," Sweeney explained. "This was a survival move that was necessary. And what we did accomplish, the one thing is we stabilized our finances so we won't run out of money as we build the metaverse."

While Sweeney did not speak freely about the change in Epic's financial struggles, he admitted that the company relied heavily on Fortnite's revenue in recent years. It's not a complete surprise, as Fortnite has been one of Epic's most profitable properties. In 2021, it was reported that the popular free-to-play battle royale had made $9 billion in two years and had 400 million registered users at the time.

Even with the revenue Fortnite brought in for Epic, the company has been spending more than it's been making, something Sweeney disclosed in the letter sent out to staff last week. One costly venture is Epic's ongoing