GAMING & ENTERTAINMENT: Fortnite fatigue, a costly legal war, and a generation of young people quietly changing their gaming preferences. Here’s what the headlines are missing.
First, to Those Affected
Over 1,000 people on the Epic team, engineers, artists, designers, producers, writers, community managers, received news last week that they were being let go. To everyone affected, I’m sorry. The talent lost is real, and the institutional knowledge and creative energy that walks out the door will be felt. If I can be of any help, please reach out.
Now, for the broader conversation this moment demands.
Last Tuesday’s announcement that Epic Games is cutting over 1,000 employees, roughly 20% of its workforce, while targeting $500M in additional cost cuts isn’t entirely surprising if you’ve been watching closely. But it is a significant moment for the industry.
CEO Tim Sweeney’s memo was blunt: “The downturn in Fortnite engagement that started in 2025 means we’re spending significantly more than we’re making.” Let’s unpack that.
The Fortnite Problem Is the Everything Problem
Epic has had one major engine driving revenue: Fortnite. That’s been both their greatest strength and their Achilles’ heel. When engagement slows, there’s no other revenue center to compensate.
Unreal Engine earns Epic prestige and developer mindshare, but it isn’t a meaningful profit center. We estimate the Unreal portion of Epic’s business at roughly $270 million, compared to Fortnite revenue of $3 to $4 billion. Epic makes its money from Fortnite’s in-game economy. Full stop. The company even raised the price of V-Bucks recently, acknowledging that the cost of running Fortnite has climbed significantly. Raising prices into declining engagement is a very difficult position to sustain.
The Legal Wars Were Costly In More Ways Than One
Epic’s multi-year antitrust crusade against Apple and Google was bold, principled, and expensive. Sweeney acknowledged in his memo that “in being the industry’s vanguard we have taken a lot of bullets in a battle which is only in the early days of paying off.” The wins were real. Fortnite is finally returning to mobile. But the cost in dollars, leadership bandwidth, and internal culture can’t be overlooked. When senior leadership is consumed by litigation, product innovation suffers. And product innovation is the only thing that keeps a live-service game alive.
While Epic was locked in its court battles, Fortnite was locked out of the App Store. For years, one of the world’s most popular games was simply unavailable on iOS, the most lucrative mobile platform on the planet. That absence had a compounding effect that is only now becoming fully visible in the engagement numbers.
Roblox Won the War While Epic Was in Court
Here’s what I think is the most underappreciated part of this story: while Epic was distracted, Roblox quietly captured the youth gaming market.
- Roblox has 150M daily active users
- Players spent over 10 billion hours per month on Roblox, compared to Fortnite’s under one billion
- Roblox’s daily active user count grew 69% in 2025 alone
- The platform accounted for 67% of the entire gaming industry’s growth outside of China
- 380 million monthly active users; 151.5 million daily active users (70% growth YoY)
- 44% of users are over 17; 56% are younger, with a near-even gender split
- APAC leads with 29.5% of users, followed by US and Canada (28%) and Europe (23%)
A single Roblox game, Grow a Garden, an idle gardening simulator, broke Fortnite’s all-time concurrent player record, reaching over 16 million simultaneous users against Fortnite’s previous record of 14.3 million.
Roblox posted nearly $4.9 billion in revenue in 2025, up 36% year over year and it is still climbing. Meanwhile, Epic is cutting 20% of its workforce because spending has outpaced revenue. These trajectories are moving in opposite directions.
Mobile tells the story most clearly. 80% of Roblox’s users are on mobile, and the platform remained continuously available and ranked #1 in the App Store’s adventure category throughout the years Fortnite was legally barred from iOS. Fortnite’s absence from mobile during its peak growth years wasn’t just a missed revenue opportunity. It was a generational handoff. The kids who discovered gaming on their phones during that window didn’t discover Fortnite. They discovered Roblox. And habits formed at age 10 are hard to undo at age 14.
The developer migration is also accelerating. With Roblox paying out hundreds of millions annually to its creator community, crossing $1 billion in quarterly revenue, and now launching a new developer incubator program, the economic case for building on Roblox versus Fortnite’s UEFN tools is increasingly one-sided.
Young People Are Going Somewhere Else
Beyond the platform wars, there’s something deeper happening that isn’t getting nearly enough attention, and it should be making every gaming executive genuinely nervous.
I’ve been conducting in-depth interviews with children and young adults as part of a broader research effort. The shift I’m seeing isn’t about which platform kids prefer. It’s more fundamental than that.
Young people are moving away from scripted, passive gaming, not toward a different game, but toward a different kind of engagement altogether. Some call it “analog-adjacent,” but I don’t love that phrase. It undersells the deliberateness of what these young people are doing. There’s nothing shallow about it. They’re starting virtual book clubs, learning instruments, taking up knitting, and going birdwatching. Young Gen Z and Millennial men (ages 18 to 43) are now the fastest-growing demographic on Pinterest, a platform that’s been around for over a decade, actively curating their interests and personal aesthetics. They now make up roughly one-third of all Pinterest users globally.
