A gamer plays the video game ‘Fortnite Battle Royale’ developed by Epic Games during the ‘Paris Games Week’ on October 26, 2018 in Paris, France.
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Epic Games, the video game giant behind the hit title “Fortnite,” said Thursday that it was valued at $17.3 billion after a $1.78 billion funding deal.
The Cary, North Carolina-based firm said the investment came in the form of primary capital and secondary purchases, meaning some investors bought new shares while others bought stakes from existing shareholders. Epic said the investment included a $250 million strategic investment from Sony, which it announced last month.
Epic announced that a number of new investors have bought into the company, including Baillie Gifford, funds and accounts managed by BlackRock, Fidelity, Lightspeed Venture Partners, the Ontaria Teachers’ Pension Plan Board, funds and accounts advised by T. Rowe Price and hedge fund manager David Tepper. Existing backers KKR and Smash Ventures also increased their holdings, Epic said.
“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,” Epic founder and CEO Tim Sweeney said in a statement Thursday. “We are delighted to have them as part of the Epic family.”
Epic will continue to only have a single class of common stock outstanding and remains controlled by Sweeney, the firm said.
The company has become a force to be reckoned with in the $150 billion gaming industry thanks to the continued rise in popularity of “Fortnite.” The battle royale game now has a total of over 350 million players, according to Epic. It has become a big revenue driver for the firm, with a free-to-play model that generates income from in-game payments for cosmetic items like skins.
But Epic is also known for its Unreal game-engine software, which powers many of the world’s top games. The company also runs an online video games store that competes with Valve’s Steam.
The video game industry itself has experienced a boom in demand as consumers have turned to interactive entertainment for escapism in the face of the coronavirus pandemic. On Thursday, for instance, Nintendo posted a huge 428% rise in fiscal first-quarter operating profits, as sales of its “Animal Crossing: New Horizons” game almost doubled.
Epic’s $17.8 billion valuation represents a roughly 19% climb on the $15 billion the company was worth back in 2018. Chinese tech giant Tencent holds a considerable minority stake in the firm. It’s not clear yet whether the company has any plans to go public.