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Epic Games banked a $3B profit in 2018

266 points by bdz 8y ago

arnm 8y ago
Guess everyone got a nice bonus this holiday season jeez
- joejerryronnie 8y ago
  By "everyone" I assume you mean investors and upper management.
  - pageandrew 8y ago
    Eh its a tech company. Bonuses usually make their way down to the lower ranks too.
    - user5994461 8y ago
      Meaning they will be provided with free beverages.
      - joejerryronnie 8y ago
        And my favorite perk - “unlimited vacation”. Nevermind the social stigma is so strong against taking vacation that employees use far less than if they were just given a certain number of vacation days.
        techsin101 8y ago
        True story .. took 1 PTO per month.. took total of 3 in 4 months I was told I'm abusing it and no longer available to me
beastman82 8y ago
Tim Sweeney is a good person, good for him
- limaoscarjuliet 8y ago
  I can confirm. We wrote couple of games together in 1995-98 (Fire Fight being the biggest). He is genuinely a good guy.
  - z0r 8y ago
    Fire Fight! That's a blast from the past. I remember being amazed by how cool it looked and felt to play when I was 12 or 13.
    - limaoscarjuliet 8y ago
      Yup, been some fun to write. We did it in Cracow Poland, no internet, barely any money, these were times!
- TillE 8y ago
  ZZT was such an influential game/editor for me. I just wish they woulda stuck with his original "Epic MegaGames" name, much better to have a funny name than one that can be read as a bit too self-important.
- archagon 8y ago
  I’m rather surprised that whiz kids like Sweeny and Carmack often end up becoming excellent executives as well.
  - vocatus_gate 8y ago
    What is Carmack up to these days? Last I heard he was still fiddling with VR stuff and doing rocket hobbyist projects on the side?
sand500 8y ago
Hopefully this shows others that you can make successful games without pay to win mechanics.
- tudelo 8y ago
  Of course there are games that already have proven this, most notably League of Legends (which is also mentioned in the article).
  - jjeaff 8y ago
    I'm thinking candy crush was pre-league of legends. It brought in $1B revenue for 2018, which is the highest ever and still growing.
    - alexland 8y ago
      League of Legends has been around since 2009, versus Candy Crush Saga in 2012.
    - therealdrag0 8y ago
      Wow I had to look this up. Didn't know it was so big still. https://variety.com/2018/gaming/news/candy-crush-saga-1-billion-1202908004/ https://variety.com/2018/gaming/news/candy-crush-saga-1-bill...
  - jsnell 8y ago
    Huh? LoL is blatantly P2W, they sell two kinds of in-game advantages.
    - Jarwain 8y ago
      What are those?
      - hackerman12345 8y ago
        Heroes. A good hero selection is p2w because you may not have a reasonable counter to xyz enemy. They used to sell Runes too (I believe an update made this invalid). Of course, you can get all this stuff for free just by playing 100s of hours, if you have the time/will.
usaphp 8y ago
What does HN people think on the whole idea of stealing concept from PUBG? I am kind of divided on this topic.
- KaoruAoiShiho 8y ago
  The fast follower beating the original by offering a lower price is a well established business trend. Usually works pretty well. I just don't understand why PUBG isn't free yet.
  - dabeeeenster 8y ago
    PUBG doesn't have the scope for skins in the same way that Fortnite does. Fortnite's art style lends itself way better to crazy skins. It's also played more by a younger generation who are more likely to buy digital accessories (that's just IMO tho)
    - KaoruAoiShiho 8y ago
      Because it's free, that's why it's played more by kids. Until you remove that huge distinction from the equation it's hard to claim anything else had as much of a factor. IMO if PUBG was free when Fortnite came out Fortnite would not have the marketshare it has today. Things like crazy skins is just a matter of willingness rather than anything intrinsic to the game.
- 21 8y ago
  What about Mario clones? (platformers) Doom clones? (first person shooters) Warcraft clones? (real time strategy) ...
  - fredophile 8y ago
    I agree with your point but a funny thing about this list is that I can think of earlier games in the genre for both FPS and RTS off the top of my head. Dune 2 is the earliest RTS that I'm aware of and Wolfenstein is probably the earliest example of an FPS. I'd say this probably strengthens your point rather than weakening it.
Reedx 8y ago
> ...has popularized the battle royale category — think Lord of the Flies meets Hunger Games — almost single-handedly... Almost single-handedly? This is a bizarre claim and it's like rewriting history.
- minimaxir 8y ago
  This can be debated. Although Rust/H1Z1/PUBG were certainly popular battle royale games before Fortnite, Fortnite was the only one that brought it mainstream, outside the hardcore gamer ecosystem.
  - jVinc 8y ago
    Battle royal was already popular enough for Epic to drop everything they had and shift focus to the genere without any doubt that it was the correct thing to do. To give them credit for the popularity of the genre is to rewrite history.
    - thedaemon 8y ago
      This is exactly it! Fortnite was a team based fps/rts before it saw the cash cow that is the Battle Royale.
    - ethbro 8y ago
      Wasn't the iPhone the first smartphone? /s
  - earenndil 8y ago
    I disagree. PUBG was _insanely_ popular well before fortnite showed up.
    - justwalt 8y ago
      Right. PUBG is still immensely popular with hundreds of thousands of steam players daily, and I believe it saw player growth in a recent month.
