Given Epic Games’ success, many investors want to get in on the action. But does it have shares available to the public? Tune in to find out if you can buy Epic Games stock.
Can You Buy Epic Games Stock?
Unfortunately, you cannot buy Epic Games stock at this time. It’s a private company, and this doesn’t look to be changing anytime soon.
The good news is that there are ways that you can indirectly invest your money in the company’s success.
While it’s not the same as owning its stock outright, this is the next best thing.
We’re going to cover how to invest in Epic Games and some competitor stocks that you will want to watch out for. So keep reading for the full breakdown.
But first… a bit of background on this video game titan.
Company History
Epic Games was founded by Tim Sweeney in 1991. He’s still the current CEO today.
The company’s headquarters are in Cary, North Carolina.
Branching out from personal computer gaming, it dived into the console market by the mid-2000s.
The versatility of its game engine helped create a catalog of successful internally developed video games.
By extending its offerings and partnerships to consoles, the company created new relationships with staples in the gaming industry, such as Microsoft, and Electronic Arts (EA).
Eventually, the market had begun shifting toward a games as a service (GaaS) model.
In 2012, Tencent Holdings purchased a 40% equity stake in Epic Games. At this time, the market had begun to shift to a games as a service (GaaS) model.
Epic had League of Legends in its arsenal of games, which is a very successful example of the GaaS model.
Working with Tencent also allowed the company to develop Unreal Engine 4.
This version was offered free to developers, as any games created using the engine would then pay royalties. It proved to be a very lucrative business model.
The Unreal Engine
An absolute monument to the gaming industry in itself, the Unreal Engine created the foundation for massive games to be built.
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 the company’s market share.
The genius part of this was its approach to licensing the Unreal Engine.
When a finalized game using the software is published, the publisher must pay 5% royalties for each copy sold. This is a great secondary stream of revenue and funds the continued optimization of the engine.
The company took it one step further, however.
Fortnite: Battle Royale and the Epic Games Store
In 2017, Epic Games released Fortnite Battle Royale amidst the rise in popularity of battle royales.
By 2018, Fortnite had dominated the free-to-play video game market and brought massive success to the company.
It also became a massive hit with gamers and the esports community.
Following the financial success of Fortnite, the company was able to diversify its services even further with the launch of the Epic Games Store.
With the creation of the Epic Games Store and launcher, the company made a move to bring more people to its own platform.
Developers were encouraged to use its Unreal Engine software to create games and then publish them using the store platform.
Who Owns the Company?
Tim Sweeney, the founder and CEO of Epic Games, is the majority shareholder at this time. He owns more than 50% of the company.
Sweeney has held this majority ownership since its founding. The most likely reason it’s not a publicly traded company is that Sweeney would not maintain control if he launched an IPO.
While Tim Sweeney owns the majority of the shares, Tencent purchased a 40% equity stake.
Other investors and venture capital firms that own a share in the company include:
- Lightspeed Venture Partners
- Smash Ventures
- Kohlberg Kravis Roberts & Company
- Blackrock
These are just some of the investors providing private funding. There are many more who have made sizable investments in Epic.
In fact, the company has had 11 funding rounds, which have amounted to a staggering $6.4 billion.
How Much Is the Company Worth?
As of April 2022, Epic Games’ valuation is 31.5 billion. Last year, it was valued at about $27.8 billion. This is a 13% increase.
The company raised $2 billion from Sony and the Lego group.
The two billion figure is double the capital raised in 2021. It was announced that Sony put up $1 billion to bolster Epic Games’ metaverse endeavors, as both are partnering to bring this tech to life.
While the jump from a $27.8 billion to a $31.5 billion valuation is impressive, it’s important to note the company doubled its valuation from 2019 to 2020.
So numbers are trending up, but it’s not experiencing the same explosive growth as it did two years ago.
Revenue
According to Statista, Epic Games’ revenue for 2021 was in the ballpark of $5.7 billion. This is an impressive figure, but it’s not surprising given the company’s hold over the market.
From its online store, Unreal Engine, merchandise, and game development and licensing, it has plenty of revenue coming in.
This company has been making smart moves from day one, and the numbers back this up. We don’t have the figure from Fortnite’s revenue, but it’s probably massive.
How to Buy Epic Games Stock
Currently, the only way to invest in Epic Games stock is by buying shares in a company that owns a stake in the developer.
For instance, you can buy stock in the Chinese company Tencent Holdings.
It’s not one-to-one, but it is as close as we can get for the foreseeable future.
So if you are okay with indirectly investing, this might be a fair compromise.
Tencent also owns Riot Games — a serious competitor to Epic Games. So that’s another plus.
Some other developers under the Tencent umbrella include Funcom, Sumo, Turtle Rock, Digital Extremes, and others.
There is another option that could let you invest in the future (without waiting for an IPO).
Some platforms provide a secondary market for private companies, where investors can buy in before these shares are listed on a stock exchange.
