Epic Games deal review

ZOOM 22.06.2023

About Epic Games 

Epic Games is the leading interactive entertainment company and 3D engine technology provider with an end-to-end gaming platform, including AAA gaming titles and software tools for developing next-gen games.

Video Demonstration of the Game Creation Platform

Product Assortment

Epic Games products attract over 400 million players and developers worldwide:

1. Fortnite          
   World leader in total gameplay time.
2. Unreal Engine          
   The world's most popular engine for creating AAA games.
3. Epic Games Store          
   The fastest growing game distribution platform (80% annual growth).

Fortnite - One of the biggest games in the world!

Fortnite - One of the largest games in the world and the No.1 game in total playtime, with over 500 million users.

• No.1 game on PS5 and XBOX
• Top 3 game on PC

Fortnite maintains a healthy base of over 70 million active users per month, thanks to constant content updates and partnerships with leading developers.

During 2022, Fortnite collaborated with more than 30 pop stars, athletes, and popular characters, such as:

• The Mandalorian, (Star Wars)
•  Kratos, (God of War)
• Thanos, (Marvel MCU)
•  and over 25+ sports stars (LeBron James, Neymar Jr.), celebrities (Ariana Grande, Travis Scott) and fictional universes (Terminator, The Walking Dead, Naruto, Rick and Morty, Predator etc.), are included in the game

Fortnite is not just a game, it's a social platform for creating and sharing immersive virtual experiences based on user-generated content.

Royal Party - conducting live events in Fortnite

• 27 million visitors during the Travis Scott concert
• 120 million gross revenue on the day of the Travis Scott event
• 12.3 million concurrent viewers at the Ariana Grande concert
• 10 million concurrently attended the Marshmello event

Unreal Engine - The world's most popular engine for creating AAA games!

Unreal Engine is a comprehensive game development toolkit created by Epic Games. It's a powerful engine that allows developers to create games of various genres, from simple 2D games to complex 3D projects with high-quality graphics.

Unreal Engine offers a number of advantages for game developers, including:

1.  Powerful graphical capabilities: Unreal Engine is known for its superior visualisation and rendering capabilities, enabling the creation of high-quality graphics and complex visual effects.
2.  BluePrints: The Blueprints visual programming system allows even non-programmers to create complex game logic without writing code.
3. Multi-platform capability: Unreal Engine allows you to develop games for a wide range of platforms, including Windows, MacOS, Linux, PlayStation, Xbox, Nintendo Switch, iOS, Android, and VR systems.
4. Physics Engine: Unreal Engine includes a realistic physics engine for modeling motion and collisions.
5. Active community and extensive learning resources: Unreal Engine has a large and active developer community, as well as an extensive library of learning materials, making it easier to learn and use the engine.
6. Marketplace: Epic Games provides a store where developers can buy ready-made assets or sell their own, which significantly accelerates the development process.

Epic Games Store - The fastest growing platform for game distribution!

Epic Games Store - 80% Annual growth for 2022, the fastest growing platform for game distribution! The platform sells games created by Epic, as well as third-party developers.

The Epic Games Store is a key element of Epic's ambition to expand the gaming community around their ecosystem.

Main advantages of using Epic Games Store for game production companies to sell their games:

1. More favorable monetization terms: Epic Games Store takes only 12% of sales, allowing developers to keep a larger portion of the profits.
2. Huge audience: thanks to the popularity of Fortnite, Epic Games Store has a large number of active users, increasing game visibility.
3. Financing from Epic Games: the company sometimes offers financing for exclusive games, which is especially beneficial for independent developers.
4. Support for the Unreal Engine: being part of the same company as Unreal Engine eases integration and game publication.
5. Opportunities for exclusive content: Epic Games Store encourages developers to create exclusive content for the platform, attracting additional audience.

Main indicators of Epic Games Store:

• Launched 2019
• 230M+ Registered users
•  68M+ Active users per month
• 820M+ Users spent in 2022
• Windows/MacOC Systems

Epic Games Revenues

Whilst the company is technically ready for an IPO, it will wait for more favorable market conditions, giving investors significant growth potential.

Epic Games' revenue of 4 billion dollars was received from in-game purchases of Fortnite, Unreal Engine, and EGS licensing royalties.

The next generation strategy of Epic Games is expected to increase revenue by 2.5 times and reach the 10 billion mark within the next 3-5 years.

Epic Games will focus on rebalancing revenue streams and investing in new events and IPs, which will lead to an IPO valuation of $57-88 billion in 3 years.