Unreal and personal computer games (1999–2006)
Epic MegaGames moved to Cary, North Carolina, in February 1999 and became Epic Games. Rein said, “Unreal was produced by devs spread over the world. When the team got together to finish the game, the magic began.” Epic’s relocation to North Carolina centralizes its developers. Sweeney said they omitted “Mega” because they no longer wanted to pretend to be a giant firm, as was the initial aim when it was a one-man team. Unreal Tournament was released the same year with 13 personnel.
In 2004, the business created the Make Something Unreal competition to reward Unreal mod creators. In 2004, Tripwire Interactive earned $80,000 in cash and computer gear.
Gears of War and console games (2006–2012)
The PC video game market struggled with software piracy in 2006, making it harder to produce single-player games, which had been Epic’s economic model. Sweeney labelled the company’s migration to consoles “Epic 3.0” Epic’s Xbox 360 shooter Gears of War grossed $100 million on a $12 million budget. The business produced Unreal Tournament 3 for PC and bought People Can Fly a year later.
Epic Games’ Gears of War 2 sold 3 million units in its first month.
Epic Games launched Epic Citadel on September 1, 2010, to demonstrate Unreal Engine 3 on Apple iOS, Adobe Flash Player Stage3D, and HTML5 WebGL. The Android version launched on January 29, 2013. Epic Games launched Infinity Blade for iOS on December 9, 2010. Gears of War 3 debuted in 2011.
Epic disbanded Titan Studios in 2011. Epic Games unveiled Fortnite during the 2011 Spike VGAs.
Epic Baltimore, comprised of 38 Studios’ Big Huge Games, opened in June 2012. Epic Baltimore is now Impossible Studios. In February 2013, the studio closed.
Epic Games Poland began working on Fortnite with Epic in November 2013 after acquiring People Can Fly in August 2012. Epic and People Can Fly produced Gears of War: Judgement in 2013 as a prequel. Epic pondered making a fourth Gears of War game but believed it would cost $100 million. Microsoft rejected the notion of a multiplayer-only edition of Gears of War with better maps based on user feedback. Epic understood the problems of being tied to a publisher’s financial goals and refocused.
Games as a courtesy and Tencent shareholding (2012–2018)
Epic Games saw that the video game business changed to a games-as-a-service model (GaaS). Sweeney said, “The old model wasn’t functioning, and the new model was looking better.” To get additional GaaS expertise, they partnered with Chinese Tencent, which has multiple GaaS games (including Riot Games’ League of Legends). Tencent purchased 48.4% of Epic’s issued share capital, or 40% of total Epic, for $330 million in June 2012 in exchange for its services. Therefore, Tencent Holdings can designate Epic Games board members and be an affiliate. Sweeney said Tencent has little control over Epic Games’ creativity. Sweeney regarded Tencent’s partial acquisition as the start of “Epic 4.0,” allowing the firm to be more adaptable in the video game market.
Epic had 200 employees then. After the Tencent transaction was revealed, several high-profile employees quit the firm. Exits included:
- Cliff Bleszinski left Epic Games in October 2012 after 20 years. “I need a break,” he said. Bleszinski said he was “jaded” about the gaming business before Tencent’s entry. Bleszinski tried to renegotiate his contract after Tencent’s investment but failed, prompting him to consider retirement. He stopped coming to work and spent his time at his beach house, starting Sweeney to have a heart-to-heart with Bleszinski about Epic’s new path and beg for his commitment. The next day, Bleszinski resigned. Bleszinski founded Boss Key Productions in 2014.
- President Mike Capps announced his resignation in December 2013, citing the birth of his kid and ambitions to be a stay-at-home dad. In March 2013, he left the corporation and his advising role.
- Rod Fergusson, lead Gears of War developer, departed Epic in August 2012. Fergusson saw where the Tencent acquisition would have led the firm and was not interested in free-to-play games. He wanted to continue building a “AAA, big-narrative, big-story, big-impact game.” Fergusson helped 2K Games’ Irrational Games finish BioShock Infinite. Fergusson discussed extending Gears of War with 2K, Epic, and Microsoft. Microsoft bought Gears of War on January 27, 2014, and assigned them to Microsoft Game Studios. Fergusson went to Black Tusk Studios, owned by Microsoft Game Studios, to supervise production for a new Gears release, with the studio renamed The Coalition. Gears of War 4 was the original game after the purchase.
- Adrian Chmielarz, founder of People Can Fly, left Epic following Tencent’s acquisition because he and other former People Can Fly members didn’t like the free-to-play games as a service strategy. They left Epic to establish The Astronauts in late 2012.
- Lee Perry, head designer on Unreal and Gears of War, believed Epic had become too enormous to be quirky. Perry thought their creative freedom would be hampered by the necessity for additional administration to support games as a service. He and five other Epic veterans formed Bitmonster.
After these departures, Epic kept delivering games as a service. Fortnite intended to be a testbed for live games, but team changes and switching from Unreal Engine 3 to 4 delayed its debut. Epic introduced the free-to-play and community-developed Unreal Tournament in 2014 and Paragon in 2016 for Windows and PS4. Epic also published a remastered version of Shadow Complex and Robo Recall on the Oculus Rift in 2015.
