U.S. Video Game Industry

Epic Games, the North Carolina–based maker of Fortnite, is laying off more than 1,000 employees as CEO Tim Sweeney says the company’s spending has outpaced revenue amid "extreme" market conditions and declining engagement with its flagship game. In a blog post Tuesday, Sweeney blamed weaker consumer spending and sluggish demand for new consoles, as well as rising competition from other forms of entertainment, and said Epic has identified more than $500 million in cost savings to stabilize its finances. He explicitly rejected a growing corporate trend of tying job cuts to artificial intelligence, writing that these layoffs are "not related to AI" and that Epic still wants "as many awesome developers" building content and technology as possible. The company is working to better optimize Fortnite for mobile platforms, where more users are shifting their screen time, and says laid-off workers will receive at least four months of base pay and six months of U.S. health coverage. The move underscores mounting pressure across the gaming industry as even top-grossing titles struggle to keep players’ attention in a fractured entertainment market.