Epic Games, the company behind the highly popular battle royale title Fortnite, just announced that it recently closed another round of funding valued at $1 billion. As a result, the company's equity valuation is now up to $28.7 billion.
What Does Epic Games' Billion-Dollar Funding Round Mean?
The COVID-19 pandemic has done wonders for the already-booming video game industry which was already set to grow even bigger before 2020. However, the recent situation that forced everyone to stay at home has resulted in a dramatic surge in the time and money people spend while playing video games.
One of the biggest beneficiaries of this is Epic Games.
As mentioned earlier, Epic Games developed Fortnite. The 2017 title reported an estimated $5 billion in revenue in 2020 alone. In addition to this, Epic Games also owns the digital games distribution platform, Epic Games Store.
At the moment, the said store is operating at a loss, but this is all part of their grand strategy. Epic wants to widen their reach and eventually lower customer acquisition costs. Its current tactic involves offering a mix of free games to entice users to switch to their platform, as well as securing exclusive titles such as the PC version of Kingdom Hearts and Hitman 3.
With that said, the billion-dollar funding round should position Epic Games to take an even bigger advantage of the still-booming market.
One of the biggest investors in the latest round is Sony. The minority owners of Epic Games dropped $200 million dollar on Epic Games. Sony's investment is said to build "on the already close relationship between the two companies." In total, Sony have now pumped a total of $450 million into Epic Games within the past 12 months.
Sony weren't the only ones that took part in the latest funding round for Epic Games. Other investors include KKR & Co Inc, Baillie Gifford, and Appaloosa.
As per the funding announcement, Tim Sweeney, Epic Games' Chief Executive Officer, will remain the company's controlling shareholder following the investments.
Speaking of Sony, both Epic games and the developers of PlayStation recently teamed up to bring one of Sony's biggest and most recent first-party title protagonists, Aloy, from Horizon: Zero Dawn, into Fortnite. The lone Nora seeker is expected to arrive in Fortnite on April 15 along with a new limited time mode.