Epic Games, the maker of top-selling videogame Fortnite, has raised $1.25 billion in new funding from investors including KKR, Iconiq Capital and Smash Ventures.
Disney and Endeavor are among those with small stakes in Epic. Chinese conglomerate Tencent owns 40% of the company, which was valued by Bloomberg over the summer at between $5 billion and $8 billion.
Fortnite has been a breakthrough for the gaming sector, drawing tens of millions of players through a subscription model, rather than one-time sales of game units. Activision and Electronic Arts are reportedly working on rivals to the last-player-standing Fortnite, whose popular “Battle Royale” series drops dozens of players on an island, where they have to fight to survive.
Another dimension to Fortnite that has turned heads in the tech and media sectors is the social element. While many tech companies have promoted social tools for years, Fortnite has proven to be a potent gathering place, keeping games in its environment for hours at a time, offering Epic extensive revenue-generating opportunities.
Sales from Fortnite are expected to reach $2 billion by the end of 2018.
Tim Sweeney, who created Epic in 1991 at the age of 21 and remains its majority shareholder, early on brought out a game developer platform called Unreal Engine, which has grown along with Fortnite. Epic’s indie ethos has enabled it to make bold decisions like the one it announced in August. It announced that the Android version of Fortnite would bypass the Google Play store, instead becoming available only through the company’s own website. That highly unusual move drew some criticism from industry figures who believe it could leave users vulnerable to malware.
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