  - 8y ago
mbesto 8y ago
> Epic grossed a $3 billion profit for this year What does this even mean? Net income? Top line gross profit (meaning minus COGS), which is normally like 80% GM for heavily software enabled businesses? Ugh, tech reporters.
- symisc_devel 8y ago
  Pure profit after taxes apparently.
- jjeaff 8y ago
  Yes, gross profit is usually understood as revenue minus cogs. But it doesn't seem like the reporter is using it correctly here.
  - mbesto 8y ago
    I'm about 63%* sure the reporter is referring to revenue. * made up number
    - iiv 8y ago
      Revenue and profit are two entirely different things. If it says profit, I feel like it's more likely it's profit rather than revenue.
      - mbesto 8y ago
        You must be new to TechCrunch articles.
- crispyambulance 8y ago
  > What does this even mean? Net income? Not sure what exactly it means, but it sounds like A LOT. The number of employees at Epic appears to be ~700. I do hope that the people who did the work are getting paid handsomely. They should be, right?
- rchaud 8y ago
cheeseomlit 8y ago
Shame none of that is going towards UT development and Epic scrapped that project. Considering the state of the new Quake game I guess that's the end for Arena shooters.
- munchbunny 8y ago
  It's too bad, but arena shooters have been dying as a category ever since around UT3. I'm hopeful they'll make a resurgence in the future.
  - jplayer01 8y ago
    I thought Quake Champions would be the best chance for the genre to be revived. With how popular LoL and DotA and Overwatch are, it seemed like a mix of the traditional arena shooter with special abilities/spells would be a good way to attract that audience. It hasn't. Maybe because Bethesda's efforts still lean too heavily on traditional Quake and they're unwilling to really embrace the RPG/ability aspect of MOBAs. Unfortunately, so many developers have tried and failed to make a "modern" arena shooter that I don't see anybody else giving it an interesting, worthy take on a hybrid.
    - cheeseomlit 8y ago
      The failure of QC has nothing do with them not embracing the RPG/ability aspect of MOBAs, that was always just a gimmick anyways (when QC introduced gametypes without abilities they ended up being more popular). It has everything to do with Bethesda utterly mismanaging the entire project into the ground. They hired Saber Interactive (probably the cheapest studio they could find) instead of going with more expensive in-house development with iD. The engine is a frankenstein monster of old iDtech with Saber's console-oriented crap piled on top and the result is woeful performance, memory leaks, desync, and laughable netcode all of which has not been addressed in the 2 years it's been in "beta". Add in the cancerous "games as a service" model that does not allow for any custom content, maps, or community servers (which were always the lifeblood of quake) and there you have it
deleted 8y ago
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disishhsha 8y ago
$3B profit doesn’t really seem consistent with $15B valuation. Tech companies these days seem valued at 20x revenue or more. Why would they bother raising $1.25B at that price? I suppose Fortnite is a fad, so there is a pessimistic case to be made to cash in as much as possible.
- nikanj 8y ago
  ”Tech companies” is a wide umbarella. An enterprise-oriented SaaS can justify a high multiplier like that, because their churn rate is low. Video games are a much more volatile business, and the valuation multiplier reflects that.
- ethbro 8y ago
  The impression I get is that the video game industry is extremely hit / miss. Hence the large graveyard of publishers and developers who at one time made excellent, well-selling games. (E.g. Interplay Games) Money comes cheaply at times of hits. Money comes much more expensively at times of misses. So it behooves Epic to build up a war chest if they can.
  - disishhsha 8y ago
    It does speak to a pretty conservative mindset - when you just made $3B cash free and clear, selling some of that golden goose for $1.25B.
- Mikeb85 8y ago
  Growing tech companies are valued at 20x revenue. Mature companies aren't. Epic was in trouble and managed one hit, that revenue isn't guaranteed to last, hence the conservative valuation.
- baby 8y ago
  if Fortnite is a fad, is the moba genre a fad as well? Because LoL and Dota2 seem to still be going strong.
- rchaud 8y ago
  The $3B figure is an estimate. Techcrunch doesn't have the real numbers. That would explain why they don't compare the $3B to Epic's 2017 numbers; because they don't have those either.
aphextron 8y ago
I don't really like Fortnite, but I'm really really happy for Epic's success. PUBG was a flaming dumpster heap that only caught on because the Battle Royale mechanic is naturally fun and people were clamoring for that type of game. But it was an unqualified mess from a subpar developer, and that always annoyed me because gamers deserved better. Now Epic has been rescued from sliding into obscurity and they've got massive coffers to continue working on Unreal 4. Couldn't have worked out better.
- moron4hire 8y ago
  "Gamers deserve better"? What is that supposed to mean?
  - yqh 8y ago
    I understood it as "people who like this genre deserve a game that is not crap"
    - moron4hire 8y ago
      It's difficult for me to imagine a game that 50 million people bought and played for several hours as "crap". It has its warts and there are certainly things I don't like about it, but 50 million people don't accidentally buy Shaq Fu or Big Rigs or whatever is the latest Sonic the Hedgehog game.
  - axus 8y ago
