Epic Games CEO Tim Sweeney stepped onto the stage at yesterday’s State of Unreal event and sounded a kind of rallying cry to the industry. He described the moment as one of “both challenge and also potential.” Curious where that promise might be hiding? We’ll get back to it soon.
He wrapped up his remarks by pointing to the “immense” number of games—major blockbuster releases—that he sees launching, yet still “struggling” to pull in audiences big enough to keep those titles profitable for the long haul.
“We’re frequently seeing development budgets climb into the hundreds of millions of dollars, only for revenue to land in the tens of millions, and these figures are still rising,” Sweeney said as he began. “To many, it looks like a tidal wave is crashing over the triple-A gaming industry.”
“On the bright side, there’s a new wave of players coming in with different tastes, and they’re showing up and engaging more than any prior generation,” Sweeney added. “Top performers like Fortnite are thriving again. Still, beneath that optimistic picture, triple-A studios face a major hurdle—many of today’s big new game launches are failing to land.”
In his view, part of the problem comes from generational changes in how people relate to games and the types of experiences they want. He also believes games are becoming more social by design.
“In the past, it worked like this: you picked a game, downloaded it, and either played alone or jumped into multiplayer with strangers. Now, it’s far more about meeting up with friends and coordinating together online—whether that means playing a title or checking out an experience.” This tends to reward “well-established” games, he noted—likely why PlayStation’s five most-played titles in the US for 2025 matched the same set from 2024: Fortnite, Call of Duty, Grand Theft Auto 5, Minecraft, and Roblox, though the order shifted.
Among those, Roblox seems to especially bother Sweeney, possibly because it competes directly with the user-generated style of play that Fortnite also supports.
“One possible direction for the future is that Roblox grows and ends up dominating gaming,” Sweeney argued. “People are even saying this online. What you have there is a centralized hub with a single ‘gatekeeper’ that turns everything into a commodity—and takes more than 70 percent of the revenue produced by its 450 million users. That creates a real challenge for game creators,” he continued.
Sweeney also points to a shift in the gaming marketplace, where players are increasingly buying in-game items instead of purchasing the games themselves. On top of that, games are competing for attention with social platforms like TikTok, which further shapes the landscape.
“The last major trend affecting gaming is that the market for players’ attention has become extremely competitive—more than I’ve seen before,” Sweeney said. “We were up against mediocre television and other forms of entertainment. Today, there are all kinds of social media platforms, plus prediction markets that verge on the ridiculous—every one of them is fighting for people’s time, and they’re doing it very effectively.”
Not surprisingly, Sweeney’s idea of a “brighter future” centers on Epic’s approach—especially the Unreal Engine—which he believes could help connect and unify the gaming industry.
“We all need to rethink how we build,” Sweeney went on. “We have to make better games. We should develop them more effectively. We need to plan ahead and build for connected games, where our player communities are linked socially and our in-game economies are tied together. With that, players won’t treat everything as separate products—they’ll see a broader global ecosystem where game developers work together.”
In fact, Epic wants to be the first to prove that idea in practice. At the same event, the company also discussed Unreal Engine 6, which it says will let Fortnite skins and assets be used in other games—and the other way around too. These so-called “smart assets,” designed to work beyond Fortnite, aim to support compatibility across different games as long as they run on Unreal Engine.
Epic Games isn’t immune to the broader difficulties facing the industry either. The company cut more than 1,000 developers in March. More recently, Epic expanded to handle Fortnite’s rapid growth, but a drop in player engagement with Fortnite helped set the stage for those layoffs. Around that same time, Sweeney also pointed to issues affecting both the industry as a whole and Epic specifically—such as the slowdown in console hardware sales.