Epic's $1M Developer Incentive

Epic is using store economics as a customer acquisition weapon, not a profit center. By letting developers keep the first $1M per game per year on Epic processed payments, then charging 12% after that, Epic makes the store especially attractive to smaller and mid sized studios, while also stacking an extra benefit for Unreal developers who avoid the engine royalty when they sell through Epic Games Store.

• The contrast with Steam is stark. Steam still charges 30% on the first $10M of sales, then 25% and 20% at higher tiers. Epic offers 0% up to $1M each year, then 12%, which gives a new launch far more room to earn back development and marketing spend before the platform takes a cut.
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• This is expensive by design. Epic Games Store lost $181M in 2019 and $273M in 2020, and third party spending through Epic Payments was $255M in 2024, down 18% year over year. The store is being subsidized to pull developers and payment volume into Epic's broader ecosystem.
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• The payment piece matters beyond the PC storefront. Epic now extends this same infrastructure through Web Shops, which let developers sell in game items directly across mobile and PC, and ties purchases into Epic Rewards. That turns store pricing into a wedge for a larger payments and distribution network.
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The next step is a broader unbundling of app store billing and distribution. As Epic pushes Web Shops, mobile store distribution, and direct payments, the first $1M free tier can become the on ramp that gets developers onto Epic's rails first, then into Unreal, Fortnite, and the rest of Epic's commerce stack over time.