The young people I’ve interviewed range from 8 to 20 years old, and the pattern is consistent across all of them.
One 18-year-old described himself as a former “gaming fiend” who simply stopped playing, not because games became unavailable, but because real-world making became more compelling. A 16-year-old who once played Fortnite and Overwatch extensively told me she’d rather go do things in real life. These aren’t outliers.
What’s emerging is a generation that doesn’t want to play someone else’s story. They want to build their own. The sandbox model, Minecraft’s creative mode, Roblox’s creator tools, isn’t a niche preference. It appears to be the primary mode of engagement for the next wave of young users. Traditional scripted gaming looks to be experiencing a structural decline among the youngest cohorts, not a cyclical one. And almost no one in the industry is paying attention to it at the scale it deserves.
I’ll be publishing a deeper dive on this research later but I think it reframes the entire conversation about where youth engagement is actually heading.
Built from the Top Down vs. Built from the Bottom Up
This divergence between Epic and Roblox isn’t accidental. It reflects two fundamentally different philosophies of platform building.
Epic built from the top down. Unreal Engine started as a proprietary tool for high-end 3D games, state-of-the-art graphics, cutting-edge rendering, designed for professional studios making AAA titles. The technology has always been exceptional. But it was conceived for the top of the market. Fortnite itself embodies that philosophy: a polished, high-fidelity, curated experience built by professionals for players to consume.
Roblox built from the bottom up. It started as a simulation tool designed to teach children about physics, block-based, accessible, deliberately simple. It wasn’t built for the industry; it was built for kids. And from that foundation, it grew into the most engaging gaming platform on Earth, not because it was technically superior, but because it gave its users the power to build. The median age of a Roblox developer today is fourteen.
In a world where the creator economy is only growing and more young people want to make their own games and tell their own stories, Epic’s top-down architecture is a structural liability. Roblox’s bottom-up foundation is a structural asset. If Epic wants to compete for the next generation, it needs to meet young creators where they are, with simpler tools, lower barriers to entry, and an economic ecosystem that actually rewards young builders.
The IPO Question, and Why It’s the Wrong Answer Right Now
Analysts were still flagging a potential Epic IPO in 2026 as recently as late 2025. But let’s be direct: a company cutting 20% of its workforce because spending exceeds revenue is not in an IPO-ready position. Public markets reward growth, not contraction.
Epic’s valuation has already slid from $31.5 billion at its 2022 peak to $22.5 billion following Disney’s 2024 investment, with secondary market trading suggesting real-world values in the $13 to $18 billion range.
Sweeney has historically preferred to stay private, citing the freedom it affords him to pursue long-term strategy without short-term market pressure. Given where the company sits today, that preference looks less like a philosophical stance and more like a practical necessity. Telling a growth story on a roadshow, with contracting revenue, a single dominant revenue source in structural decline, and a second consecutive major layoff round, would be an extremely hard sell.
The Partnership Stakes Are High
What concerns me most going forward is Epic’s existing commitments. Major bets have been placed with Disney and Lego to build Fortnite into a broader entertainment platform, with real investment in Lego Fortnite as a survival and open-world experience, and the Disney collaboration signaling metaverse-adjacent ambitions. Those partnerships require consistent execution, seasonal investment, and creative energy.
With 1,000 fewer people and a mandate to cut $500M, delivering on those promises gets dramatically harder. Disney and Lego will be watching closely. And if my research on youth behavior is any indication, Epic will need to rethink the nature of those partnerships, not just the resourcing behind them.
What Comes Next
Sweeney’s stated path is clear, build great Fortnite experiences with fresh seasonal content, gameplay, story, and live events, and accelerate toward Unreal Engine 6. That’s the right instinct. Get back to basics, reinvest in the core product, earn back player trust season by season.
But this is Epic’s second major round of cuts in three years, following approximately 830 job eliminations in September 2023. The pattern is concerning. You can’t cost-cut your way to growth in a live-service game. You have to create your way there.
The companies that survive industry shake-outs are the ones that get ruthlessly focused. Epic has the IP, the engine, and the brand. The question is whether they have the organizational clarity and creative firepower to execute, and whether they’re willing to truly listen to where the next generation is actually going, rather than where they assumed it would be.
A question I am currently looking into is what if the next generation doesn’t want to play your game. What if they may want to build their own? And how does that reshape the entire entertainment landscape?
About the Author
Wanda Meloni is Co-founder and Managing Director of Innovaris Labs, a consulting and analyst group focused on the future of creativity, technology, and storytelling. With nearly 30 years tracking digital media markets, 3D graphics, and game engines, she has consulted with major companies entertainment, gaming and tech companies and writes at the intersection of storytelling, innovation and the creativity economy.