A few notable options are:
- Linqto
- Forge Global
- tZERO.
- Compound
Many private companies use these platforms as a way to raise capital without listing their shares on the stock market.
Currently, Epic Games is not listed on any of these secondary markets.
And it doesn’t appear to need to run a funding round through these platforms.
But you may want to keep an eye out if you’re set on owning its shares.
Will There Be an IPO Date?
Epic Games does not have an initial public offering (IPO) in the pipeline.
The company is doing well as a private entity, so there are few benefits to moving its stock onto the public markets.
If there is an IPO date in the future, it could be exciting news for investors. However, the likelihood of an IPO happening for this game developer is slim.
There are a few ways that you could find out about an IPO:
- The company makes an IPO announcement
- An internal leak points to an IPO
- The company files an S-1 filing
Usually, companies make their intentions clear before filing, but sometimes it comes out of left field, like Reddit’s IPO.
Stock Symbol
Epic Games does not have a stock symbol, as it’s not publicly traded, and it hasn’t filed with the Securities and Exchange Commission for an IPO.
So for now, all we can do is speculate.
Some examples of a potential ticker symbol are:
- EPIC
- EPCG
Also, there is a publicly traded stock often confused for Epic Games, Epic Corp (EPOR), but this is for an entirely different company.
You will not be investing in the world-renowned video game company by buying these shares.
Stock Price
Epic Games’ stock price will remain unknown until it is publicly traded.
That said, if you want to invest in one of its largest stakeholders, Tencent, you can buy in at ~$44 a share.
We can also guesstimate what the price of shares could be from looking at its competitors.
If you average out the price of the competitor stock on our list, you get ~$79 a share.
There are several factors that play a role in the price of a stock, so this isn’t a firm number or forecast by any means.
It’s food for thought if you’re wondering what the stock could be worth, though.
Competitors You Can Invest In
While you cannot invest in Epic at the moment, there are many competitors trading on the stock market.
These options could be a good fit for a retail investor that cannot access private deals.
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 it has created.
A significant competitor on the battle royale front, Activision Blizzard is the video game company behind video game franchises, like Call of Duty, Overwatch, and World of Warcraft, 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.
Though membership has fallen, it remains a heavily played game across the world.
Activision Blizzard, Inc. has a company value estimated at roughly $72 billion. The jump in worth is likely due to the Covid-19 pandemic prompting people to spend more time inside.
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 could be an excellent alternative, since it fills a niche that other competitors don’t.
EA Games (NASDAQ: EA)
EA is yet another competitor involved in the battle royale genre.
It 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 its 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, its game Need for Speed actually had a movie made based on the series.
In another effort to compete, EA branched out with a subscription-based service called EA Play, which allowed subscribers to play any game from the EA library for a monthly fee.
Should You Wait for an IPO?
If you want to invest in the video game industry, waiting on an Epic Games IPO might not be ideal.
There are plenty of alternatives to choose from, including Activision Blizzard, Roblox, and EA.
These are only a few of the heavy hitters innovating video game technology.
Plus, as publicly traded gaming companies, the amount of data available makes conducting analysis much simpler.
There are years of data on these alternatives to comb through, including earnings reports, stock charts, and forecasts.
Still, Epic could be a solid investment once it is publicly traded. Its valuations are on an upward trend, and it’s innovating almost every facet of the video game industry.
Between its products, store, licensing fees, and IPs, the company is doing well for itself.
You can already get a piece of the pie by buying Tencent stocks, which are available on the over-the-counter market.
Final Thoughts
All indications point to Epic Games remaining privately held. Tim Sweeney and Tencent Holdings appear very content with this arrangement.
Also, the company, operating entirely privately, has proven time and time again that it’s more than capable of raising the necessary funds to maintain growth. So don’t expect to see an Epic Games stock IPO anytime soon.
This is a shame because few video game stocks have comparable potential.
Unlike other game developers, the company offers a variety of services, not just games. Plus, it launched Fortnite, one of the most successful battle royales to ever hit the market.
In the case it does go public, buying stock could prove quite profitable if the company can continue its upward momentum.
FAQ
What Is an IPO in the Stock Market?
An initial public offering, or IPO, is when a company publicly lists shares on the stock exchange. Companies who opt for an IPO use it as a vehicle for growth. Cautious investors might want to wait until after an IPO to buy shares to see how the market reacts to the stock.
What Company Owns 40% of Epic Games?
Tencent Holding currently owns a whopping 40% stake in Epic Games. It purchased this large stake in the company for $300 million way back in 2012. Given the developer’s recent valuation of $30, Tencent must be thrilled right now.
What Is the Stock Symbol for Fortnite?
Fortnite does not have a stock symbol, and neither does its parent company Epic Games. We will never see a Fortnite ticker unless it became its own company. This has a near-zero chance of happening, as it’s one of the company’s top moneymakers. There’s no Unreal Engine stock, either.
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