    Replace Gamers with "Customers", and better with "a competitive marketplace, instead of a monopoly".
  - aphextron 8y ago
    > "Gamers deserve better"? What is that supposed to mean? It means they deserve better than all the garbage that's been pushed out over the last 5 years or so since Unity and Unreal became free, and Steam relaxed its submission standards. There's been a massive wave of terrible "games" that people are just forced to accept because they don't know any better. I'm not hating on indie game devs in general, there are of course plenty of amazing ones. But the real problem is this trend of a small group of devs forming a "studio", coming up with really ambitious plans for a huge game after learning Unity for a month, and then releasing early access garbage like PUBG and abandoning it when they realize making a triple-A game takes years of effort by a vast team of expert professionals.
Cu3PO42 8y ago
I think it is commendable that Epic used some of this profit to change their Unreal Engine Marketplace rates in favour of the developers. Similar to their store that is mentioned in the article, the revenue split is now 88/12. This change will be applied retroactively to all past transactions [1]. My understanding is the split was previously 70/30 as common in other online stores—those should be some hefty payouts for some developers. In my opinion this is going above and beyond and would make me feel good about supporting Epic through purchase of cosmetics in Fortnite if I played the game, for example. EDIT: I previously mistakenly referred to the UE Marketplace as store, which is now at best misleading since they did launch a proper game store last month. Thanks to jsnell for catching this. [1] https://www.unrealengine.com/en-US/blog/epic-announces-unreal-engine-marketplace-88-12-revenue-share https://www.unrealengine.com/en-US/blog/epic-announces-unrea...
- ehsankia 8y ago
  I'm confused, Epic just launched their store this month. What games are these "previous transactions" for? Do you have a specific list of games that sold with the previous 70/30 cut, and for how long? EDIT: From what I remember, the only games on the Epic launcher were Unreal Tournament, Paragon, Fortnite and Shadow Complex.
  - jsnell 8y ago
    The OP was talking about the Unreal Engine Marketplace (for selling game assets to developers), not about the Epic Games store (for selling finished games to players). I see the source of your confusion though, since the article was never talking about the UE Marketplace.
    - Cu3PO42 8y ago
      It appears I didn't parse the article correctly myself. Thanks for catching this, I'll edit the OP to be clear on this.
- a13n 8y ago
  Eh, that move is definitely nice for developers, but it's still self-serving. They're in an uphill battle against steam's moat, and increasing rates is a way of attracting more developers.
neilsimp1 8y ago
Is anybody else bummed how Fortnite's success has drawn development away from the new Unreal Tournament? I don't care about Fortnite, I just want UT to continue to be updated. I don't think it's had an update since June.
- fraXis 8y ago
  Not just drawn development away, but they are no longer developing it. https://www.digitaltrends.com/gaming/development-stopped-unreal-tournament/ https://www.digitaltrends.com/gaming/development-stopped-unr...
  - mschuster91 8y ago
    Oh no, sad to hear this. Still regularly shoot around with my gf on classic UT2004...
    - ep103 8y ago
      A guy upthread is mentioning quake champions doom edition as an alternative
bufferoverflow 8y ago
I'm surprised it made so much money. The game is free. Do people really pay much for the skins/characters?
- Slals 8y ago
  Mostly by stealing mom's card.
- ihuman 8y ago
  You can also buy something called a "battlepass", which gives you access to additional challenges every week. By completing these challenges, you can earn additional cosmetic items.
- wyldfire 8y ago
  Yeah, it's nuts. My son plays a lot and seems only mildly interested in skins. AFAIK there is no game advantage to any of the things that you can buy.
- lapnitnelav 8y ago
  Used to do a call center job for the unfamous EA. Back then (and it still probably is), FIFA Ultimate Team was all the rage. What's FUT : a bunch of e-cards of players to get from packages you buy or you trade with players. You can spend 20 bucks but you can also spend hundreds, if not thousands to get your collection.
- deleted 8y ago
  [deleted]
- stupidbird 8y ago
  I remember reading that the average player spends $80 on DLC for Fortnite — so there are a lot of people out there spending well over that to bring up the average from all those $0 players.
- atom-morgan 8y ago
  "Epic Games banked a $3B profit in 2018"
stupidbird 8y ago
Fortnite makes over a million dollars a day... ON iOS ALONE. They've built a money machine.
shmerl 8y ago
Tim Sweeney often complains about MS being a threat to PC gaming, yet there is still no Fortnite for Linux. Also, Epic store doesn't support Linux (yet?).
- ksec 8y ago
  I mean come on, it has got to be a business decision. If Gamers were there, they would have made it. How much investment do you expect them to make when only 1% of the world wide Desktop uses linux and possibly less than 10% of that 1% are gamers? I mean Mac Gamers don't complain as much when they have higher market shares.
  - shmerl 8y ago
    If he is so threatened, his business decision should be to do something about it. Valve did, and push Linux gaming quit a lot. Epic do it very lazily. Good thing their Unreal engine works on Linux, but they didn't put a lot of effort in it. Lot's was done by third party and community developers to make it work.
rchaud 8y ago
