Epic Games is a globally successful game development and software company founded in 1991 by Tim Sweeney and currently headquartered in North Carolina in the United States with studios in Tokyo, Shanghai and Korea.
By Barry D. Moore CFTE
The company is of great interest to investors as the manufacturer of the famous and fastest growing online games Fortnite and Hitman. Between December 2017 and 2020, the number of Fortnite players has grown from 30 million to 350 million.
Shareholders
Epic CEO and founder Tom Sweeney is the majority shareholder, owning over 50% of the company. The Chinese corporation Tencent Holdings (TCEHY), the world’s largest video game company, owns about 40% of the shares of Epic Games.
The main investors in Epic are Baillie Gifford, Fidelity, T. Rowe Price, Blackrock, Lightspeed Venture Partners, Ontario Teachers’ Retirement Plan Board, David Tepper, Smash Ventures and KKR.
How to buy Epic Games shares
Epic Games is currently wholly owned by founder Tom Sweeney, Tencent Holdings and venture capital groups. Therefore, if you want to buy shares in Epic Games, you need to buy shares in Tencent Holdings.
Epic Games has shares, but they are privately owned, so you will not be able to buy shares as a retail investor, through a brokerage account, or through the stock exchange. The only way is to invest in companies that own shares in Epic Games.
Epic Games Income Sources
Epic makes money by selling a wide variety of games through its website, including games from other companies such as Star Wars by Electronic Arts, and earning a commission for doing so. There are also free games for users, where the purchase of additional privileges or weapons is paid. Users download games and buy the opportunity to compete in them.
Epic Games, Sony and Danish toy maker LEGO have announced a long-term collaboration to create a safe virtual space for children, reports The Verge. The total amount of the transaction amounted to 2 billion dollars.
Epic Games generated $1.8 billion in Fortnite revenue in 2019, notes SuperDataResearch.
Apple (AAPL) removed Fortnite from the App Store in April 2020, due to Epic Games bypassing the App Store’s 30% commission by adding an in-app payment system; Google Play (GOOG) has also ruled out Fortnite.
Another source of income in Epic games
Unreal Engine is an advanced open source real-time 3D graphics creation tool. With its help, video game designers, creators of films, video clips, commercials create their masterpieces.
Unreal Engine can also be applied in architecture and industrial design, education, science and medicine, website design, applications. This makes Unreal Engine a promising source of income for the company.
An investor who wants to invest in Epic Games needs to purchase Tencent Holdings ADR (OTCMKTS: TCEHY) shares, which are traded on the Hang Seng index under the ticker symbol SEHK 700.
Tencent owns 100% of Riot Games, the creator of the well-known and highly sought-after game League of Legends.
As of October 2021, the active game players in the League of Legends universe reached 180 million people and their number is growing steadily.
The income from the game in 2020 amounted to $ 1.5 billion., League of Legends versions are also very popular: the record was the profit from the mobile game League of Legends: Wild Rift in 2021: over $ 150 million in 370 days.
It is worth noting the multiplayer Honor of Kings, the flagship mobile game of the company, in the fall of 2021 its revenue amounted to more than 10 billion dollars.
International gaming revenue increased by 34% to 2.1 billion. The launch of new content for the online shooter Valorant and mobile Clash Royale contributed .
Tencent has equity investments in many game developers. And Tencent’s earnings signal that investing in such games is profitable both in the short and long term.
In 2021, Tencent generated $27 billion in total gaming revenue, with $20.2 billion of that coming from the domestic market.
However, despite the fact that the share of the international market is only 8%, it was she who showed the most intensive growth – 31% per year.
The total profit of the corporation for 2021 amounted to 87.9 billion – an increase of 16% per year.
It’s worth looking into Tencent Holdings if you’re looking for a company to invest in video games.
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