Fortnite’s Success Increases the Worth of Epic Games to $8 Billion
Fortnite’s Battle Royale mode is a success story that seemingly has no end in sight. Epic Games certainly won’t make any in the near future, especially considering all the dough the company’s raking in. According to a Bloomberg analysis, the current value of Epic Games ranges between $5 billion and $8 billion.
These numbers are incredibly impressive on their own. However, when taking into account the company’s worth just six years ago, Epic’s growth in value is astronomical. When Tencent, the Chinese conglomerate which recently acquired 5% of Ubisoft shares, purchased a 40% stake in Epic in 2012, Epic’s value was a whopping $825 million.
By comparison, if Epic was presently up for sale, it could be worth upwards of $14 billion. Analyst Timothy O’Shea says these numbers are “based on the trading multiples of peers Electronic Arts Inc. and Activision Blizzard Inc.” O’Shea adds that, hypothetically, buyers would request a discount as there’s no guarantee that Fortnite can maintain such growth. However, analyst Michael Pachter notes that “even if sales were to fall to $1 billion a year — half of its current estimate — the company could still reasonably command $7.5 billion in a sale.”
With Fortnite recently crossing $1 billion earned in revenue and generating daily sales of $2 million on mobile alone, no part of this news is particularly surprising. Interestingly, Epic Games as a whole isn’t the only entity cashing in dollars worth the billions off of Fortnite’s success. The Bloomberg report also states founder and CEO Tim Sweeney is now a billionaire.
Of course, the popular shooter doesn’t count for the sole source of Epic’s increase in wealth. Other aspects of the business such as Unreal Engine makes Epic a profit as well. Yet, there’s no denying that Fortnite carries a bulk of the weight. Given the continued excitement surrounding new updates and the game’s future, it won’t be slowing anytime soon.
[Source via GamesIndustry.biz]