The interesting part of this article was that Epic intentionally circumvented Google Play Store and required Android users to download the launcher from its own website. Hopefully this leads to more app developers skipping Google Play and launching solo. Of course most apps won't have the name recognition of Fortnite, but I can't imagine discover-ability inside of the Play Store is any better. I got a new phone recently and had to re-download some apps; Imagine my shock when I opened Google Play and saw that it had become like Google search; crawling with ads for some of the worst, lowest-rung "apps", all of which appear to be some variant of Candy Crush and Clash of Clans. Who honestly wants to fork over 30% to Google for that?
- nikanj 8y ago
  The Apple store is just as bad. I tried finding an app that just takes a photo every n seconds until I press stop. I could find endless pages of apps that claimed to do this - but had 1-star ratings because they couldn't actually do the single thing they were supposed to do. Ugh. I remain pretty convinced that there's an app like this out there, but discovering it is just plain impossible.
  - mikestew 8y ago
    Hmm, I’ve been looking for an iOS project idea recently... Seems like something one could crank out in a weekend. But I’m with you on discovery. Finding something that isn’t going to disappoint me gets harder with time.
    - nikanj 8y ago
      Please poke me at lwahonen@gmail.com if you ever make one :)
  - macintux 8y ago
    I’ve given up on searching the App Store, but I’ve had a lot of luck searching the web. This article looks relevant and useful: https://iphonephotographyschool.com/iphone-time-lapse/ https://iphonephotographyschool.com/iphone-time-lapse/
arminiusreturns 8y ago
Epic lied to Linux devs and stabbed us in the back. I have abandoned hundreds in marketplace assets and moved to godot because of all that money and still a refusal to address Linux as a platform for dev and shipping.
- AgentME 8y ago
  I see several people complain about Linux limitations in this thread. What are the Linux limitations exactly? A) Unreal dev tools can't be used on Linux, B) Unreal dev tools can't be used to purchase marketplace assets on Linux, C) Unreal dev tools can't use marketplace assets on Linux even if you previously bought them on Windows, D) Unreal dev tools on Windows can't make a Linux build if it uses marketplace assets.
- ksec 8y ago
  What exactly did they lied? In terms of Dev?
Waterluvian 8y ago
Fortnite's pivot from failed co-op zombie game to... well, this... is incredible. I would love to have experienced that office environment over that year. I can only imagine that the pivot was a "well, we already have most of the game. What can do we do with it?" hail Mary as they considered what to do short of closure. I may also be misremembering how dire their situation was. But I thought it was quite dire.
- golergka 8y ago
  Fortnite may have been dire as a product, but Epic was surely not in any kind of trouble as a company.
  - lotyrin 8y ago
    It's really odd to watch people see them as "the Fortnite company" and ignore/discount the Unreal engine, etc.
    - Waterluvian 8y ago
      It just completely skips my mind that Epic has more going on for them than games. Not that I've really tried to understand their business units or offering.
    - AJ007 8y ago
      I actually see them as the ZZT company.
      - 1123581321 8y ago
        I learned quite a bit from the simple message passing in ZZT-OOP as well as some about timing and inserting new information into logic loops. Most of my programs were closer to what would be done in Twine today, which makes me optimistic about the generation of future programmers that framework is creating.
      - kbenson 8y ago
lanevorockz 8y ago
All gaming companies could have made huge profits. Most game companies opted to be condescending and preach personal politics into peoples hobbies. It's not about fun but it's about education.
- techsin101 8y ago
  Instead of working on a game for few years and releasing something innovative they want to release new but really 1.2 version every year with 20 dlcs in between. We Map editor - nope Lan gameplay - nope In a way counter strike is better
lupinglade 8y ago
Now finish UT4!
- flor1s 8y ago
  UT4 got killed by the success of Fortnite :(
thosakwe 8y ago
Unreal Engine is honestly awesome. I recently purchased an AAA game called “DB FighterZ,” built on UE, and the game experience is top-notch. It piqued my interest in game programming once again.
ineedasername 8y ago
I'm really happy they're so successful. My son loves it, and from my perspective it's "healthier" than more realistic games like Call of Duty (for his age, I mean. nothing inherently wrong with CoD). All that said, I really don't get the appeal. Although I come from a gaming history that values deep and lore-heavy CRPG & ARPG games. From that perspective I don't see a lot of depth to fortnite, where success seems driven by twitch reflexes and very similar end-games for most matches. That said I love the temporary special features they do. My son & I had a blast jetting around, sniping each other when rocket packs were available, and The infinity gauntlet tie-in was really fun. Anyway, good on Epic!
yonatron 8y ago
"Valve", not "Value"!!
ksec 8y ago
One of the best thing about Fortnite is EPIC porting back all the work and improvement to Unreal Engine, if any of those Unreal Engine Release note improvement seems crazy, since Fortnite it has been insane. And there are still many more to come. At this stage Makes me wonder if Unreal Engine will ever get a major competitor for AAA games. Even Konami are ditching the Fox engine and moving to Unreal.

