Analyst ties Epic’s layoffs to Fortnite’s slowdown and broader industry shifts

An industry analyst is arguing that Epic Games’ recent layoffs aren’t just about one bad quarter or even Fortnite alone. In a new opinion piece, SuperData co-founder Joost van Dreunen says Epic’s downturn reflects a wider change in the games business, including weaker post-pandemic demand, rising development costs, and stronger competition from outside the US.

That take follows Epic’s recent cut of roughly 1,000 jobs. Van Dreunen points to Fortnite in particular, saying the battle royale’s peak cultural pull may be fading, while the broader market around it has changed. His argument is that US game companies are now dealing with a tougher global landscape than they were a few years ago.

Van Dreunen also blames a mix of structural and economic issues. He calls out the power held by major digital storefronts, higher operating costs in the US, and policy decisions that can make hiring and retaining talent harder. He also argues that developers in other regions have gained ground as those markets grow and adopt new tools more aggressively.

Some of that is clearly open to debate, especially where he gets into bigger claims about American games losing leadership and the role of technologies like generative AI. But the core point is pretty straightforward: Epic’s problems may be part of a larger correction, not just a company-specific stumble.

For Fortnite players, there’s no immediate product news attached to this. It’s mostly a read on why Epic is under pressure right now, and why the company’s recent layoffs are being viewed as part of a broader industry shift instead of an isolated event.

My take is much simpler. Despite the layoffs, Fortnite remains extremely profitable in 2025 and 2026. In fact, it was profitable every year since its launch. The problem at Epic is that Fortnite profits were used to fund Epic Game Store losses, which are estimated at over $1 billion a year. How do we know this? Epic’s own official income statement (disclosed in a lawsuit) from 2019 show just how absurdly profitable Fortnite was and revenue estimates for recent years are much higher.