Analyst Warns Epic Layoffs Signal Trouble: “If Fortnite Fails, What Hope Do Other Games Have?”
Another day brings more troubling news from the gaming world, as Epic Games has announced plans to lay off over 1,000 employees. This decision stems from a “downturn in Fortnite engagement that started in 2025,” along with the usual “industry-wide challenges” that executives often cite. Epic’s CEO, Tim Sweeney, noted in a blog post, “We’re spending significantly more than we’re making.” While it might seem that a decrease in playtime for Fortnite isn’t necessarily alarming, the situation is more nuanced.
Data from Statista reveals that Epic Games raked in $6.01 billion in revenue in 2025, and Fortnite still leads in player engagement on both PlayStation and Xbox. Analyst Mat Piscatella from Circana pointed out that while there has been a decline in average hours played by US Fortnite players on these consoles, it remains the game with the highest monthly active users across both platforms. So, despite recent dips, Fortnite hasn’t lost its top spot in the console gaming landscape.
Sweeney’s remark about spending more than the company earns caught Piscatella’s attention as a key reason behind the layoffs. This raises the question: where is all that Fortnite revenue going? While the exact details are unclear, Sweeney’s blog hints at a few factors.
He mentioned that ongoing legal disputes with Apple’s App Store could be contributing to Epic’s financial struggles, alongside a few less-than-stellar seasons of Fortnite. “We’re only in the early stages of returning to mobile and optimizing Fortnite for the world’s billions of smartphones; and in being the industry’s vanguard, we have taken a lot of bullets in a battle that is still in its early days of paying off for ourselves and all developers.” Sweeney has previously shown a casual attitude toward losing hundreds of millions on the Epic Games Store to reclaim market share from Steam.
Sweeney also stated, “Since it’s a thing now, I should note that the layoffs aren’t related to AI,” yet he offered little insight into how AI is utilized at Epic or within Fortnite itself. He mentioned, “To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can.” This suggests that Epic is indeed leveraging AI to enhance productivity and support developers, but the layoffs are definitely “unrelated.” Sure thing!
There’s a lot we still don’t know—and may never fully understand—about the timing of these layoffs. However, if Fortnite is truly facing sustainability issues, it could signal broader concerns for the gaming industry.
Piscatella pointed out, “The big live-service behemoths (including Fortnite) occupy a significant share of player count and time on consoles. The top 10 live-service games on PlayStation and Xbox account for nearly half of all US gaming hours on these platforms each month.” This raises a critical question: if Fortnite can’t thrive, what does that mean for other games? Unfortunately, there are no clear answers to that question—no good ones, or even bad ones.