266 points by bdz 8y ago

arnm 8y ago

Guess everyone got a nice bonus this holiday season jeez

joejerryronnie 8y ago
By "everyone" I assume you mean investors and upper management.
- pageandrew 8y ago
  Eh its a tech company. Bonuses usually make their way down to the lower ranks too.
  - user5994461 8y ago
    Meaning they will be provided with free beverages.
    - joejerryronnie 8y ago
      And my favorite perk - “unlimited vacation”. Nevermind the social stigma is so strong against taking vacation that employees use far less than if they were just given a certain number of vacation days.
      - techsin101 8y ago
        True story .. took 1 PTO per month.. took total of 3 in 4 months I was told I'm abusing it and no longer available to me

beastman82 8y ago

Tim Sweeney is a good person, good for him

limaoscarjuliet 8y ago
I can confirm. We wrote couple of games together in 1995-98 (Fire Fight being the biggest). He is genuinely a good guy.
- z0r 8y ago
  Fire Fight! That's a blast from the past. I remember being amazed by how cool it looked and felt to play when I was 12 or 13.
  - limaoscarjuliet 8y ago
    Yup, been some fun to write. We did it in Cracow Poland, no internet, barely any money, these were times!
TillE 8y ago
ZZT was such an influential game/editor for me. I just wish they woulda stuck with his original "Epic MegaGames" name, much better to have a funny name than one that can be read as a bit too self-important.
archagon 8y ago
I’m rather surprised that whiz kids like Sweeny and Carmack often end up becoming excellent executives as well.
- vocatus_gate 8y ago
  What is Carmack up to these days? Last I heard he was still fiddling with VR stuff and doing rocket hobbyist projects on the side?

sand500 8y ago

Hopefully this shows others that you can make successful games without pay to win mechanics.

tudelo 8y ago
Of course there are games that already have proven this, most notably League of Legends (which is also mentioned in the article).
- jjeaff 8y ago
  I'm thinking candy crush was pre-league of legends. It brought in $1B revenue for 2018, which is the highest ever and still growing.
  - alexland 8y ago
    League of Legends has been around since 2009, versus Candy Crush Saga in 2012.
  - therealdrag0 8y ago
    Wow I had to look this up. Didn't know it was so big still. https://variety.com/2018/gaming/news/candy-crush-saga-1-billion-1202908004/ https://variety.com/2018/gaming/news/candy-crush-saga-1-bill...
- jsnell 8y ago
  Huh? LoL is blatantly P2W, they sell two kinds of in-game advantages.
  - Jarwain 8y ago
    What are those?
    - hackerman12345 8y ago
      Heroes. A good hero selection is p2w because you may not have a reasonable counter to xyz enemy. They used to sell Runes too (I believe an update made this invalid). Of course, you can get all this stuff for free just by playing 100s of hours, if you have the time/will.

usaphp 8y ago

What does HN people think on the whole idea of stealing concept from PUBG? I am kind of divided on this topic.

KaoruAoiShiho 8y ago
The fast follower beating the original by offering a lower price is a well established business trend. Usually works pretty well. I just don't understand why PUBG isn't free yet.
- dabeeeenster 8y ago
  PUBG doesn't have the scope for skins in the same way that Fortnite does. Fortnite's art style lends itself way better to crazy skins. It's also played more by a younger generation who are more likely to buy digital accessories (that's just IMO tho)
  - KaoruAoiShiho 8y ago
    Because it's free, that's why it's played more by kids. Until you remove that huge distinction from the equation it's hard to claim anything else had as much of a factor. IMO if PUBG was free when Fortnite came out Fortnite would not have the marketshare it has today. Things like crazy skins is just a matter of willingness rather than anything intrinsic to the game.
21 8y ago
What about Mario clones? (platformers) Doom clones? (first person shooters) Warcraft clones? (real time strategy) ...
- fredophile 8y ago
  I agree with your point but a funny thing about this list is that I can think of earlier games in the genre for both FPS and RTS off the top of my head. Dune 2 is the earliest RTS that I'm aware of and Wolfenstein is probably the earliest example of an FPS. I'd say this probably strengthens your point rather than weakening it.

Reedx 8y ago

> ...has popularized the battle royale category — think Lord of the Flies meets Hunger Games — almost single-handedly... Almost single-handedly? This is a bizarre claim and it's like rewriting history.

minimaxir 8y ago
This can be debated. Although Rust/H1Z1/PUBG were certainly popular battle royale games before Fortnite, Fortnite was the only one that brought it mainstream, outside the hardcore gamer ecosystem.
- jVinc 8y ago
  Battle royal was already popular enough for Epic to drop everything they had and shift focus to the genere without any doubt that it was the correct thing to do. To give them credit for the popularity of the genre is to rewrite history.
  - thedaemon 8y ago
    This is exactly it! Fortnite was a team based fps/rts before it saw the cash cow that is the Battle Royale.
  - ethbro 8y ago
    Wasn't the iPhone the first smartphone? /s
- earenndil 8y ago
  I disagree. PUBG was _insanely_ popular well before fortnite showed up.
  - justwalt 8y ago
    Right. PUBG is still immensely popular with hundreds of thousands of steam players daily, and I believe it saw player growth in a recent month.
- 8y ago

mbesto 8y ago

> Epic grossed a $3 billion profit for this year What does this even mean? Net income? Top line gross profit (meaning minus COGS), which is normally like 80% GM for heavily software enabled businesses? Ugh, tech reporters.

