Epic Games now worth $17 billion after new round of investment
Epic Games, the games software giant behind Fortnite and the Unreal Engine, last week announced it had raised US$1.78 billion in its new round of funding, further cementing its status as a top player in the video games industry.
The company said in a statement that this funding mostly came from primary capital and secondary purchases. One particularly large chunk of the funding came from Sony, in the form of a $250 million strategic investment, which the company announced last month.
Some existing investors, like KKR and Smash Ventures, increased their holdings in the company, and numerous new investors were added into the fray.
“Having the support of leaders in the financial community accelerates Epic’s efforts to build a new kind of digital ecosystem using real-time 3D technology, services that connect hundreds of millions of people, and a digital storefront that offers a fair business model,” says Epic founder and chief executive officer Tim Sweeney.
“We are delighted to have them as part of the Epic family.”
Since the immensely popular Fortnite made its mark on the public consciousness several years ago, Epic has been going from strength to strength – culminating in last Friday’s announcement, which also made public the company’s 2020 valuation: $17.3 billion.
While much of this comes from the Epic’s rampant success with Fortnite, it’s secondary to the income brought in by the company’s equally successful game engine, the Unreal Engine, according to analysts.
And, according to GlobalData associate project manager for thematic research Rupantar Guha, it’s this engine that will allow for significant expansion.
“[The Unreal Engine] demonstrates the company’s capabilities in computer graphics, 3D technologies, cross-platform offerings, augmented reality (AR) and virtual reality (VR), and its power and flexibility are garnering the company’s success and will allow it to reach beyond the gaming sector to film-making, architecture and medical systems,” says Guha.
The recent boost in funding will most likely be used to expand Unreal’s platform and leadership position in game development, esports, social media, eCommerce and mobile gaming, according to GlobalData.
“[Epic Games] currently ranks second in GlobalData’s gaming software thematic sector scorecard, preceded only by Tencent (which itself owns 40% stake in Epic Games), and ahead of Valve and Microsoft,” says Guha.
The announcement from Epic Games comes as the video game industry in general continues to see boosted revenues, in large part due to the millions staying at home because of COVID-19 restrictions.
Many video game companies have posted significant profit boosts this year, and the industry itself is set to generate revenues of $159.3 billion this year – a 9.3% increase year-on-year, according to Newzoo, the games market analytics company.