Fortnite developer Epic Games announced it has raised $1 billion in new funding, increasing the company’s valuation to $28.7 billion. The funding included $200 million from Sony Group Corporation who has previously invested in Epic Games. Other investors in this funding round include Appaloosa Management, Baillie Gifford, Fidelity Management & Research Company, funds and accounts advised by T. Rowe Price Associates, Ontario Teachers’ Pension Plan Board, funds and accounts managed by BlackRock, Park West, KKR, AllianceBernstein, Altimeter, Franklin Templeton and Luxor Capital.
“We are grateful to our new and existing investors who support our vision for Epic and the Metaverse. 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,” said Tim Sweeney, Epic Games CEO and founder in the company’s April 13 announcement.
Kenichiro Yoshida, chairman, president and CEO of Sony Group Corporation, shared his thoughts on the synergy between the two organizations.
“Epic continues to deliver revolutionary experiences through their array of cutting-edge technologies that support creators in gaming and across the digital entertainment industry. We are excited to strengthen our collaboration to bring new entertainment experiences to people around the world. I strongly believe that this aligns with our purpose to fill the world with emotion, through the power of creativity and technology,” Yoshida said.
Valued at $1.78B last summer
Last summer, the Fortnite developer was valued at $17.3 billion, after a $1.78 billion funding round. During that round, Sony invested $250 million. Other investors included Baillie Gifford, funds and accounts managed by BlackRock, Fidelity Management & Research Company, Lightspeed Venture Partners, Ontario Teachers’ Pension Plan Board, funds and accounts advised by T. Rowe Price Associates, Inc., David Tepper, KKR and Smash Ventures. According to Crunchbase, Epic Games has raised a total of $4.4 billion from 29 investors.
“Having the support of leaders in the financial community accelerates Epic’s efforts to build a new kind of digital ecosystem using real-time 3D technology, services that connect hundreds of millions of people, and a digital storefront that offers a fair business model. We are delighted to have them as part of the Epic family,” said Sweeney after the August 2020 funding round.
Battle with Apple
Also last summer, Epic Games had a very public battle with Apple when the game developer encouraged users to pay through their mobile-app directly, bypassing Apple and Google and their revenue share agreements. As a result, Apple booted Fortnite from the App Store, and Epic Games filed a lawsuit, alleging that Apple was violating the Sherman Antitrust Act with anti-competitive and monopolistic behavior. They go to court on May 3, according to Tech Radar. Google also removed Fortnite from the Google Play store last year.
Since then, Epic Games has launched a Fortnite Crew Game subscription which can be purchased directly through the Fortnite Item Shop or the Battle Pass purchase screen. For $11.99 a month, Fortnite Crew members get lots of extras and exclusives available only to subscribers, including Battle Passes for the current season, 1,000 V-Bucks (virtual currency) to spend in the shop on items like outfits and emotes, and an exclusive monthly Crew Pack which features an outfit plus at least one matching accessory like a glider, pickaxe or emote.
This has been an incredibly busy year for Epic Games with battles, subscriptions, funding and valuations. The game is hugely popular. According to Sensor Tower, between May 2018 and its removal from the App Store, Fortnite had been downloaded more than 133 million times on iPhones and iPads, bringing in roughly $1.2 billion, 30% of which went to Apple under a revenue share agreement. It hasn’t been as popular on Google, but it was only in the Google Play Store between April and August of last year. It was downloaded 11 million times, generating about $10 million in sales, with 30% going to Google. Despite the lawsuits, investors see the huge potential Epic Games and Fortnite have for growth. They are betting on the long game, and they are likely to reap incredible rewards as a result.