EPIC Games Made $3 Billion Profit in 2018

Banner Year for EPIC Games

EPIC Games has reached an impressive milestone in 2018 earning $3 billion in profit. The company started all the way back in 1991, but changes to their business model enacted six years ago are finally paying off in big ways. Obviously, the popularity of Fortnite largely anchors the company’s success this year. However, having the right business model to account for growth and changing trends matters as well.

According to CEO Tim Sweeney, their success can be attributed to their “Epic 4.0” strategy. Which is basically the move to a freemium model, rather than relying simply on game sales.

What is EPIC 4.0?

“We realized that the business really needed to change its approach quite significantly.” Sweeney explains via TechCrunch.  “We were seeing some of the best games in the industry being built and operated as live games over time rather than big retail releases.”

He adds that the ideal role for Epic in the industry is to drive that. Which is why they began the transition from being a fairly narrow console developer to what they are now. Which is a multi-platform game developer and self publisher, and indie developer on a larger scale.

Undoubtedly, a $330 million investment in 2012 from Chinese games firm Tencent also helped. For this investment, Tencent gets 40% stake on the business. This partnership also allows EPIC Games to expand much further on other platforms. Abandoning mostly Xbox exclusive titles and branching out into iOS and Android gaming as well. Fortnite earnings on the iOS platform alone account for more than $385 million, earning $1.23 million per day.

Which is why the new $3B profit estimate is much easier to believe and shatters the initial $2B profit expectations of analysts last year.

What is Next for EPIC Games?

Although Fortnite is successful, EPIC is not resting just yet. They are evolving their business further and have begun by competing against Steam with their own EPIC Games Store this month.

They are even enticing more companies to move to their publishing platform through larger commissions. With the company’s global reach now, they are also the most likely to succeed in dethroning Valve‘s PC gaming dominance with Steam.