Epic and Game Pass deals diminishing for indie devs: "Maybe another paradigm shift is waiting for us"

It has always been hard for smaller developers to get funding or make sure that their games don’t flop in the oversaturated market. However, things could get even bleaker, with Xbox and Epic Games reportedly cutting the size of deals they are offering.

Darkest Dungeon II

• In an interview with PC Gamer, the developers of Slay the Spire and Darkest Dungeon shared their thoughts on the current state of once-lucrative exclusive deals and the overall investment climate.
• According to Mega Crit co-founder Casey Yano, at least five small indie teams he spoke with complain about cuts or cancellation of funding and partnerships.
• “It sounds like it’s s**t,” he said. “We’re definitely very privileged to be able to self-fund. [Otherwise] I’d be very, very, very scared right now.”
• Chris Bourassa, co-founder of Red Hook Studios and creative director on Darkest Dungeon, noted that deals for getting games on Game Pass or exclusivity on the Epic Games Store have significantly decreased in size and become less substantial for indie developers.
• “The Gold Rush is over,” he said. “I come from the Northwest Territories. The town I’m from was built on gold, and then they found diamonds further north. Maybe another paradigm shift is waiting for us, but I definitely think the scale of the deals I’m hearing about is significantly [diminished] from the big swinging days. Certainly we got our Epic [deal] at the right time.”

Microsoft has partnered with hundreds of developers and publishers of all sizes over the years to increase the number of Game Pass subscribers. Some games are added to the service at launch, with the company spending millions, sometimes hundreds of millions, on those deals. According to an unredacted court document leaked as part of the FTC v. Microsoft case, Xbox was ready to pay up to $300 million to add Star Wars Jedi: Survivor to Game Pass and even valued a potential deal for Baldur’s Gate 3 at just $5 million.

Epic Games has also spent tons of money on exclusive deals with game developers. For example, it paid $210 million in minimum guarantees during the first wave of EGS exclusives in August 2019. As a result, the store remained unprofitable as of November 2023, with the company saying that its combined loss could reach $965 million by 2027.

These deals have helped many indie developers secure guaranteed revenues for their games even before launch. Even studios within large corporations had a chance to make smaller, risky projects. Obsidian design director Josh Sawyer said that Pentiment owes its existence to Game Pass, freeing devs from having to worry about ROI.

Some creators, however, are more skeptical about such services, with DUSK creator David Szymanski saying that “if it or any similar subscription service overtook the current store model, I’m pretty sure that would be the end of the indie market as we know it.”

Either way, it appears that Xbox and Epic are becoming less generous with their offers. And studios will have to find new ways to secure funding and get their games to audiences. That’s why creators behind Darkest Dungeon, Slay the Spire, Vampire Survivors, and other indie hits recently announced the Triple-i Initiative, which has turned out to be a digital showcase of 30+ titles taking place on April 10.