Online gaming has taken the world by storm over the last twenty years. While video games have been a staple in the American household for much longer than that, the internet took it to the next level.
It’s a great way to keep in touch with friends who do not live close, and a great way to spend time relaxing. Within the last few years, the battle royale style of game has begun to dominate the top spots in the market. They’re free games to download, but they include extra content that’s able to be purchased via in-game microtransactions.
Who is leading this trend? Epic Games.
So, can you buy Epic Games stock? Read on to find out.
Epic Games Stock Intro – A Brief History of Epic Games
Epic Games was founded in 1991 under another name, Potomac Computer Systems, before becoming Epic MegaGames, Inc., and finally its current name in 1999. Epic Games saw massive success in the video game world on PC with their shooter game Unreal.
This opened up massive opportunities for Epic Games. It allowed them to continue to grow and develop their signature Unreal Engine, the computer program that made their games run so well.
The Unreal franchise continued, and with each release a new version of the engine software was included. This showcased the company’s strength in the games market.
Branching out from personal computer gaming, Epic Games started working in the console market by the mid-2000s. They developed their Unreal Engine to work with console-based games.
Using the Unreal Engine 3, Epic Games released Gears of War on the Xbox 360, which was another commercial success for the company. The success of the series allowed for even better optimization of the Unreal Engine, which in turn brought more interest to the company in the industry. By branching out to consoles, Epic Games created new relationships with staples in the gaming industry, such as Microsoft.
Years later in the early 2010s, the company was purchased by Tencent Holdings. At this point in time, the market had begun to shift to the ‘games as a service’ (GaaS) model.
At the time, Tencent Holdings had proved its ability to work under this new model. They had League of Legends in their arsenal of games, which is a very successful example of the GaaS model.
Working with Tencent also allowed the company to develop the Unreal Engine 4. This version was offered free to developers as any games created using the engine would then pay royalties to Epic Games. This was a very successful business model.
In 2017, Epic Games released Fortnite Battle Royale amidst the rise in popularity of another very popular battle royale game. By 2018, Fortnite had dominated the free-to-play video game market and brought massive success to Epic Games yet again. This sweeping of the market brought all eyes to focus on Epic Games.
Fornite became a huge hit with the esports community.
New ground was broken by the company, particularly due to the success of Fortnite, by having Sony allow and cooperate with cross-platform play. This allows players of the game to play on Xbox consoles. This was a monumental moment for the company.
Following the financial success of Fortnite, Epic Games was able to diversify their services even further with the launch of the Epic Games Store. With this online-based application, the company sought to compete with services such as Steam by massively reducing the standard cut of revenue from 30% to 12%.
Since the release of the Epic Games Store, the company has also launched another publishing division focused solely on multi-platform releases as well as Epic Online Services, which is a free software development kit. Epic Games, in its relatively short time in the industry compared to other companies, has become a superstar.
Can You Buy Epic Games Stock: Fortnite: Battle Royale
The impact of Fortnite: Battle Royale is palpable in all areas of the gaming industry. Popularized by online streaming personalities, Fortnite changed the way that games were played. It was not the first battle royale game, but arguably the most popular to watch.
It allowed Epic Games to put their mark on the map for players of all ages rather than just older people who were playing more mature games.
Epic Games knew the impact they had made on the market, and they ran with it. Other companies soon followed their lead. This popularity led to celebrity status for the most popular Fortnite streamers. It also launched an entire toy campaign with action figures and partnerships with companies like Nerf.
Can You Buy Epic Games Stock: Unreal Engine
An absolute monument to the gaming industry in itself, the Unreal Engine has allowed for massive games to be built since the first version of it was made in the late ’90s. Seeing the capability of the engine and the opportunities it has fostered has increased Epic Games’ market share. By allowing developers the use of the Unreal Engine at no cost, Epic Games has encouraged diversity in the industry and allowed small-time developers the ability to create the games that they wanted to see.
The genius part of this was the approach Epic Games took to licensing the Unreal Engine. When a finalized game using the software was published, the publisher would have to pay 5% royalties to Epic Games for each copy sold.
The company found a way to generate income from games that they weren’t responsible for creating. This has allowed for the continued optimization of the engine itself.
Then, Epic Games took it a step farther. With the creation of the Epic Games Store and launcher, they made a move to bring more people to their own platform. Developers were encouraged to use their Unreal Engine software to create their games and then publish them using the Epic Games Store platform, and in exchange, they would not have to pay the royalties associated with using the engine for their game development.
This small but genius tactic created exclusivity on the Epic Games Store and caused more customers to have to use their platform.
Can You Buy Epic Games Stock?
Currently, the only way to invest in Epic Games is to invest in companies that own their stock. For example, you are able to buy stock in Tencent Holdings, which has a large share of Epic Games stock due to their support of the company since 2012.