symisc_devel 8y ago
Pure profit after taxes apparently.
jjeaff 8y ago
Yes, gross profit is usually understood as revenue minus cogs. But it doesn't seem like the reporter is using it correctly here.
- mbesto 8y ago
  I'm about 63%* sure the reporter is referring to revenue. * made up number
  - iiv 8y ago
    Revenue and profit are two entirely different things. If it says profit, I feel like it's more likely it's profit rather than revenue.
    - mbesto 8y ago
      You must be new to TechCrunch articles.
crispyambulance 8y ago
> What does this even mean? Net income? Not sure what exactly it means, but it sounds like A LOT. The number of employees at Epic appears to be ~700. I do hope that the people who did the work are getting paid handsomely. They should be, right?
rchaud 8y ago

cheeseomlit 8y ago

Shame none of that is going towards UT development and Epic scrapped that project. Considering the state of the new Quake game I guess that's the end for Arena shooters.

munchbunny 8y ago
It's too bad, but arena shooters have been dying as a category ever since around UT3. I'm hopeful they'll make a resurgence in the future.
- jplayer01 8y ago
  I thought Quake Champions would be the best chance for the genre to be revived. With how popular LoL and DotA and Overwatch are, it seemed like a mix of the traditional arena shooter with special abilities/spells would be a good way to attract that audience. It hasn't. Maybe because Bethesda's efforts still lean too heavily on traditional Quake and they're unwilling to really embrace the RPG/ability aspect of MOBAs. Unfortunately, so many developers have tried and failed to make a "modern" arena shooter that I don't see anybody else giving it an interesting, worthy take on a hybrid.
  - cheeseomlit 8y ago
    The failure of QC has nothing do with them not embracing the RPG/ability aspect of MOBAs, that was always just a gimmick anyways (when QC introduced gametypes without abilities they ended up being more popular). It has everything to do with Bethesda utterly mismanaging the entire project into the ground. They hired Saber Interactive (probably the cheapest studio they could find) instead of going with more expensive in-house development with iD. The engine is a frankenstein monster of old iDtech with Saber's console-oriented crap piled on top and the result is woeful performance, memory leaks, desync, and laughable netcode all of which has not been addressed in the 2 years it's been in "beta". Add in the cancerous "games as a service" model that does not allow for any custom content, maps, or community servers (which were always the lifeblood of quake) and there you have it

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disishhsha 8y ago

$3B profit doesn’t really seem consistent with $15B valuation. Tech companies these days seem valued at 20x revenue or more. Why would they bother raising $1.25B at that price? I suppose Fortnite is a fad, so there is a pessimistic case to be made to cash in as much as possible.

nikanj 8y ago
”Tech companies” is a wide umbarella. An enterprise-oriented SaaS can justify a high multiplier like that, because their churn rate is low. Video games are a much more volatile business, and the valuation multiplier reflects that.
ethbro 8y ago
The impression I get is that the video game industry is extremely hit / miss. Hence the large graveyard of publishers and developers who at one time made excellent, well-selling games. (E.g. Interplay Games) Money comes cheaply at times of hits. Money comes much more expensively at times of misses. So it behooves Epic to build up a war chest if they can.
- disishhsha 8y ago
  It does speak to a pretty conservative mindset - when you just made $3B cash free and clear, selling some of that golden goose for $1.25B.
Mikeb85 8y ago
Growing tech companies are valued at 20x revenue. Mature companies aren't. Epic was in trouble and managed one hit, that revenue isn't guaranteed to last, hence the conservative valuation.
baby 8y ago
if Fortnite is a fad, is the moba genre a fad as well? Because LoL and Dota2 seem to still be going strong.
rchaud 8y ago
The $3B figure is an estimate. Techcrunch doesn't have the real numbers. That would explain why they don't compare the $3B to Epic's 2017 numbers; because they don't have those either.

aphextron 8y ago

I don't really like Fortnite, but I'm really really happy for Epic's success. PUBG was a flaming dumpster heap that only caught on because the Battle Royale mechanic is naturally fun and people were clamoring for that type of game. But it was an unqualified mess from a subpar developer, and that always annoyed me because gamers deserved better. Now Epic has been rescued from sliding into obscurity and they've got massive coffers to continue working on Unreal 4. Couldn't have worked out better.

