That’s folding money — Money likely came as advance against earnings ahead of Epic Games Store sales. Kyle Orland – Sep 20, 2019 8:15 pm UTC Those floating bodies? Yeah, they’re everywhere. And sometimes they fight back. Telekinesis may not be a real thing, but in Control, it’s really fun. When possessed enemies are defeated…
At this point, we know Epic is committed to paying a lot of money for exclusive games to attract players to its Epic Games Store. Now, we seem to know how much it paid up front for at least one of those exclusives: €9.49 million (about $10.45 million at today’s exchange rates).
The EGS exclusive in question is Remedy and 505 Games’ supernatural shooter Control, and the number in question comes buried in an Italian earnings report from 505 Games parent company Digital Bros. (as noticed by analyst Daniel Ahmad). That figure is listed in two tables in the document, corresponding to total revenue from Control and total revenue from the Epic Games Store, both for the period ending June 30, 2019.
“Revenue come[s] from the computer version of Control,” the report reads, according to a rough translation of a portion of the document. “The game was released on August 27 but the structure of the marketplace who requested the PC exclusivity has made possible to gain the revenue starting from this quarter.”
“We don’t comment on the terms of our deals,” an Epic Games representative told GameDaily in response to a request for comment. “Everyone should play Control; it’s really good.”
Back in July, Ooblets developer Glumberland revealed via blog post that the money it received up front from Epic represented “a minimum guarantee on sales that would match what we’d be wanting to earn if we were just selling Ooblets across all the stores.” Epic’s Sergei Galyonkin has also said that Epic’s exclusivity deals tend to be structured as minimum guarantees against future sales.
Assuming Digital Bros. got a similar deal, that means the publisher won’t make any additional money from Epic Games Store sales of Control until it earns back the €9.49 million upfront payment. For context, at $60 per sale and Epic’s standard 88% revenue share, Control would have to sell roughly 200,000 PC copies for Digital Bros. to meet that minimum (or more if the average sales price comes down due to discounts). Guaranteeing that revenue up front, though, helps Digital Bros. avoid uncertainty in its balance sheet and, in turn, helps Epic bring in new customers to its growing storefront.
Back in 2017, Digital Bros. revealed that it would be paying a royalty of 45 percent of net sales from Control to the developers at Remedy. And last month, Remedy CEO Tero Virtala said the company spent between €20 and €30 million ($22 to $33 million) to develop the game, which is also available on Xbox One and PS4.
“It’s been about three years now and at the peak of production we had about 100 developers on average,” Virtala added. “I can’t give you the exact number, but within one-to-two million units, we will have broken even. After that we are profitable.”