Following the completion of a successful funding round in August 2020, Epic Games got an updated post-money equity valuation of $17.3 billion. The funding round featured a blend of primary capital as well as secondary purchases.
Based on the research data analyzed and published by ForexSchoolOnline.com, among the noteworthy investors was Sony Corporation which acquired a 1.4% stake in the company following a $250 million investment. Other key investors included Baillie Gifford, T. Rowe Price Group and Fidelity Management & Research Company. In total, it saw $1.78 billion injected into the company.
The video game company, renowned for its popular battle royale title Fortnite, has come a long way since its comparatively humble beginnings. In 2012 when Tencent bought a 40% stake in Epic Games for $330 million, it was worth $825 million. According to Bloomberg’s analysis, it was worth between $5 billion and $8 billion in mid-2018.
Its valuation in 2020 makes it almost three times worth the Major League Soccer, valued at $7.5 billion. It is also almost worth more than three-quarters of the National Hockey League, valued at $21 billion.
Data from Craft.co reveals that in total, Epic Games has received around $3.66 billion in funding since its inception. In October 2018, it raised $1.3 billion from Lightspeed Venture Partners, Vulcan Capital and KKR & Co. among other investors.
Moreover, it received a private equity injection from Chris Adamo in December 2018 and an undisclosed amount from Dreamworx in May 2020.
Fortnite Revenue Topped $2M First Day on iOS, Top Game Globally in 2019 with $1.8B Revenue
In part, the massive growth of Epic’s valuation has been fueled by the success of Fortnite. Released in 2017, the game set itself apart from a sea of shooter-type games by adopting a free-to-play model.
It generates income for payments made in-game for skins, costumes and other items, as well as a Battle Pass, paid for under a quarterly subscription model. The Battle Pass generates the bulk of the game’s revenue, giving players exclusive access to system updates like character and map features.
Within the first 10 months of its existence, it made over $1.2 billion in revenue and amassed a 125 million player audience. SensorTower also revealed that on April 1, 2018, when Fortnite launched on iPhone, it made $2 million in a single day and $9.5 million within two weeks. In its first 30 days, its mobile version, only available on iOS devices, grossed over $25 million.
According to research data published by SuperData, Fortnite was the top game worldwide in 2019. It generated $1.8 billion in revenue to clinch top position for the second year in a row. The source shows that based on February 2020 earnings, it was the No. 4 highest grossing video game on consoles globally.
In April 2020 alone, Fortnite earned revenue amounting to $400 million. During that month, players spent 3.2 billion hours playing the game. When Fortnite staged a virtual concert for Travis Scott in April, it drew the attention of over 27 million people.
In May 2020, it topped 350 million players globally according to Statista, a substantial jump from 250 million in March 2019.
LoL Generates $1.5B in 2019, $300M Less than Fortnite
Epic Games CEO and founder, Tim Sweeney, holds a stake of more than 50% in the company. According to Bloomberg, his net worth is just shy of $10 billion. Besides Fortnite and a host of other games, Epic Games is also behind Unreal Engine.
The popular software, Unreal Engine, is a platform where a good number of aspiring game developers start their projects. Thanks to its free to use model, it powers many of the world’s top games.
Tencent is a major stakeholder in the company courtesy of its 2012 investment. The Chinese conglomerate also happens to be the outright owner of Riot Games. Prior to 2011, Tencent was a publishing partner for the company.
But in 2011, it became the majority stakeholder in Riot Games, paying $400 million in exchange for a 93% stake. In 2015, it paid an undisclosed amount for the remaining 7% to take full control. The move was perfectly timed as Riot Games’ League of Legends, currently the most popular PC game, was just exploding into popularity.
In 2019, LoL generated around $1.5 billion, $300 million less than Fortnite according to SuperData. It thus made the second highest revenue amount in the realm of free-to-play PC games, which generated a total of $20.6 billion. Considering that the LoL player count is estimated to be 100 million to 120 million, this comes as no surprise.