moron4hire 8y ago
"Gamers deserve better"? What is that supposed to mean?
- yqh 8y ago
  I understood it as "people who like this genre deserve a game that is not crap"
  - moron4hire 8y ago
    It's difficult for me to imagine a game that 50 million people bought and played for several hours as "crap". It has its warts and there are certainly things I don't like about it, but 50 million people don't accidentally buy Shaq Fu or Big Rigs or whatever is the latest Sonic the Hedgehog game.
- axus 8y ago
  Replace Gamers with "Customers", and better with "a competitive marketplace, instead of a monopoly".
- aphextron 8y ago
  > "Gamers deserve better"? What is that supposed to mean? It means they deserve better than all the garbage that's been pushed out over the last 5 years or so since Unity and Unreal became free, and Steam relaxed its submission standards. There's been a massive wave of terrible "games" that people are just forced to accept because they don't know any better. I'm not hating on indie game devs in general, there are of course plenty of amazing ones. But the real problem is this trend of a small group of devs forming a "studio", coming up with really ambitious plans for a huge game after learning Unity for a month, and then releasing early access garbage like PUBG and abandoning it when they realize making a triple-A game takes years of effort by a vast team of expert professionals.

Cu3PO42 8y ago

I think it is commendable that Epic used some of this profit to change their Unreal Engine Marketplace rates in favour of the developers. Similar to their store that is mentioned in the article, the revenue split is now 88/12. This change will be applied retroactively to all past transactions [1]. My understanding is the split was previously 70/30 as common in other online stores—those should be some hefty payouts for some developers. In my opinion this is going above and beyond and would make me feel good about supporting Epic through purchase of cosmetics in Fortnite if I played the game, for example. EDIT: I previously mistakenly referred to the UE Marketplace as store, which is now at best misleading since they did launch a proper game store last month. Thanks to jsnell for catching this. [1] https://www.unrealengine.com/en-US/blog/epic-announces-unreal-engine-marketplace-88-12-revenue-share https://www.unrealengine.com/en-US/blog/epic-announces-unrea...

ehsankia 8y ago
I'm confused, Epic just launched their store this month. What games are these "previous transactions" for? Do you have a specific list of games that sold with the previous 70/30 cut, and for how long? EDIT: From what I remember, the only games on the Epic launcher were Unreal Tournament, Paragon, Fortnite and Shadow Complex.
- jsnell 8y ago
  The OP was talking about the Unreal Engine Marketplace (for selling game assets to developers), not about the Epic Games store (for selling finished games to players). I see the source of your confusion though, since the article was never talking about the UE Marketplace.
  - Cu3PO42 8y ago
    It appears I didn't parse the article correctly myself. Thanks for catching this, I'll edit the OP to be clear on this.
a13n 8y ago
Eh, that move is definitely nice for developers, but it's still self-serving. They're in an uphill battle against steam's moat, and increasing rates is a way of attracting more developers.

neilsimp1 8y ago

Is anybody else bummed how Fortnite's success has drawn development away from the new Unreal Tournament? I don't care about Fortnite, I just want UT to continue to be updated. I don't think it's had an update since June.

fraXis 8y ago
Not just drawn development away, but they are no longer developing it. https://www.digitaltrends.com/gaming/development-stopped-unreal-tournament/ https://www.digitaltrends.com/gaming/development-stopped-unr...
- mschuster91 8y ago
  Oh no, sad to hear this. Still regularly shoot around with my gf on classic UT2004...
  - ep103 8y ago
    A guy upthread is mentioning quake champions doom edition as an alternative

bufferoverflow 8y ago

I'm surprised it made so much money. The game is free. Do people really pay much for the skins/characters?

Slals 8y ago
Mostly by stealing mom's card.
ihuman 8y ago
You can also buy something called a "battlepass", which gives you access to additional challenges every week. By completing these challenges, you can earn additional cosmetic items.
wyldfire 8y ago
Yeah, it's nuts. My son plays a lot and seems only mildly interested in skins. AFAIK there is no game advantage to any of the things that you can buy.
lapnitnelav 8y ago
Used to do a call center job for the unfamous EA. Back then (and it still probably is), FIFA Ultimate Team was all the rage. What's FUT : a bunch of e-cards of players to get from packages you buy or you trade with players. You can spend 20 bucks but you can also spend hundreds, if not thousands to get your collection.
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stupidbird 8y ago
I remember reading that the average player spends $80 on DLC for Fortnite — so there are a lot of people out there spending well over that to bring up the average from all those $0 players.
atom-morgan 8y ago
"Epic Games banked a $3B profit in 2018"

stupidbird 8y ago

Fortnite makes over a million dollars a day... ON iOS ALONE. They've built a money machine.

shmerl 8y ago

Tim Sweeney often complains about MS being a threat to PC gaming, yet there is still no Fortnite for Linux. Also, Epic store doesn't support Linux (yet?).

ksec 8y ago
I mean come on, it has got to be a business decision. If Gamers were there, they would have made it. How much investment do you expect them to make when only 1% of the world wide Desktop uses linux and possibly less than 10% of that 1% are gamers? I mean Mac Gamers don't complain as much when they have higher market shares.
- shmerl 8y ago
  If he is so threatened, his business decision should be to do something about it. Valve did, and push Linux gaming quit a lot. Epic do it very lazily. Good thing their Unreal engine works on Linux, but they didn't put a lot of effort in it. Lot's was done by third party and community developers to make it work.

