Epic Games' 0% Revenue Share on First $1 Million: A Game-Changer for Developers and the Gaming Industry
In a groundbreaking announcement, Epic Games revealed a new revenue policy for its Epic Games Store (EGS) that allows developers to keep 100% of their revenue on the first $1 million earned per game annually, effective June 2025. This move marks a significant shift in the digital distribution landscape, reinforcing Epic’s ongoing mission to challenge the status quo and support developers, particularly smaller indie studios. But what does this mean for the gaming industry, and what events paved the way for this decision? Let’s dive into the details.
The New Policy: A Game-Changer for Developers
Starting in June 2025, Epic Games will waive its 12% revenue share for the first $1 million in annual sales per app on the Epic Games Store. Once a game surpasses this threshold, the standard 88/12 revenue split (88% to developers, 12% to Epic) will apply. This policy applies on a per-app basis, meaning developers with multiple titles can benefit from the $1 million exemption for each game. Additionally, Epic is introducing “webshops” hosted by the EGS, allowing developers to offer out-of-app purchases as a cost-effective alternative to in-app purchases on platforms like Apple and Google, which often charge higher fees.
This developer-friendly approach is poised to have a profound impact, especially for indie developers. For small studios or solo creators, retaining 100% of their revenue up to $1 million could mean the difference between breaking even and reinvesting in new projects. As one indie developer noted on a forum, this policy “makes me almost consider putting [my game] on Epic,” highlighting the appeal for smaller teams who previously leaned toward platforms like Steam or Itch.io for lower fees or easier integration.
Why This Matters for the Industry
Epic’s new policy is a direct shot at competitors like Steam, which maintains a tiered revenue model: 30% for the first $10 million in lifetime sales, 25% for sales between $10 million and $50 million, and 20% for sales exceeding $50 million. This structure has been criticized for favoring larger developers, a point Epic CEO Tim Sweeney emphasized in a 2018 email to Valve, calling out their “30% for the little people” approach. By contrast, Epic’s 0% cut on the first $1 million is a clear win for smaller developers, potentially drawing more indie titles to the EGS and fostering a more diverse game library.
The policy could also reshape consumer behavior. With developers keeping more revenue, they may pass savings to players through lower prices or reinvest in higher-quality games, spurring innovation. Epic’s webshop feature further empowers developers to bypass the 15-30% fees charged by Apple and Google for in-app purchases, potentially making mobile gaming more affordable and accessible. This aligns with Epic’s broader vision of challenging “walled gardens” like Apple’s App Store and Google’s Play Store, which Sweeney has long criticized for their restrictive policies.
However, the policy isn’t without challenges. Some developers worry about the logistical hurdles of listing games on multiple platforms, particularly for multiplayer games where Steam’s robust integration remains a draw. One indie developer expressed reluctance to split their player base across Epic’s and Steam’s online subsystems, underscoring the trade-offs of platform fragmentation. Additionally, while Epic’s store has grown to over 4,000 titles and 295 million users in 2024, it still lags behind Steam’s massive 132 million monthly active users and 19,000 new games added annually. Epic’s policy may attract more developers, but converting Steam loyalists remains a hurdle.
The Road to This Decision
Epic’s journey to this policy began with the launch of the Epic Games Store in 2018, which disrupted the industry with its 88/12 revenue split compared to Steam’s 70/30 standard. This move was part of Epic’s strategy to challenge Valve’s near-monopoly in PC game distribution, fueled by the massive revenue from Fortnite and Unreal Engine royalties. In 2011, Epic waived royalties on the first $50,000 in sales for Unreal Engine projects, a threshold raised to $1 million in lifetime sales by 2020. These early steps signaled Epic’s commitment to supporting smaller developers.
The EGS’s growth has been steady but costly. Epic has invested heavily in exclusives, free game giveaways (nearly 600 million claimed in 2024), and minimum guarantees, reportedly losing $400 million in 2020 alone. Despite these losses, Epic’s financial muscle—bolstered by Fortnite’s $9 billion in revenue from 2017-2019 and a $31.5 billion valuation in 2022—has allowed it to sustain this aggressive strategy. Court documents from the Epic v. Apple lawsuit revealed the EGS wasn’t expected to turn a profit until 2023, yet Epic views these investments as critical to gaining market share.
Legal battles have also shaped this policy. Epic’s 2020 lawsuits against Apple and Google over in-app purchase restrictions led to a 2025 ruling that forced Apple to loosen its App Store policies, allowing third-party marketplaces like Epic’s webshops. This victory, coupled with a €500 million fine against Apple by the European Commission, emboldened Epic to expand its developer-friendly initiatives, particularly for mobile platforms.
Epic’s “First Run” program, launched in 2023, offered 100% revenue for six months in exchange for exclusivity, but its restrictive terms limited its appeal. The new 0% fee policy, announced in May 2025, is a broader, non-exclusive evolution of this program, reflecting Epic’s response to declining third-party game spending on the EGS for two consecutive years. Tim Sweeney’s posts on X in May and June 2025 highlighted a “big influx of indie developers” preparing to launch on the EGS, suggesting the policy is already gaining traction.
Industry Impact and Future Outlook
Epic’s policy could redefine the competitive landscape. By removing financial barriers for smaller developers, it may attract a wave of indie titles, enriching the EGS’s catalog and appealing to players seeking unique experiences. Posts on X from developers and industry observers, like @JakeSucky and @grok, underscore the excitement, with some calling it a “big motivation for indie developers” who might otherwise rely on platforms like Itch.io. However, critics argue Epic’s motives are less altruistic, viewing the policy as a strategic move to bolster its market position against Steam and mobile app stores.
For consumers, the policy could mean more affordable games or enhanced content, as developers reinvest their earnings. Yet, Epic’s clunky launcher and history of exclusivity deals have left some gamers skeptical, with one Reddit user calling it a “PR stunt” and others expressing loyalty to Steam’s ecosystem. Epic’s challenge will be to improve its storefront’s user experience and convince players to embrace its platform.
Looking ahead, Epic’s focus on indie developers aligns with its long-term vision of a decentralized, creator-driven gaming ecosystem, akin to Roblox. By supporting smaller studios and integrating webshops, Epic is positioning itself as a champion of open platforms, potentially reshaping how games are distributed and monetized. However, its success hinges on overcoming consumer resistance and scaling its user base to rival Steam’s dominance.
Conclusion
Epic Games’ decision to eliminate revenue fees on the first $1 million per game annually is a bold step toward empowering developers and challenging industry giants. Rooted in Epic’s history of developer-friendly policies and legal victories, this move could spark innovation, attract indie talent, and pressure competitors to rethink their revenue models. While challenges like platform fragmentation and consumer loyalty persist, Epic’s strategy signals a future where developers have more financial freedom to create, potentially transforming the gaming industry for years to come.