Epic Games raises another $1B from investors. Video game maker now valued at $29B
Epic Games has completed another astronomical round of funding from investors, making the Cary-based company worth nearly $29 billion and easily making it the most valuable venture-backed company in North Carolina.
The Cary-based video game developer said Tuesday it raised another $1 billion from investors — money it will use to continue building a dominating roster of video game titles and improve its Unreal graphics engine.
Tim Sweeney, the company’s founder and CEO, will remain the controlling shareholder of the company.
Investors in this round include Sony (which contributed $200 million to the round); Appaloosa Management, the hedge fund run by Carolina Panthers owner David Tepper; Fidelity; Baillie Gifford and others.
Last year, Epic raised $250 million from Sony, and, in 2018, the company raised $1.25 billion from investors.
In a statement, Sweeney said the money will be used to supports its vision of building a “metaverse,” a term often used to describe a virtual ecosystem where people can gather in real time for shared experiences.
It’s a concept often brought up by Sweeney, most recently when the company bought the video game developer behind the popular “Fall Guys” game.
Perhaps the best example of these shared digital experiences can be seen in the way Epic hosts concerts and movie showings in the “Fortnite” video game. Rather than compete against each other in a traditional video game structure, these events allow users to socialize via their avatars in the game.
The company previously bought thethe video chat app Houseparty as a way to make its video games more social, too.
“We are grateful to our new and existing investors who support our vision for Epic and the Metaverse,” Sweeney said. “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.”
Future growth
Epic Games did not make anyone available for an interview on the funding round. But the money will give the company a significant war chest with which to make more acquisitions. In addition to the Houseparty and “Fall Guys” purchase, Epic also bought the video game developer behind the popular “Rocket League” video game franchise.
The $1 billion in funding should also allow the company to continue plowing investments into operations that are currently losing money, like its Epic Games Store, a video game marketplace that is competing against entrenched businesses like Steam.
Epic has offered free downloads of some video games through its Epic Games Store in recent years to get customers to leave Steam for its own marketplace. In recent legal filings in its lawsuit against Apple, it was revealed that strategy is causing the Epic Games Store to lose $330 million, gaming website IGN reported.
However, Epic said it forecasts that the store could begin making profits in 2023. “[I]t has proven to be a fantastic success in reaching gamers with great games and a fantastic investment into growing the business,” Sweeney said Saturday in a tweet.
In less than a month, that lawsuit with Apple will resume again in court.
Epic is attempting to prove in court that the iPhone maker and its App Store ecosystem are an illegal monopoly that unfairly blocks the free distribution of apps on its phones. On iPhones, apps can only be downloaded through its App Store, which charges a 30% fee on in-app purchases.
Epic is arguing that its app developers should be able to bypass the App Store and its fees.
The two companies will meet in court on May 3.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
