Epic Games, the maker of the popular battle royale game Fortnite, relies mostly on microtransactions to make money. But honestly, how much can you even make off of microtransactions that add nothing but new cosmetics to your gameplay? Well, the answer is $28.7 billion. Yeah, I am shocked too. Epic Games has announced that it has raised $1 billion in a new funding round at a staggering valuation of $28.7 billion.
What’s amazing about this is that Fortnite-the biggest thing from Epic, is free. All you really have to pay for is cosmetics and new skins that serve as nothing more than bragging rights in front of your fellow Fortnite fanatics.
I may be oversimplifying things (Epic does have its own Epic Games Store, as well as the Unreal Engine which is frequently used to create new games), but there’s no denying the cultural phenomena that Fornite has become.
The $1bn round was led by Sony, which poured in $200 million into the company. Other investors also participated in the round, including Appaloosa, Baillie Gifford, Fidelity Management & Research Company LLC, GIC, T. Rowe Price Associates-managed accounts, Ontario Teachers’ Pension Plan Board, BlackRock managed accounts, Park West, KKR, AllianceBernstein, Altimeter, Franklin Templeton and Luxor Capital.
The gaming company was able to justify this valuation despite being at odds with some of the biggest tech companies in the world-Apple and Google. Ever since Epic introduced the option to buy stuff from inside the game (thus cutting out the middlemen Apple and Google and circumventing the transaction fee they charge), the company has seen attacks being levied by both corporations.
In fact, presently, Fortnite is not available on Apple devices like iPhone and iPad, and Epic and Apple are engaged in a legal tussle. While Apple argues that Epic’s decision to cut it out of microtransactions violates its App Store’s policy, Epic says that the Cupertino tech giant is using its monopoly to pressurize smaller players.
Thus, a valuation of almost $30Bn, even though its biggest feature is currently not available to a large section of gamers, is super impressive.
“We are grateful to our new and existing investors who support our vision for Epic and the Metaverse,” CEO and founder Tim Sweeney said in a statement. “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.”