What’s that old saw? The old world is dying, and the new world struggles to be born. Now is the time of layoffs.
Fortnite, developed by Epic Games, is one of the most popular and successful video games of all time. Though the game’s player count has waned since 2022—from many millions of daily active players to a slightly smaller many million person figure—it has incumbency on its side: Fortnite sits securely in a pantheon of franchises that cumulatively occupy between 30 and 40 percent of video game players’ engagement hours, according to data compiled by analyst Matthew Ball.
Still, on March 24, Epic CEO Tim Sweeney announced that the company would be laying off over 1,000 staffers. By some counts, the video game industry suffered 9,200 layoffs in 2025. Some back of the envelope math would suggest that Epic’s latest cuts represent more than 10 percent of last year’s total layoffs, a staggering figure to come from just one source. “The downturn in Fortnite engagement that started in 2025 means we’re spending significantly more than we’re making, and we have to make major cuts to keep the company funded,” Sweeney wrote in a note to staff that was shared on Epic’s website.
For years, the too-easy joke about live service games launched in Fortnite’s wake was that executives at rival studios were nakedly chasing a Fortnite of their own—and they were. The money was too good to not take a stab at it. According to documents released as part of Epic’s legal battle with Apple over whether the phone-maker was running a monopoly in its App Store, the developer’s net income hit an astonishing $2 billion owing to Fortnite in 2018, the game’s first full year on the market. That figure would drop precipitously—to $546 million and $302 million in the following two years—but the allure to others was obvious.
We know now the fruits of those efforts, the cemetery of battle royale games, live service titles, and even studios that bet it all on sustained user engagement, only to find that the market had eluded them. The conventional wisdom, then, flipped on its head. Fortnite was the reason these companies chased the live service trend in the first place, but it was also a gatekeeper, the reason so many of its competitors failed. Fortnite had become the game for too great a number of players, and the cost of luring them away was too steep. And yet, as it turned out, even Fortnite’s great success could not save the hundreds of workers laid off from Epic Games in the past few years. (Epic laid off 16 percent of its staff in 2023. In his letter to staff then, Sweeney responded to the question “Will there be more layoffs?” with a firm—and, in retrospect, premature—“No.”)
Sweeney alluded to “industry-wide challenges” in his explanation of the problems facing Epic Games: “slower growth, weaker spending, and tougher cost economics; current consoles selling less than last generation’s; and games competing for time against other increasingly-engaging forms of entertainment.” None of the major players in the space have come away unscathed. Microsoft laid off over 15,000 employees in 2025, with an unspecified number of those coming from its gaming division; the cuts coincided with numerous project cancellations. Earlier this month, Electronic Arts cut staff working on its Battlefield franchise, despite the latest entry, Battlefield 6, being the best-selling game of 2025. All of the major console makers have announced price increases, including a $100 price hike to PlayStation 6 devices announced Friday.
The scary thing is that Fortnite, as far as games go, seems to be doing okay. Its player count is declining but still unassailably high. If you view Fortnite as a bellwether, there’s real cause for alarm. You can’t do targeted cuts of over 1,000 people. That is not a measured response to a rough patch, nor a careful evaluation of priorities and costs. Epic is battening down the hatches. What hope does anyone else have? “The video game industry is in bad shape right now, a trend exemplified by the struggles of its biggest players” is as sober a take as any. But it also elides the uniquely Sweeney-ian flavor of Epic Games’ ongoing funk.
Off the back of Fortnite’s initial successes, Epic became a vessel for Sweeney’s ideological preoccupations: chiefly, an interoperable, more open internet, with greater built-in opportunity for upstart companies to take on the incumbents. Cast your mind back five years, and you might recall that while everyone else was trying to build Fortnite 2, Epic was pitching itself as building Internet 2—in tech parlance, the metaverse.
This was a costly pivot for Epic and for some of its employees, involving major lawsuits against some of the world’s biggest companies, the heavy subsidization of a new video game storefront, and a spree of acquisitions that were headscratchers even in the moment. (Remember Houseparty? Of course you don’t.) After two layoffs of 1,800 people in three years, and a spate of divestitures and shuttered projects, it’s worth asking if these costly bets were worth it, or if there was even a “there” there to begin with. It’s a little tough to swallow the vision of Epic shepherding us toward Internet 2 in the context of these failures.
Is an internet oriented around text and multimedia uploads the end-state of only human interconnectivity? Probably not. Maybe the internet does need some shaking up. Are Google and Apple representative of a rent-seeking old guard, whose fee collection practices grant sinecures to hundreds of thousands of mediocre middle managers? Sure, that seems fair. I’m not opposed to some legal class treason. But the human cost of these fights has been severe (the big losers have been, time and again, Epic’s own employees) and suggestive of an executive suite incapable of planning for the future—or worse, one holding an unfounded belief that Fortnite could somehow defy the gravitational pull of time and age and popularity.
“What we now need to do is clear,” Sweeney told employees. “Build awesome Fortnite experiences with fresh seasonal content, gameplay, story, and live events.” In a way, it’s a little funny to hear Sweeney talking about Fortnite in such straightforwardly game-like terms. “Fortnite is a game,” Sweeney tweeted in 2019. “But please ask that question again in 12 months.”
Not to be reductive or cruel, but in 2026, Fortnite is a battle royale with skins and brand partnerships and a user generated content ecosystem. It might have saved the workers at Epic a little bit of trouble if Sweeney had recognized sooner that what he had on his hands was an extraordinarily and anomalously successful video game company, not an internet infrastructure insurgency. Now, Sweeney stands to lose both. Epic has shed thousands of highly skilled workers into a market straining under a glut of workers; some may be forced out of the industry entirely. The construction of the internet of tomorrow, meanwhile, is being spearheaded by companies with explicit ideological goals relating to the halting or management of human extinction, or the complete disruption of labor as we know it—a far cry from the open marketplace of interoperable apps and experiences envisioned by Sweeney.
The video game industry is in bad shape, but Epic’s problems aren’t the industry’s problems. They can be traced to the very top of the org chart—and the part of the company that won’t face consequences for its mistakes.
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