Epic Games has raised $1B in new round, bumping its valuation to $28.7 billion

[Cal Jeffrey]

TL;DR: It seems that excessive legal battles and losses in its online marketplace have not hurt Epic Games' equity valuation. It has nearly doubled its worth over last year and company stock is still not publicly traded. Capital comes from investment partners, the biggest of which is Sony Group Corporation. Epic just completed a billion-dollar round of investing, with Sony throwing in the lion's share of the pot.

Epic Games bumped up its equity valuation to $28.7 billion following a $1 billion round of funding. The company announced it gained an additional $200 million investment from Sony. This increased valuation comes despite recent reports that Epic has lost as much as $330 million throwing money at the Epic Games Store.

"This round includes an additional $200M strategic investment from Sony Group Corporation, which builds on the already close relationship between the two companies and reinforces their shared mission to advance the state of the art in technology, entertainment, and socially-connected online services," Epic said in its press release.

Variety notes that Sony boosted Epic's valuation last year to $17.9 billion with a $250 million investment for a 1.4-percent stake. Several other funding partners got in on this round, including well-known investment firms like T. Rowe Price Associates, Franklin Templeton, and Luxor Capital.

“We are grateful to our new and existing investors who support our vision for Epic and the Metaverse," said Epic Games CEO and founder Tim Sweeney. Their investment will help accelerate our work around building connected social experiences in Fortnite, Rocket League and Fall Guys, while empowering game developers and creators with Unreal Engine, Epic Online Services and the Epic Games Store."

Epic has only a single class of common stock outstanding and Sweeney still maintains controlling shares of the company.

Sony seemed eager to continue its partnership and is pleased with the company's performance in both the gaming and the digital entertainment industries.

"Epic continues to deliver revolutionary experiences through their array of cutting edge technologies that support creators in gaming and across the digital entertainment industry," said Sony Group's President and CEO Kenichiro Yoshida. "We are excited to strengthen our collaboration to bring new entertainment experiences to people around the world. I strongly believe that this aligns with our purpose to fill the world with emotion, through the power of creativity and technology."

Despite the Epic Games Store's lavish spending in the chase for exclusive content, investors seem confident in Epic's overall direction and performance. Part of the ease of investment comes from the money spigot they call Fortnite. Forbes noted, Epic's cash cow brought in $1.8 billion in 2019, down from $2.4 billion YoY.

Image credit: Sharaf Maksumov

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https://www.techspot.com/news/89294-epic-games-completes-successful-1-billion-investment-round.html

 

[Bulllee]

Who would have realised that golf courses and hotels were not as smart as it seems?
Ain't no prize here.

 

[Shadowboxer]

That cash cow won’t be around forever. Fortnite might be popular with kids now but kids are fickle. The Fortnite bubble won’t last. Although I think Epic knows this and are trying to position themselves as a major software marketplace. I just wish they’d leave Apples OS alone!

 

[terzaerian]

The real headline is that Epic is being held up by Sony's and Tencent's money. Sony is the poster boy for console gaming and Tencent is about mobile gaming, how are PC gamers so stupid as to let these known bad actors invade the space just to save $5 on a game? The future of PC gaming is going to be Fortnite and Raid: Shadow Legends, forever, if this continues.

 

[Shadowboxer]

The real headline is that Epic is being held up by Sony's and Tencent's money. Sony is the poster boy for console gaming and Tencent is about mobile gaming, how are PC gamers so stupid as to let these known bad actors invade the space just to save $5 on a game? The future of PC gaming is going to be Fortnite and Raid: Shadow Legends, forever, if this continues.

I would gladly buy a game on Epic over anywhere else to save $5. It’s a games marketplace and you don’t get rewarded for loyalty, well unless you care about those pointless steam points. Games publishers would probably rather you bought on epic as more of the money goes to them so if you wanted to be loyal to the dev then buy on Epic.

Epic are taking advantage of a stagnant market, steam is buggy and old, there’s been nothing to shake up steam for a decade and the rest of the market is just incompetent (in particular MS, EA and Ubisoft’s launchers).

But at least EA, Ubi and MS can see the future is a subscription model. Epic need to be offering something similar if it wants to stay relevant. I reckon there are already a lot of people on Xbox game pass who never buy any games. And it was the same with music. We all just use subscription services now rather than buying digital albums.

 

[terzaerian]

I would gladly buy a game on Epic over anywhere else to save $5. It’s a games marketplace and you don’t get rewarded for loyalty, well unless you care about those pointless steam points. Games publishers would probably rather you bought on epic as more of the money goes to them so if you wanted to be loyal to the dev then buy on Epic.

Epic are taking advantage of a stagnant market, steam is buggy and old, there’s been nothing to shake up steam for a decade and the rest of the market is just incompetent (in particular MS, EA and Ubisoft’s launchers).