rchaud 8y ago

The interesting part of this article was that Epic intentionally circumvented Google Play Store and required Android users to download the launcher from its own website. Hopefully this leads to more app developers skipping Google Play and launching solo. Of course most apps won't have the name recognition of Fortnite, but I can't imagine discover-ability inside of the Play Store is any better. I got a new phone recently and had to re-download some apps; Imagine my shock when I opened Google Play and saw that it had become like Google search; crawling with ads for some of the worst, lowest-rung "apps", all of which appear to be some variant of Candy Crush and Clash of Clans. Who honestly wants to fork over 30% to Google for that?

nikanj 8y ago
The Apple store is just as bad. I tried finding an app that just takes a photo every n seconds until I press stop. I could find endless pages of apps that claimed to do this - but had 1-star ratings because they couldn't actually do the single thing they were supposed to do. Ugh. I remain pretty convinced that there's an app like this out there, but discovering it is just plain impossible.
- mikestew 8y ago
  Hmm, I’ve been looking for an iOS project idea recently... Seems like something one could crank out in a weekend. But I’m with you on discovery. Finding something that isn’t going to disappoint me gets harder with time.
  - nikanj 8y ago
    Please poke me at lwahonen@gmail.com if you ever make one :)
- macintux 8y ago
  I’ve given up on searching the App Store, but I’ve had a lot of luck searching the web. This article looks relevant and useful: https://iphonephotographyschool.com/iphone-time-lapse/ https://iphonephotographyschool.com/iphone-time-lapse/

arminiusreturns 8y ago

Epic lied to Linux devs and stabbed us in the back. I have abandoned hundreds in marketplace assets and moved to godot because of all that money and still a refusal to address Linux as a platform for dev and shipping.

AgentME 8y ago
I see several people complain about Linux limitations in this thread. What are the Linux limitations exactly? A) Unreal dev tools can't be used on Linux, B) Unreal dev tools can't be used to purchase marketplace assets on Linux, C) Unreal dev tools can't use marketplace assets on Linux even if you previously bought them on Windows, D) Unreal dev tools on Windows can't make a Linux build if it uses marketplace assets.
ksec 8y ago
What exactly did they lied? In terms of Dev?

Waterluvian 8y ago

Fortnite's pivot from failed co-op zombie game to... well, this... is incredible. I would love to have experienced that office environment over that year. I can only imagine that the pivot was a "well, we already have most of the game. What can do we do with it?" hail Mary as they considered what to do short of closure. I may also be misremembering how dire their situation was. But I thought it was quite dire.

golergka 8y ago
Fortnite may have been dire as a product, but Epic was surely not in any kind of trouble as a company.
- lotyrin 8y ago
  It's really odd to watch people see them as "the Fortnite company" and ignore/discount the Unreal engine, etc.
  - Waterluvian 8y ago
    It just completely skips my mind that Epic has more going on for them than games. Not that I've really tried to understand their business units or offering.
  - AJ007 8y ago
    I actually see them as the ZZT company.
    - 1123581321 8y ago
      I learned quite a bit from the simple message passing in ZZT-OOP as well as some about timing and inserting new information into logic loops. Most of my programs were closer to what would be done in Twine today, which makes me optimistic about the generation of future programmers that framework is creating.
    - kbenson 8y ago

lanevorockz 8y ago

All gaming companies could have made huge profits. Most game companies opted to be condescending and preach personal politics into peoples hobbies. It's not about fun but it's about education.

techsin101 8y ago
Instead of working on a game for few years and releasing something innovative they want to release new but really 1.2 version every year with 20 dlcs in between. We Map editor - nope Lan gameplay - nope In a way counter strike is better

lupinglade 8y ago

Now finish UT4!

flor1s 8y ago
UT4 got killed by the success of Fortnite :(

thosakwe 8y ago

Unreal Engine is honestly awesome. I recently purchased an AAA game called “DB FighterZ,” built on UE, and the game experience is top-notch. It piqued my interest in game programming once again.

ineedasername 8y ago

I'm really happy they're so successful. My son loves it, and from my perspective it's "healthier" than more realistic games like Call of Duty (for his age, I mean. nothing inherently wrong with CoD). All that said, I really don't get the appeal. Although I come from a gaming history that values deep and lore-heavy CRPG & ARPG games. From that perspective I don't see a lot of depth to fortnite, where success seems driven by twitch reflexes and very similar end-games for most matches. That said I love the temporary special features they do. My son & I had a blast jetting around, sniping each other when rocket packs were available, and The infinity gauntlet tie-in was really fun. Anyway, good on Epic!

yonatron 8y ago

"Valve", not "Value"!!

ksec 8y ago

One of the best thing about Fortnite is EPIC porting back all the work and improvement to Unreal Engine, if any of those Unreal Engine Release note improvement seems crazy, since Fortnite it has been insane. And there are still many more to come. At this stage Makes me wonder if Unreal Engine will ever get a major competitor for AAA games. Even Konami are ditching the Fox engine and moving to Unreal.