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Epic Games Company Analysis
- 2. Epic Games • Headquarters – Cary, North Carolina • Founded in 1991 • Not Public • Fortnite Released July 2017
- 4. Products Free to Play Cross-Platform Special Events
- 6. Fortnite Active Players Year Active Playing Users (In Millions) 2018 78.3 2019 75.5 2020 80.4
- 7. Financial Info - Fortnite Year 2018 2019 2020 Revenue (in Billions) $5.4 $3.7 $5.1
- 8. Financial Info – Epic Games Year 2018 2019 2020 Gross Revenue (In Billions) $5.654 $4.221 $3.582 Gross Profit (In Billions) $3.737 $1.831 $1.420
- 10. Business Model Cosmetic Items Battle Pass
- 11. Epic Games Leadership Tim Sweeney CEO and Founder Mark Rein VP Since 1992
- 12. Short History July 2017 October 2017 March 2018 May 2018 February 2019 Fortnite Released Battle Pass Released Cross Platform Play Released Collaborations Begin First Fortnite Concert
- 13. What’s Hot
- 14. Secret Sauce Free to Download In-App Purchases
- 15. Competition Fortnite Call of Duty: Warzone Apex Legends PUBG Free to Download/Play In-App Purchases Battle Royale Mode Collaborations/ Concerts
- 16. Prediction • Fortnite will eventually fail • Epic Games can continue to succeed by replicating the Fortnite business model
- 17. References 1. https://www.epicgames.com/site/en-US/about 2. https://www.retirebeforedad.com/epic-games-stock-ipo/ 3. https://www.statista.com/statistics/1234106/epic-games-annual-revenue/ 4. https://www.businessofapps.com/data/fortnite-statistics/ 5. https://www.statista.com/chart/16239/number-of-registered-fortnite-players/ 6. https://www.wsj.com/articles/fortnite-creator-epic-games-valued-at-nearly-15-billion- 1540577025 7. https://s3.documentcloud.org/documents/20696836/epic-apple-trial-epic-games-exhibit.pdf 8. https://en.wikipedia.org/wiki/Epic_Games 9. https://www.forbes.com/profile/tim-sweeney/?sh=131f3add67b3 10. https://www.ign.com/articles/2018/11/06/the-history-of-fortnite-so-far
Editor's Notes
- Today, I am going to present on Epic Games, specifically on their product Fortnite. I chose to present on Epic Games and Fortnite because it had a huge boom of popularity and has continued to be successful since without completely falling off and becoming irrelevant like many other games would have.
- Epic Games is headquartered in Cary, North Carolina, and it was founded in 1991. Epic Games has not gone public, with no apparent plans to do so in the upcoming couple years. Fortnite was released in July of 2017.
- Three main problems that Fortnite is looking to address, would be not being able to play video games with friends online because cross-platform is not allowed for a lot of popular games, most video games being too expensive for kids to purchase on their own, and keeping a high retention rate and keeping users interested in a specific video game long term.
- Fortnite combats these problems by allowing cross-platform play, offering the game free to download and play for all users, and by creating special events like concerts or including cosmetic upgrades through in-app purchases. Fortnite and Epic Games are targeting a younger audience, of kids, teenagers, and young adults who have a limited amount of money and have a lot of free time to play video games with friends. The company reported that 62.7% of their users are in the 18-24 age demographic.
- Is the company profitable? Epic Games is valued at nearly $15 billion. Fortnite has provided Epic Games with a great source of revenue and allowed the company extra resources to focus on the development of future products and missions.
- Fortnite is able to make money despite not charging for the game, by utilizing in game purchases. A user will purchase V-bucks like shown, and they are able to use these v-bucks to purchase two things.
- The first, is cosmetic items. These are dances and outfits you can customize your character with. The second thing you can spend v-bucks on is a battle pass, which is a tier system that includes outfits, dances, and other exclusive items that you can only get from buying the pass and playing the game. Neither thing offers any competitive advantages, they are just cosmetic and make it so you are able to customize your character however you want.
- Tim Sweeney, is the CEO and founded Epic Games in 1991. Epic games was a one-man team until 1992 when he brought on Mark Rein to be Vice President of the company. Both Tim and Mark have held their same positions since and are leading the charge to create what Epic Games and Fortnite is now.
- July 2017 – Fortnite released October 2017 – First Battle Pass Released March 2018 – Cross Platform Play Released May 2018 – Collaborations Begin with Thanos February 2019 – First Fortnite Concert
- In Fortnite, what’s hot is the customizations you can make to your character. You can purchase movie characters and Fortnite originals, dances from tok-tok, or even a glider from Star Wars. Epic Games releases customizations that are related to other things in pop-culture, which draws people to make the purchases to get these items.
- The secret sauce for Fortnite and Epic Games is being Free to Download, and how they instead make their money from In-App Purchases.
- Fortnite has been able to succeed due to pop-culture, and quite frankly memes. The large boom in success from the beginning was well deserved, when they created a free battle royale game that is accessible to where anyone can play, and do it for free, but a company can’t expect to keep the retention up for long. So far in 2021, it is being reported that there are about 22.5 million active Fortnite users (down from 80.4 million in 2020). Despite even an Ariana Grande performance, there has been a sharp decline in the number of users. That means less in-app purchases, and less money that Epic Games is then able to turn around and spend on collaborations. Although I am predicting that Fortnite will fail, Epic Games will continue to succeed through other games and products that have a similar model to Fortnite. Making games/apps free in order to draw users in, and then offering in-app purchases will be a staple to Epic Games, and they will be able to re-create it for new games.
- In 2018, Fortnite Mobile was 1.8% of the total re venue. In 2019, Fortnite Mobile was 12% of the total revenue. In 2020, Fortnite Mobile was 21% of the total revenue.