But at least EA, Ubi and MS can see the future is a subscription model. Epic need to be offering something similar if it wants to stay relevant. I reckon there are already a lot of people on Xbox game pass who never buy any games. And it was the same with music. We all just use subscription services now rather than buying digital albums.

Loyalty is not the issue for me, preserving PC gaming as an open platform instead of a walled garden is. Looking at the horror show that the music industry has become, I boggle that you think it's a good idea for gaming to follow the same path. The publishers you name are all about destroying that model, and I will gladly pay more to stop them. I'm sorry you've decided being cheap is more important to you than having a say about where, when, and how you can play games and use your own hardware, it's how the US lost its industries and how Walmart crushed small businesses. If you can't draw the line here, where will you draw it?

 

[MaitieS]

That cash cow won’t be around forever. Fortnite might be popular with kids now but kids are fickle. The Fortnite bubble won’t last. Although I think Epic knows this and are trying to position themselves as a major software marketplace. I just wish they’d leave Apples OS alone!

It's already lasting for more than 5 years. It's like you would say that Steam Store won't last around forever...

 

[Kosmoz]

That cash cow won’t be around forever. Fortnite might be popular with kids now but kids are fickle. The Fortnite bubble won’t last. Although I think Epic knows this and are trying to position themselves as a major software marketplace. I just wish they’d leave Apples OS alone!

No, because apple is worse than Epic. Much worse and I'm glad they are fighting them. Same goes for google, both are worse than Epic.

Also Epic will be just fine with Fortnite, Rocket League and Fall Guys + their UE4/5 Engine which is one of the best. Even if EGS won't brake even, they will be fine.

Without Epic to challenge or fight them the bigger sharks would just get even bigger by doing more and more shady and greedy stuff. They already are too big and to greedy manipulative and control freaks...

And no Epic is not without fault of course, but they are the lesser evil and yes Steam is better still (store vs store comparison only, not as a whole company).

 

[DZillaXx]

That cash cow won’t be around forever. Fortnite might be popular with kids now but kids are fickle. The Fortnite bubble won’t last. Although I think Epic knows this and are trying to position themselves as a major software marketplace. I just wish they’d leave Apples OS alone!

Why?

Apple's iOS policies are Cancer. The last thing anyone should want is lack of freedom of choice.

Like Google does with android, and pretty much every other OS on the market allows for. The ability to install 3rd party app stores. For iOS the only was a non dev user is able to install an app is via the app store. There is no install from othersources option. Even on Android you can install programs without using the playstore if needed.

iOS is a publicly used OS and should be treated just like Windows/Android/etc. Otherwise it should be nothing but applications published by apple themselves.

 

[Dimitrios]

Loyalty is not the issue for me, preserving PC gaming as an open platform instead of a walled garden is. Looking at the horror show that the music industry has become, I boggle that you think it's a good idea for gaming to follow the same path. The publishers you name are all about destroying that model, and I will gladly pay more to stop them. I'm sorry you've decided being cheap is more important to you than having a say about where, when, and how you can play games and use your own hardware, it's how the US lost its industries and how Walmart crushed small businesses. If you can't draw the line here, where will you draw it?

Well said!

 

[DZillaXx]

Loyalty is not the issue for me, preserving PC gaming as an open platform instead of a walled garden is. Looking at the horror show that the music industry has become, I boggle that you think it's a good idea for gaming to follow the same path. The publishers you name are all about destroying that model, and I will gladly pay more to stop them. I'm sorry you've decided being cheap is more important to you than having a say about where, when, and how you can play games and use your own hardware, it's how the US lost its industries and how Walmart crushed small businesses. If you can't draw the line here, where will you draw it?

The Music industry sucked before streaming.

Spotify is the best thing that has happened for consumers of Music.

Maybe not the best for creators though.

 

[Watzupken]

I almost feel that EPIC is raising money just to fuel their legal battles with Apple.

 

[thelatestmodel]

The Music industry sucked before streaming.

Spotify is the best thing that has happened for consumers of Music.

Maybe not the best for creators though.

Streaming yes, Spotify no. I prefer a service that doesn't control what I get to listen to.

 

[terzaerian]

Streaming yes, Spotify no. I prefer a service that doesn't control what I get to listen to.

Streaming is good for discovering new music to listen to but terrible to use as a library. Anyone using it for the latter purpose is basically hostage to the whims of rightsholders and twitter mobs.

 

[Homerlovesbeer]

It's already lasting for more than 5 years. It's like you would say that Steam Store won't last around forever...

Seriously I wish the world would get over Fortnite already.... Talk about boring and stale.

 

[thelatestmodel]

Streaming is good for discovering new music to listen to but terrible to use as a library. Anyone using it for the latter purpose is basically hostage to the whims of rightsholders and twitter mobs.

