Epic Games Announces $1 Billion Funding Round

[AleksandarK]

Today Epic Games announced that it completed a $1 billion round of funding, which will allow the company to support future growth opportunities. Epic's equity valuation is now $28.7 billion.

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. Other investment partners include Appaloosa, Baillie Gifford, Fidelity Management & Research Company LLC, GIC, funds and accounts advised by T. Rowe Price Associates, Ontario Teachers' Pension Plan Board, funds and accounts managed by BlackRock, Park West, KKR, AllianceBernstein, Altimeter, Franklin Templeton and Luxor Capital. Epic continues to have only a single class of common stock outstanding and CEO Tim Sweeney remains the controlling shareholder of the company.



"We are grateful to our new and existing investors who support our vision for Epic and the Metaverse. 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," said Tim Sweeney, CEO and Founder, Epic Games.

"Epic continues to deliver revolutionary experiences through their array of cutting edge technologies that support creators in gaming and across the digital entertainment industry. 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," said Kenichiro Yoshida, Chairman, President and CEO, Sony Group Corporation.

Credit Suisse and BoFA Securities acted as joint placement agents to Epic, and Wilson Sonsini Goodrich & Rosati provided legal counsel to Epic.

View at TechPowerUp Main Site

 

[Nuckles56]

I guess the funds coming in from fortnite aren't enough to keep up their spending splurge, so they need that investor capital as well

 

[W1zzard]

I guess the funds coming in from fortnite aren't enough to keep up their spending splurge, so they need that investor capital as well

Exactly my thoughts, and super unexpected

 

[Vayra86]

I guess the funds coming in from fortnite aren't enough to keep up their spending splurge, so they need that investor capital as well

I think that assumption is quite correct.

Nevertheless, this is how these things seem to go these days. Need big capital to rule world. And when you do, profit. Its how Facebook, Google, Netflix, Twitter, etc etc have all done it. We now know what the price of free really was, there, for some of those services and companies. A price gets paid.

As long as that price is paid by investors all I can say is: 'lets profit'.

Get those free games

 

[WonkoTheSaneUK]

Interesting that this comes AFTER it's revealed that Epic likely won't make a profit until at least 2027...

 

[Deleted member 177333]

lol, no doubt need $ after losing their asses on the EGS the last couple years.

Never buying anything from Epic.

 

[watzupken]

I think they are trying to replenish their coffer due to losses and lawsuits with Apple. And investors are willing to let them continue to "invest" their money and continue making losses. I've ditched EPIC's platform for good. No amount of free games is enough to get me back.

lol, no doubt need $ after losing their asses on the EGS the last couple years.

Never buying anything from Epic.

Its not a sustainable business model in my opinion. You can give freebies, throw lots of discounts, but they all come at a cost to them. If the business fails to pick up after 2 years, I don't think it will miraculously pick up this year or the next if they persist with their current approach. The metrics they have shared about number of registered and active users says nothing about the health of the platform. So what they have xx millions of active users when they don't make much money from each one of them? On Steam, you rarely get free games, so number of active users should somewhat tell you that there should be some sales either recently or in the past, therefore, people are active on Steam.

 

[Liquid Cool]

They knocked it out of the park with Fortnite....and now they're borrowing a billion dollars.

I can't wait to see what happens next....

Best,

Liquid Cool

 

[DemonicRyzen666]

No one is asking them self about their games if they do go out business in a few years.
Would you be happy you can't play any of your EPIC games If they do go out of business?

 

[yotano211]

I guess the funds coming in from fortnite aren't enough to keep up their spending splurge, so they need that investor capital as well

I've heard that the average daily player count on Fortnight has been dropping. i would think they are getting less income.

I think that assumption is quite correct.

Nevertheless, this is how these things seem to go these days. Need big capital to rule world. And when you do, profit. Its how Facebook, Google, Netflix, Twitter, etc etc have all done it. We now know what the price of free really was, there, for some of those services and companies. A price gets paid.

As long as that price is paid by investors all I can say is: 'lets profit'.

Get those free games

I do every week on many accounts.

 

[64K]

I've heard that the average daily player count on Fortnight has been dropping. i would think they are getting less income.

The revenue is steadily dropping on Fortnite from it's high of 2.4 billion dollars in 2018 from what I've read but it is still immensely profitable.

 

[Vayra86]

I think they are trying to replenish their coffer due to losses and lawsuits with Apple. And investors are willing to let them continue to "invest" their money and continue making losses. I've ditched EPIC's platform for good. No amount of free games is enough to get me back.


Its not a sustainable business model in my opinion. You can give freebies, throw lots of discounts, but they all come at a cost to them. If the business fails to pick up after 2 years, I don't think it will miraculously pick up this year or the next if they persist with their current approach. The metrics they have shared about number of registered and active users says nothing about the health of the platform. So what they have xx millions of active users when they don't make much money from each one of them? On Steam, you rarely get free games, so number of active users should somewhat tell you that there should be some sales either recently or in the past, therefore, people are active on Steam.

Side note: activity is measured by logged in accounts per X time.

Steam requires explicit opt-out to keep it from automatically logging in. Also, users are constantly being triggered to either opt out of that or get automatic login by designating machines as trusted devices, to avoid the 2FA check. The vast majority, esp less advanced users will automate that.

So yeah. Steams data on activity... much like its survey is grossly misleading as a data set to measure actual platform success.

EGS is not that different btw.

 

[PapaTaipei]

Laughable and pathetic.

 

[Vayra86]

No one is asking them self about their games if they do go out business in a few years.
Would you be happy you can't play any of your EPIC games If they do go out of business?

Why would you not? I have yet to see the first digital indefinite license being cancelled just because a distributor or gateway stops doing what it does. I dont see how that would work wirhout a legal problem. After all licenses were attributed to accounts and thus people. Customers with mutually agreed right to use the product . Even if its free - these are contracts.

The legalese about this is uncharted territory but rest assured customers will need to be compensated. Example: the creator of the product enables your license on its own launcher or services, or pays another distributor to do it for them.

A software license is literally a form of ownership. Its one big reason to stay far away from cloud based gaming because that principle does not apply there. On cloud services you are just a subscriber and all you get is temporary and no ownership is involved.

And if you are not partial to that idea, then every on-demand service is literally the same. They can all go under, Steam included, and when they do, it tends to happen quite suddenly. Life is full of risk that way. The entire society is built on agreements, after all, and they all work because we have some baseline of trust in those agreements to be honored. And if you don't trust that idea, there is always GOG.

 

[grlfbremastered]

Sony will buy epic and Microsoft will buy STEAM ... mark my words. Who wins? I guess it's obvious.

 

[Deleted member 177333]

I think they are trying to replenish their coffer due to losses and lawsuits with Apple. And investors are willing to let them continue to "invest" their money and continue making losses. I've ditched EPIC's platform for good. No amount of free games is enough to get me back.


Its not a sustainable business model in my opinion. You can give freebies, throw lots of discounts, but they all come at a cost to them. If the business fails to pick up after 2 years, I don't think it will miraculously pick up this year or the next if they persist with their current approach. The metrics they have shared about number of registered and active users says nothing about the health of the platform. So what they have xx millions of active users when they don't make much money from each one of them? On Steam, you rarely get free games, so number of active users should somewhat tell you that there should be some sales either recently or in the past, therefore, people are active on Steam.

No doubt - it goes to show that even people who are over there free-loading aren't spending much, if any, money even though they've got accounts now. I wouldn't buy anything from Epic if they were the only store in town.