May 11, 2021

Sports Legend

How Fortnite helped make Epic Games worth nearly $ 8 billion

It’s no secret that Fortnite video gaming is huge these days.

The only thing bigger than that can be the valuation of its developer, Epic Games.

According to a new Bloomberg report, the company is now estimated to be worth around $ 5 billion (£ 3.8 billion) to $ 8 billion (£ 6.1 billion).

Fortnite’s phenomenal popularity has been credited with boosting the valuation of Epic Games

While the exact amount of Fortnite’s contribution to the valuation of the company is unknown, there is no doubt that it played a very significant role, as the video game is said to make on average around $ 2 million (1 , £ 5million) per day on mobile devices alone.

Timothy O’Shea, senior vice president of equity research at Jefferies Financial Group, summed up the relationship between the popularity of Fortnite and the valuation of Epic Games by simply saying, “ The valuation of Epic has exploded in parallel. to the success of Fortnite. ”

To illustrate the rapid growth in valuation of the company, Chinese holding company Tencent Holdings Ltd. bought 40% of Epic Games for $ 330million (£ 254million) in 2012, when the company was valued at around $ 825million (£ 635million).

This means that Epic Games’ valuation has soared to $ 7 billion (£ 5.3 billion) in just six years.

Many industry analysts credit the video game revenue model for its exceptional financial success. While free, its in-game store allows players to purchase special outfits, character dances, and missions through a virtual currency called V-bucks, which in turn are purchased in exchange for real money.

The limited availability of many in-game store items often prompts players to purchase them before they are no longer available, creating a sense of urgency – and monetary gain for Epic Games.

On the revenue side, they did something really unique, which came with a perception of exclusivity. If you see another player in a leopard skin and go to the store and see that it is no longer available, you think, shoot, I have to move on next time, ”said Michael Pachter, analyst at Wedbush Securities Inc ..

Fortnite has raked in millions of dollars in in-store purchases of characters, missions, and more

Fortnite has raked in millions of dollars in in-store purchases of characters, missions, and more

The massive growth in the video game company’s valuation has also been amplified by other recent successes, such as the release of other games and updates to its Unreal Engine. The video game developer also sold its popular Gears of War video game series to Microsoft in 2014.

However, it’s still impossible to downplay the role Fortnite has played in Epic Games’ explosive growth in valuation. The video game has reportedly grossed over $ 1.2 billion (£ 923 million) in in-game purchases and ranks by far the most popular game in the fast-growing Battle Royale video game genre, estimated at a a staggering $ 20 billion (£ 15.3 billion) by 2019.

Currently, Fornite’s player base is estimated at around 125 million people worldwide.

What is Epic Games?

Epic Games is a video game developer founded in 1991 by Tim Sweeney, originally under the name Potomac Computer Systems.

Originally based out of Sweeney’s parents’ home in Potomac, Maryland, the company moved to Cary, NC in 1999 and rebranded itself as Epic Games.

The company is developing the Unreal Engine, one of the industry’s most popular video game engines, and has also produced a number of other leading video games in addition to Fortnite, including shooting franchises. action Gears of War and Unreal and Infinity Blade. fighting game series.

What is Fortnite?

Fortnite is a free-to-play video game developed and published by Epic Games.

Originally released in July 2017, its incredibly popular battle royale mode was introduced shortly thereafter in September 2017. The game mode sees 100 players compete in fast-paced matches that combine shooter, survival, and fort building.

Fortnite is currently available to play on Nintendo Switch, Xbox One, PlayStation 4, Microsoft Windows, Mac OS, iOS, and Android.