You can stream your own library though, is what I'm saying. If you set it up yourself.

I used to subscribe to Google Play Music until that was shut down, because it let you add your own music to your library. Now I just stream it from my house.

Seriously I wish the world would get over Fortnite already.... Talk about boring and stale.

Couldn't agree more, it's cack. Lowest common denominator trash for the masses.

 

[terzaerian]

You can stream your own library though, is what I'm saying. If you set it up yourself.

I used to subscribe to Google Play Music until that was shut down, because it let you add your own music to your library. Now I just stream it from my house.

I would still opt to set up my own library to stream with my own software from my own hardware, and/or distribute local copies to the devices I need. It's more work, but the latter leads - and I wouuld surmise this is likely by design - habitually to making Spotify the source repository rather than the derived repository. The convenience mainstream services like Spotify offer has basically been weaponized and it functions like an addiction, and over time it erodes salutary habits. I recognized this early on with services like iTunes where I would stop maintaining a metadata field on my files because iTunes did it for me, which worked great until a failed backup/restore lost that metadata, and again in the past couple years when I deleted Facebook and exited Gmail and realized I didn't really have a contacts file and needed to build one from the ground up.

 

[DZillaXx]

Streaming yes, Spotify no. I prefer a service that doesn't control what I get to listen to.

You do get to control what you listen to... I'm talking about the paid version here. It has 99% of what my old physical media collection had. And I no longer need to pirate music to get what I want. Music gets crazy expensive fast when you start adding up tracks. If you want to get a back collection of older music (the music I tend to enjoy most) I'd need over $10k to give me the collection of music my Spotify Playlists contain.

I do agree the death of Google Music sucks, Youtube Music is a joke. It moved my collection over to youtube music, but it no longer sorts correctly. Another fail on googles part.

I have no problem paying for a service if it's doing me a service. I could care less about owning an item. I have a steam game collection full of games I will never play again. I have CD's I will never touch. A few years ago I finally caved and tossed out like 3 tubs of VHS tapes. I don't have the free time I had in my youth, and the older I get the more streaming services make sense.

 

[terzaerian]

You do get to control what you listen to... I'm talking about the paid version here. It has 99% of what my old physical media collection had. And I no longer need to pirate music to get what I want. Music gets crazy expensive fast when you start adding up tracks. If you want to get a back collection of older music (the music I tend to enjoy most) I'd need over $10k to give me the collection of music my Spotify Playlists contain.

I do agree the death of Google Music sucks, Youtube Music is a joke. It moved my collection over to youtube music, but it no longer sorts correctly. Another fail on googles part.

I have no problem paying for a service if it's doing me a service. I could care less about owning an item. I have a steam game collection full of games I will never play again. I have CD's I will never touch. A few years ago I finally caved and tossed out like 3 tubs of VHS tapes. I don't have the free time I had in my youth, and the older I get the more streaming services make sense.

And this beautifully illustrates my point. You'll love this convenience until some rightsholder decides they aren't getting their "fair share" from Spotify, decides to spin up their own threadbare, janky service, and pulls Spotify's licenses (and a chunk of "your" library) to do so, or when some Twitter Karens descend on Spotify's social media feed with your dox and demand your account get deleted because you didn't wear a mask to pump gas, or something similarly inane. At which point you're going to rue the physical media and value you threw away.

 

[Shadowboxer]

Loyalty is not the issue for me, preserving PC gaming as an open platform instead of a walled garden is. Looking at the horror show that the music industry has become, I boggle that you think it's a good idea for gaming to follow the same path. The publishers you name are all about destroying that model, and I will gladly pay more to stop them. I'm sorry you've decided being cheap is more important to you than having a say about where, when, and how you can play games and use your own hardware, it's how the US lost its industries and how Walmart crushed small businesses. If you can't draw the line here, where will you draw it?

And I’m sorry you genuinely believe boycotting epic will prevent this “walled garden” you speak of. Steam has DRM, they all have DRM except GOG. And believe me in 5-10 years time the vast majority of consumers will be using subscription services and won’t even be able to access the game files on their systems.

The market is going that way whether you choose to pay another marketplace more money or not so why put yourself out of pocket?

Besides, the reality is a “walled garden” would probably end up being better for both publishers and consumers. Look at Apples ecosystem, their users are enjoying far superior experiences to their competitors due to the tighter control of the experience. Being able to say you own your games is meaningless. You still sign a EULA like you always have done, that puts almost the same amount of restrictions on you as other models.

At the end of the day you spend money to play games. You’re a fool if you actively choose to pay more for the same experience because you feel one type of DRM actually makes any kind of difference to the end user at all.

 

[Shadowboxer]

Why?

Apple's iOS policies are Cancer. The last thing anyone should want is lack of freedom of choice.

