The Epic Games Store has become a lightning rod in the video game community. While some have given it high praise for their work, others have berated them for their unfair practices of “claiming” certain IP’s for exclusive rights. Whether you feel one way or the other, the fact of the matter is this, Epic Games knows what they’re doing. This is no more evident thanks to a recent financial document from Digital Bros., who is the parent company of the video game publisher 505 Games, who in turn helped publish Remedy Entertainment’s brand new video game, Control.
Control is part of the Epic Game Store’s exclusivity deal on PC, therefore they more than likely had to give up a decent sum for this type of transaction. The document, which can be seen here, was tweeted out by well known video game statistician Daniel Ahmad, and is an extremely long write up. However, there is a small part of it that reveals how much they received from Epic for this deal; 9.49 million Euro’s, which in U.S. Dollars equals to approximately $10.44 million. It’s also important to note that this entire document is in Italian.
Digital Bros, parent company of 505 Games, has disclosed that they received a payment of 9.49 million euro from Epic Games for Control.
Which I would imagine is for exclusivity.
55% of that payment going to 505 Games.
Report here: https://t.co/ocmbIQeOfJ
— Daniel Ahmad (@ZhugeEX) September 20, 2019
According to the document, Digital Bros. gave roughly 55% of this payment to 505 Games, which we then imagine was trickled down to the other departments. To put this in a mathematical perspective, Control is a new AAA title that retails at $59.99. At $10.44 million, 505 Games would be able to ship around 175,000 copies of the game. If they had decided to sell the game through Steam, which takes a 30% cut on any games that have a less than desired revenue, they would have to sell roughly 227,000 copies to make the $10.44 million.
The excerpt below describes the transaction obtained through the exclusivity deal. While they don’t outright state that it was with Epic Games, it’s been a well known fact for a long time now that the game would be exclusive on the Epic Games Store. The paragraph from the document after being translated states:
The revenues deriving from the personal computer version of the video game Control were significant. It is a product developed together with the Finnish company listed on the Nasdaq First North, Remedy Entertainment. The game in different versions, for personal computers and consoles, was launched on the 27th August 2019, but the contractual structure with the digital marketplace that required the exclusivity of the video game of the personal computer version has allowed the recognition of revenues already starting from this exercise.
To further this, Digital Bros. has included a chart that outlines their total revenue up to June 30th. Control ‘s earnings stand at the 9.49 million Euro mark, which is odd considering that the game didn’t launch until August 27. The answer is more than likely that these earnings were directly contributed by Epic Games per the exclusivity agreement.
Considering all of the variables and chances that they’d be taking with other outlets, and the amount of money they were paid well ahead of time, it’s no surprise that Digital Bros. made the decision to give Epic Games exclusivity for Control. While it’s too early to tell if the game is considered profitable, the lump sum of 9.49 million Euro’s is most certainly a safety cushion for all parties involved with the project. It also helps that the title has been reviewed fairly well so far, and the DLC Roadmap has been revealed, showing a plentiful post-launch plan by Remedy.
Let’s not forget that when that 1-year exclusivity deal is done, Control will most likely be released on Steam for a second helping of profits for Digital Bros., albeit not nearly as much with Epic Games. This recent insight has provided us with quite a bit of information, as this is a good indicator of what Epic Games has been offering other developers for their IP’s. We’d shudder to think what the deal was for 2K and Gearbox for Borderlands 3, as that was most likely a much, much higher price to obtain that monster of a game.