When Fortnite Battle Royale launched in November 2017, its rapid popularity catapulted Epic Games into a domineering position in the video game industry, where live-service titles quickly became the biggest trend in gaming.
But in 2026, Epic Games became the face of the global industry’s ongoing job cuts when the North Carolina-based developer cut 1,000 roles — 20% of the company — its first major wave of layoffs after eliminating 800 positions in 2023.
The company’s rationale for the mass layoffs was declining Fortnite engagement levels, which were once robust enough to place the title alongside the sector’s most popular games, including Roblox, Call of Duty, Minecraft and Grand Theft Auto. However, Epic Games is far more than just Fortnite, and that’s precisely the problem.
Before Fortnite, Epic Games was primarily known for its Unreal game engine, used widely across the industry and by Hollywood studios such as Disney for virtual production purposes, as well as for developing the Gears of War series, which is now made in house at Microsoft’s Xbox Game Studios.
As Fortnite took off, Epic Games embarked rapidly into new business areas, becoming a publisher of such third-party games as Alan Wake 2, acquiring live-service studios including Fall Guys’ Mediatonic, launching a storefront for PC games meant to compete with Valve’s Steam and even acquiring the music platform Bandcamp in 2020 during the pandemic.
But the rapid diversification has not worked out well. Epic Games’ job cuts in 2023 included the entirety of Bandcamp, which was sold off to a new buyer, demonstrating a strategic failure to incorporate music streaming into Fortnite’s online experiences, despite years of virtual concerts that drew millions of viewers.
The company’s ability to pull in around $6 billion in revenue in a good year had been hampered when Epic Games’ founder and CEO, Tim Sweeney, took it upon himself in 2020 to directly challenge Apple and Google’s stranglehold of mobile revenue on the App Store and Google Play Store, respectively.
This led to Fortnite’s ouster from iOS and Android devices for several years as the companies went to court over whether it was illegal for the tech giants to block third-party payment options outside of apps to skirt the 30% cuts of in-app purchases that are commonplace. While Epic Games achieved wins there, Apple is still contesting the decisions and Fortnite didn’t return to smartphones until last year.
With mobile gaming revenue accounting for roughly half the entire gaming market for many years now, getting the boot from mobile was a self-sustained wound Epic Games is still smarting from as Fortnite engagement succumbs to the whims of the wider market and younger consumers age out of target demographics. Even if Fortnite never left phones, it might still be struggling, as mobile company Playtika cut 500 roles this year, the second largest layoffs of any company in gaming.
A big silver lining for Epic Games remains its partnership with Disney, which invested $1.5 billion into the company two years ago to explore in-game Fortnite experiences based on Disney IP, including a dedicated section of Fortnite to function as a Disney universe, which has yet to launch. This level of investment is more than the $1 billion Disney put into OpenAI in December after the launch of its Sora video app, which has since been reversed after the app shut down.
There are no indications Disney is considering a similar reversal for its partnership with Epic Games, but the stakes are clear: In a market as challenged as video games, sustainability is the main goal.
The removal of 1,000 jobs at Epic Games is a dramatic course of action undoubtedly meant to streamline a sensible business model amid the pressure of a company like Disney looking over its shoulder.