Like Google does with android, and pretty much every other OS on the market allows for. The ability to install 3rd party app stores. For iOS the only was a non dev user is able to install an app is via the app store. There is no install from othersources option. Even on Android you can install programs without using the playstore if needed.

iOS is a publicly used OS and should be treated just like Windows/Android/etc. Otherwise it should be nothing but applications published by apple themselves.

Apples iOS is “publicly used” of course as it’s a product sold to the public. But it is not publicly owned. It’s owned by a private company and all users who buy Apple products are required to sign up to a EULA which includes giving Apple the right to regulate the content sold to you. This works for consumers as it means that Apple can weed out third party apps that may cause harm. You would be shocked at how much more malware gets onto android devices than Apple devices.

Personally I have no want or need for unverified third party apps on my phone. On my desktop absolutely but on my phone I just want to use mostly services that already exist and I appreciate the quality of services that are delivered.

Absolutely no one is forced to buy Apple and sign that EULA so they don’t have a monopoly. Epic are only trying to prove they do to save themselves millions in fees they pay to Apple to sell on their store. But currently if you buy an item in fortnite on an Xbox, Epic pays MS a similar percentage to that they pay Apple. But of course no one is suggesting MS allow just anyone to sell things on their consoles.

 

[terzaerian]

And I’m sorry you genuinely believe boycotting epic will prevent this “walled garden” you speak of. Steam has DRM, they all have DRM except GOG. And believe me in 5-10 years time the vast majority of consumers will be using subscription services and won’t even be able to access the game files on their systems.

I'm not a passive consumer, I engage with content through modding. If that's the direction gaming goes, then in 5-10 years I won't be gaming. But until then I will fight to prevent it from going that direction.

This isn't the first time I've heard this kind of thinking, either. During the 2000s and the ascendancy of the Xbox, I held fast to PC gaming while the media and developers were toasting its death. As we can all see, their pronouncements aged poorly.

The market is going that way whether you choose to pay another marketplace more money or not so why put yourself out of pocket?

Because I have principles. I pity those who can't afford them and are too weak and cowardly to fight for them.

Besides, the reality is a “walled garden” would probably end up being better for both publishers and consumers. Look at Apples ecosystem, their users are enjoying far superior experiences to their competitors due to the tighter control of the experience. Being able to say you own your games is meaningless. You still sign a EULA like you always have done, that puts almost the same amount of restrictions on you as other models.

That's subjective. Apple offers an inferior experience to people that don't outsource management of their own devices, or care about build quality on the micro level.

 

[Shadowboxer]

I'm not a passive consumer, I engage with content through modding. If that's the direction gaming goes, then in 5-10 years I won't be gaming. But until then I will fight to prevent it from going that direction.

This isn't the first time I've heard this kind of thinking, either. During the 2000s and the ascendancy of the Xbox, I held fast to PC gaming while the media and developers were toasting its death. As we can all see, their pronouncements aged poorly.


Because I have principles. I pity those who can't afford them and are too weak and cowardly to fight for them.


That's subjective. Apple offers an inferior experience to people that don't outsource management of their own devices, or care about build quality on the micro level.

I am not weak or cowardly at all. I’m just intelligent enough to grasp that paying more money for the same experience is foolish alongside having the awareness to grasp that technically owning your games is meaningless.

You aren’t fighting any fight. Unless you exclusively buy games on GOG, and even then you still sign a EULA. You’re still giving money to the companies trying to “wall off” this garden. What you are doing is like trying to campaign against smoking by telling people to avoid buying cigarettes from just one place that sells them and then smoking yourself. I pity you if you actually think everyone stopping buying games on Epic would stop the movement of the industry. If anything it would likely just push yet even more people to a tighter subscription model. You’re contributing to the very thing you don’t like if you buy games from anywhere.

 

[terzaerian]

I am not weak or cowardly at all. I’m just intelligent enough to grasp that paying more money for the same experience is foolish alongside having the awareness to grasp that technically owning your games is meaningless.

You aren’t fighting any fight. Unless you exclusively buy games on GOG, and even then you still sign a EULA. You’re still giving money to the companies trying to “wall off” this garden. What you are doing is like trying to campaign against smoking by telling people to avoid buying cigarettes from just one place that sells them and then smoking yourself. I pity you if you actually think everyone stopping buying games on Epic would stop the movement of the industry. If anything it would likely just push yet even more people to a tighter subscription model. You’re contributing to the very thing you don’t like if you buy games from anywhere.

A lot of words to try and justify learned helplessness and only repeat yourself. My points stand. You can go on consuming and renting, I will go on engaging and owning.

 

[Shadowboxer]

A lot of words to try and justify learned helplessness. My points stand. You can go on consuming and renting, I will go on engaging and owning.

And at the end of the day we will both be in the same position and have had the same experiences but I will have more money than you .