"Fortnite's cultural moment is starting to fade," games analyst says amid mass layoffs, and its downturn is part of the "erosion of American leadership" in video games

Fortnite's not dead, but it's suffering a "downturn" in engagement that Epic CEO Tim Sweeney has blamed for recent layoffs affecting over 1,000 employees. According to one industry analyst, Epic's declining fortunes mark one example of a broader collapse of "American cultural dominance" in video games.

"It's in the nature of empires to destroy themselves," NYU professor and games industry researcher Joost van Dreunen dramatically begins in a new analysis. As he explains, "the news of Epic Games' latest layoffs adds to the mounting evidence of the real-time collapse of American cultural dominance in interactive entertainment." As a result, it has become "painfully clear that, at long last, Fortnite's cultural moment is starting to fade."

American developers now "face a bevy of strategic and economic challenges." Demand for games has diminished since its COVID peak, yet prices to enter the hobby continue to rise, further driving down consumer interest. Van Dreunen argues that while many of those factors are global, some are specific to the US, as much of the burden for the cost of recent tariffs falls on the shoulders of American business and buyers.

Latest Videos From

He also cites expensive H-1B visa fees, saying that the $100,000 cost of these visas "virtually ensures that publishers will relocate talent elsewhere. It makes the US less competitive and causes it to miss out on tax revenue from high-earning employees." These cost factors mark a notable "contributor to the erosion of American leadership" in the game industry.

Meanwhile, game companies based in Europe, Asia, and the Middle East are all finding more success. "Publicly traded game makers in Europe (+60%) and Asia (+26%) have, on average, performed notably better than their American counterparts (+18%) in 2025," van Dreunen says.

"One major contributor now showing its true impact is the encroaching, disproportionate power wielded by platform holders," van Dreunen says. "Over the ten years leading up to 2025, platform revenue, from app stores, console marketplaces, and digital storefronts, jumped from $14 billion to $41 billion, a 191 percent increase. By comparison, game publishers saw their revenue rise from $65 billion to $128 billion, a more modest 98 percent increase. Over the course of a decade, gatekeepers have captured value at nearly twice the rate of content creators."

Epic, of course, fought a protracted, expensive legal battle in an effort to loosen the power wielded by platforms like Apple and Google. "Despite winning several important concessions," van Dreunen says, Epic "has spent a fortune on lawyers and forfeited even more in lost opportunities. Before its removal from the App Store, Fortnite was generating an estimated $1-$2 million per day on iOS, or roughly $500 million annually. Even after Apple's 30 percent cut, that's $375 million in net revenue, every year, gone. Five years later, that totals close to $2 billion."

I have to wonder, though, if the decline of a game like Fortnite is inevitable in itself, regardless of external economic factors. Business doesn't demand profit, which Fortnite does generate at a remarkable rate, it demands growth, which is impossible to sustain in perpetuity. At some point, every live-service game will decline – you'll eventually run out of new players to court, and old players will eventually decide that they've had enough.

Fortnite helped spark a live-service gold rush, and while there have been hits in the space, names like Concord and Highguard litter an increasingly larger graveyard. Even if the American live-service empire is the first to fall, I'm not sure the global game industry can stave off the force of entropy forever.

Fortnite producer says "we cannot even fully understand what kind of impacts this will have" amid mass layoffs at Epic Games: "What comes next is very hard and painful."