EPIC is simply trying to break into a well-entrenched business dominated by Steam for many years. It's tough, and someone trying to do that needs lots of working capital, which EPIC apparently has. The free games are simply to get people in the habit of visiting the EGS site as often as possible. Sweeney has bitten off a lot. I'm thinking Sweeney is where Valve was 20 years ago--he's growing tired of the game-engine race and wants to transition, as Valve did so long ago, to something less demanding but financially rewarding. I have nothing against EGS at all, and as far as the exclusivity deals go, EGS started giving customers a break on the list prices--which the developers could afford with the reduced distribution fees. I certainly applaud that.
All of this is designed not to make profits, but to get people, and game developers, used to the EGS. People are wrong to get mad at EPIC because of the exclusivity deals--because it's the dev/publisher who decides to take the exclusive deals, knowing that his game won't be distributed by any other outlet like Steam or Gog for a set period. EGS can make the offer, but the dev has to be the one to decide if the reduced distribution is worth the discounted fees. Time will tell if EPIC will be successful, of course. I wish EPIC lots of luck with Google.