A mere two years ago, Epic Games was worth an estimated $8 billion, but today that figure has more than doubled to $17.8 billion. New funding includes capital from Sony, who recently announced a $250 million investment, and organizations like Baillie Gifford, Fidelity Management & Research Company, Lightspeed Venture Partners, and several others.
Exclusivity Outrage Led To Nowhere
Throughout 2019, Epic Games was often in the news for all things relating to the dominance of Fortnite, as so much of the organizations success is owed to the battle royale game. At the same time, there was also a constant stream of attention for the ongoing signing of exclusivity agreements with publishers of other games, making the Epic Games Platform the only place to purchase and experience some of the most highly-anticipated titles of the year.
Long-time fans of Steam and other platforms would thump their virtual chests in angry protest, swearing to forever boycott the Epic Games Platform, and while some may have kept true to this vow it does not seem to have made any difference in slowing Epic down.
Developers have been quite open in discussing their success with the Epic Games Platform. When Anno 1800 was announced as an exclusive, the usual blabbering of doomsayers made the rounds online, but in its first week of launch the game sold more than four time the copies of the previous titles.
Although there was a vocal minority clamoring about the injustice of exclusive signing, several other organizations have done this year years and no one seems to mind. Sony’s PlayStation 4 is by far the most efficient in this regard, releasing some of the best games in recent memory as console exclusive titles.
Even now this is being put to the test again with the upcoming release of Marvel’s Avengers, with Spider-Man being a Sony exclusive that PC and Xbox One players will never see. Some of the outcry makes it seem like the game is in trouble for its launch, but, this will likely only bolster sales on the PlayStation 4. Exclusivity might be a touchy subject, but Epic Games has not suffered because of its actions in any ways that seem worth mentioning.
Epic Games Is More Developer Friendly
Not only do sales appear to be doing just fine on the Epic Games Platform, it has also become clear that it is a far better space to be than something like Steam due to the revenue sharing differences between the two organizations. Steam takes a massive 30% of all revenue from game sales, whereas Epic Games has been critical of that figure, offering its developers a far better deal at only 12%.
That difference of a developer receiving 70% of all revenue compared to 88% is a big deal, and as more and more developers flock to cash in on the ever-growing market for gamers, competition is fierce and the margins afforded by Epic Games can make all the difference.
Sony And Unreal Engine 5
Epic Games showed off its increased market presence recently in its collaborative efforts with Sony. The $250 million investment accounts for a 1.4% stake in Epic Games. There was also the surprise reveal that both organizations had been collaborating for years, showing off an outstanding PlayStation 5 demo with the brand-new game engine, Unreal Engine 5.
Given that Sony loves its exclusive games, we may see some Epic Games Store titles that first launch exclusively onto the PlayStation 4 and 5 upon release of the next generation of console. Since exclusivity is something that both companies leverage often, this may come in the form of a console exclusive, or merely a timed-exclusive that will release later, since it would seem odd for Epic Games to forgo it PC base of consumer.
What Lies Ahead For Epic Games?
Much of Epic Games’ major success can be owed to the unstoppable cultural phenomenon of Fortnite, which dominated the competition for years and today remains at the top of the battle royale genre. However, it does appear that the market for battle royal games has not only become completely saturated but may also be shrinking as consumers are simply tired of the exact same style of game year after year.
This is not to say that Fortnite will disappear overnight, but it is certainly something that will need to be considered if Epic Games is to remain as dominant a player as it is now five, ten, and even twenty years down the road.
As a publisher and platform for consumers to buy and play games, the Epic Games Store has certainly grown thanks to its aggressive campaigns. Exclusivity has been one method of luring consumers away from places like Steam, but so too has the literal process of paying for consumer attention through free games.
Throughout 2019, consumers were offered free games that became a permanent part of their collections. This could not have been cheap to do, and Epic Games kept up its gifts throughout 2020, with small indie games and well-known AAA titles. By simply visiting the Epic Games Store once a week, players would grow their own libraries of diverse game titles, all for free. When was the last time Steam gave anything away for free? It has happened, but not in any sort of consistent manner.
For now, Epic Games is only going to continue seeing growth. In two years’ time, will we again be celebrating that the company has more than doubled its value? We certainly cannot wait to see what lies ahead.
Source: msvuk.com, theverge.com