Epic Games

Epic Games (previously known as Potomac Computer Systems and Epic MegaGames, Inc) is a software and gaming developer founded in 1991 and known for its Unreal Engine (a real-time 3D creation game engine), used for developing gaming titles such as Unreal (1998), Gears of War (2006), and the Infinity Blade series (2010-2013). 

In July 2017, Epic Games released the now popular esports title Fortnite on a paid early-access basis. In September 2017, the developer released a variant called Fortnite Battle Royale (FBR) as a free-to-play title across all platforms, inspired by the popularity of PlayerUnknown's Battlegrounds (PUBG). FBR saw significant commercial success and ranked second in Twitch viewership (behind Riot’s League of Legends) with 1.6 million peak viewers. As of April 2020, Fortnite has 350 million registered players and recorded USD 1.8 billion in revenue in 2019. Epic Games invested USD 100 million for its first year of esports tournaments in 2018. The flagship event was the Fortnite World Cup, with a prize pool of USD 30 million. In April 2020, Fortnite announced the Fortnite Champion Series (FCS), with a prize pool of USD 2 million.

Epic Games has been aggressive in its acquisition strategy, with at least seven acquisitions since 2018, directed mainly toward improving its Unreal Engine offering and strengthening the developer toolkit for Unreal Engine. Its most recent developer acquisition occurred in 2019 when it acquired Rocket League developer Psyonix. This signals a clear strategy by Epic to keep developing its virtual free-for-all concept in gaming and esports. In addition, the company invested in an open source gaming platform called Lutris in November 2019. 

Its major acquisitions in 2021 include that of Tonic Games Group, the parent company behind the battle royale game Fall Guys: Ultimate Knockout. Fall Guys was released in August 2020 and follow a somewhat similar style of gameplay to Epic’s Fortnite. Epic Games reported that it would continue to invest in the game after the acquisition. Furthermore, it acquired Harmonix, a developer of music-themed video games. Following the acquisition, Harmonix is expected to create musical journeys and gameplay for the Fortnite metaverse with the intention to transform gamers from passive listeners to active listeners.

In April 2022, Epic Games announced USD 2 billion in funding from  Sony and Kirkbi, the parent company of the Lego Group, split equally. This valued the company at USD 32 billion. The round follows Epic’s USD 1 billion funding round led by Sony Group Corporation in April 2021, which valued Epic at USD 28 billion. The fresh capital will fund its metaverse aspirations and builds on its partnership with Lego to build a metaverse targeting kids. The metaverse is expected to prioritize children’s well-being and safety.