It’s no secret that Fortnite has been a major boon for game developer Epic Games, but a clear indicator of the scale of the game’s financial accomplishment was recently revealed when the software developer reported $3 billion in profits for 2018. While there’s little doubt that Fortnite‘s unprecedented level of success has been a key ingredient to Epic Games’ most profitable year ever, it can’t be given all the credit. In addition to equally good luck and timing, Epic has also made shrewd decisions over the years – with some of the most notable having been made just in the past month – that will likely continue to contribute to the company’s growing success.
The most remarkable thing about Epic’s 2018 swell is that the company seemed to teeter on the brink of crisis back in 2012. While the storied game and software developer has managed to remain private since its 1991 founding, the company’s struggles were made publicly known when Chinese investment giant Tencent acquired 40 percent of Epic’s shares in exchange for a major injection of capital. This major change coincided with a period of relative unrest at Epic, precipitated by the firm’s decision to conclude its partnership with Microsoft in production of its Gears of War franchise, the closure of some Epic studios, and the high-profile departure of key Epic staff, including Gears of War‘s designer Cliff Bleszinski and producer Rod Fergusson. Coupled with the Tencent acquisition and the rise of the games as a service model, these events appeared to be the writing on the wall for Epic. However, Fortnite, a cartoony hybrid of the survival and tower defense genres, was also announced by Epic in 2012, and the game has gone on to become one of the most popular games in history since its 2017 release.
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It’s this path of near-death and unparalleled recovery that has seen Epic Games rake in $3 billion in profits this year, according to a TechCrunch report. Being a privately traded company, the report can say little about Epic’s estimated revenue stream in 2018, but it can be safely assumed that it was a massive sum. When taking only Fortnite‘s massive, rotating catalog of cosmetic microtransactions of up to $20 each into account and multiplying it by over 100 million players, the $3 billion figure starts to make sense.
And it can be assumed there will be a lot more where that come from, as Epic added yet another money-maker to its arsenal earlier this December when it launched the Epic Games Store which looks to tap into the digital distribution market that Steam has enjoyed almost unrivaled up to now. In addition to Epic’s recent announcement of a free software suite for developers that want to implement cross-platform multiplayer in their games, the Epic Games Store marks another offshoot of Epic’s lucrative software arm, having long been collecting licensing money for its widely used Unreal Engine.
It’s hard to deny that Epic is on fire right now, but the sustainability of the flames it has stoked is questionable. While this is hardly Epic’s first time around the bend, having previously seen its prosperity and popularity rise and fall between releases of its Unreal Tournament and Gears of War franchises, it has never before had a financial success on its hands on the titanic scale of Fortnite. Just recently, the runaway popularity of the game has caused problems for the developer when Alfonso Ribeiro and others took legal action over dances they claim to be their intellectual property. Most, if not all, of these lawsuits are unlikely to result in unfavorable verdicts for Epic, but those that succeed may inspire others to seek legal recourse from what the public perceives to be a money tree. Finally, in times of crisis, Epic has established that it is more than capable of adapting and restructuring itself, but at what cost? Epic’s previous flirtation with doom resulted in the firm completely overhauling everything about itself and put a foreign investment juggernaut at its helm, and any future catastrophe post-Fortnite may morph Epic into something even less recognizable.
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