If there is an Epic Games IPO in the future, it will likely be big news. However, the likelihood of an IPO happening soon is slim.
Epic Games Stock: Who Owns Epic Games?
Tim Sweeney, the founder and CEO of Epic Games, is the company’s majority shareholder at this time. He owns more than 50% of the company.
Tencent Holdings holds approximately 40% of the company and has held as much as 48% at any given time since their investment initial investment in Epic Games in 2012.
Sweeney has held this majority ownership since the founding of the company. This is most likely the reason that there has not been an Epic Games IPO, as Sweeney would then lose majority control over the company that he founded.
Epic Games Stock Price?
Because there has yet to be an Epic Games IPO, there is not currently a stock price for the video game giant available. There have been rumors of an Epic Games IPO, but this remains unsubstantiated with the company currently remaining unavailable to the public for trading.
Epic Games Stock: How Much is Epic Games Worth?
In a news article posted by Epic Games on their website on April 13, 2021, they announced that after a round of funding which led to $1 billion being raised, their value sits at $27.8 billion. The funding, per the announcement, will be used to further the vision and growth of the company.
Who is a key investor in the funding? Sony, who plans to work with Epic Games and collaborate on future projects with the company.
Epic Games Competitors You Can Invest In
Until Epic Games goes public, there are a handful of their competitors that are publicly traded that can be invested in. These companies are good benchmarks for what we could see should there be an Epic Games IPO in the near future.
Epic Games Stock Alternatives: Activision Blizzard, Inc. (NASDAQ: ATVI)
Even if you’ve never heard of Activision Blizzard, Inc. before reading this article, chances are you’ve at least heard of the video games that they’ve created, if not played them. A major competitor of Epic Games on the battle royale front, Activision Blizzard is the video game company behind titles like Call of Duty: Warzone, Overwatch, and World of Warcraft, which are all major players in the online gaming industry.
Notably, World of Warcraft has had one of the largest online player bases of all time. This game follows a monthly subscription model on top of the initial purchase price for the game. Though membership has fallen, it remains a heavily played game across the world.
They’ve had successful games since the merger that created them in 2008. Activision Blizzard, Inc. has a company value estimated at roughly $72 billion. The jump in worth is likely due to the pandemic forcing people to spend more time inside and is likely something that can be seen across the board when it comes to companies who make games.
This is a good indicator as to what the Epic Games stock could look like if the company goes public.
Epic Games Stock Alternatives: Roblox Corp (NYSE: RBLX)
When you think of Roblox, you probably think about the characters that look like they’re made of, well, blocks. In the last year, Roblox has gained a lot of momentum even though the company has been around since 2004.
The unique part about Roblox is that it has been incorrectly labeled as a game, but it is far more than that. In fact, it isn’t a game at all! It’s a platform that allows its users to create video games that are playable by other users. Due to its unique nature, Roblox stock is an excellent alternative to Epic Games stock, since it fills a niche that other competitors don’t.
Roblox has seen a massive jump in stock price since going public on March 10, 2021. On the first day the stock was available, the shares started at $45 and by the end of the day had settled at $69.50. In 2021, the company is valued at roughly $45 billion after going public, which was nearly ten times its worth in 2020.
Epic Games Stock Alternatives: Electronic Arts Inc. (NASDAQ: EA)
EA is yet another Epic Games competitor involved in the battle royale genre. Following Epic Games’ lead, EA released its own battle royale game in 2019 called Apex Legends. The game follows the same in-game purchase model that Fortnite does, even though the game is free to play.
Apart from Apex Legends, EA has been a long-time publisher of the incredibly popular game series The Sims. As well, their game Need for Speed actually had a movie made based on the series. In another effort to compete with Epic Games, EA branched out with a subscription-based service called EA Play allowing subscribers to play any game from the EA library for a monthly fee.
Electronic Arts is worth roughly $24 billion currently. The price per share company’s stock over the last year has had a positive trend. With a plethora of series under their belt, and the most highly rated battle royale game on the market, it isn’t surprising that EA’s future looks promising in a financial sense.
If you want to learn more about investing in EA stock, read our article about the Best Video Game Stocks to Buy Right Now!
Epic Games Stock: Final Thoughts
Currently Epic Games stock is not available, and due to Tim Sweeney, not to mention a massive backing by Tencent Holdings and other companies, it is possible that the company may not be publicly traded any time soon. Epic Games, operating entirely privately, has proven time and time again that they are more than capable of raising the necessary funds to maintain growth over time.
The company offers a variety of services, not just games, but the software to develop games for free only asking for royalties if the developed games turn a profit. Should it go public, Epic Games stock seems to be one to look out for.
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