Tencent’s funding allowed Epic Games to relicense Unreal Engine 4 in March 2015 to be accessible for all users, with Epic collecting 5% of game revenues.
Epic Games Poland left the firm and reverted to its original moniker, People Can Fly, in June 2015. People Can Fly maintained the Bulletstorm IP and Gearbox Software released a remastered version on April 7, 2017.
Fortnite success (2018–present)
Fortnite became public in July 2017, and Epic released the game in paid early access, with a free-to-play version coming in 2018. Following PlayerUnknown’s Battlegrounds, Epic published Fortnite Battle Royale in September 2017 as a free-to-play title for PC, console, and mobile platforms. Fortnite Battle Royale quickly established a following, with over 125 million players by May 2018 and over $1 billion in microtransactions by July 2018. Epic Games, valued at $825 million when Tencent acquired it, was worth $4.5 billion in July 2018 owing to Fortnite Battle Royale and likely to eclipse $8.5 billion by 2018. Epic broke new territory by convincing Sony to enable cross-platform play in Fortnite Battle Royale, increasing player numbers. In March 2019, Fortnite had 250 million gamers.
Epic changed other products due to Fortnite’s success. In July 2018, it dropped its revenue split for Unreal Engine Marketplace assets from 30% to 12%. Epic established the Epic Titles Store to compete with Steam and GOG.com, taking a 13% cut of income compared to the industry standard of 30% and eliminating the 5% cut for Unreal engine games sold via the storefront. Paragon and Unreal Tournament were discontinued to focus on Unreal and Fortnite.
Fortnite’s success boosted Epic Games’ funding. Epic Games was one of 11 firms selected for the 2017 Disney Accelerator program, including equity investment, access to Disney officials, and possible future collaboration with Disney. Disney chose Epic and aXiomatic as esports leaders.
Epics’ wealth went toward product development. In January 2019, following a disagreement between Improbable and Unity Technologies over modifications to the Unity game engine, Epic said it was teaming with Improbable to offer a $25 million fund to help developers harmed by these changes find more open compatible alternatives. Epic created a $100 million prize fund in February 2019 for Fortnite-related esports. Epic Games hired Overwatch League commissioner Nate Nanzer from Blizzard Entertainment in May 2019. Epic launched a $100 million MegaGrants program at the 2019 Game Developers Conference, allowing anybody to apply for up to $500,000 to assist Unreal Engine game development or any project that benefits the engine. Blender Foundation got $1.2 million from MegaGrants in July 2019 to develop and professionalize its 3D creative production tools.
Epic Games won the BAFTAS Special Award in June 2019 for their Unreal Engine, which simultaneously won the Hollywood Professional Association’s Engineering Excellence Award.
Epic Games Publishing launched in March 2020. Alongside this, Epic announced three deals with developers Remedy Entertainment, Playdead and GenDesign in which Epic would fully fund the development and publishing (including employee salaries, quality assurance, localization, and marketing) of one or more games from each studio, leaving complete creative control and IP rights to the studio, and sharing profits 50/50 with the studio. Spry Fox and Eyes Out were added in October 2021.
Unreal Engine 5 was revealed in mid-May 2020 for early 2022. Epic also published Epic Online Services, a free SDK for online matchmaking and other Fortnite-based cross-platform play capabilities. Epic eliminated all Unreal licensing costs retrospectively for games with up to $1 million in sales commencing January 1, 2020.
Bloomberg stated that Epic was targeting a $17 billion value in June 2020 after raising $750 million from old investors and newcomers, T. Rowe Price Group Inc. and Baillie Gifford. The business teamed with Christopher Nolan and Warner Bros. to secure Inception, Batman Begins, and The Prestige distribution rights. The user’s country determined live film streams.
Epic raised $1.78 billion in July and August, boosting its post-money worth to $17.3 billion. Sony invested $250 million, or 1.4% of the firm. The partnership extends the two businesses’ technical relationship after developing Unreal Engine 5, but it doesn’t bind Epic to the PlayStation platform. Sony began negotiating with Epic about investing after the May 2020 Unreal Engine 5 showcase.
Epic bought Cary Towne Center in North Carolina in January 2021 to be its new headquarters and campus. The conversion will be complete by 2024.
In 2021, Epic revealed MetaHuman Creator. Based on 3Lateral, Cubic Motion, and Quixel technologies, MetaHuman Creator is a browser-based program that allows game creators to generate realistic human figures quickly from presets. The characters may then be exported as pre-made models and animation files for Unreal Engine.
Epic partnered with Cesium in March 2021 to incorporate Cesium’s 3D geographic data into Unreal Engine.
In April 2021, Epic raised $1 billion to support its “long-term ambition for the metaverse,” valuing the firm at $28.7 billion. Sony invested $200 million in the round, and Sweeney retains ownership after these investments.
The Information claims Epic Games would start a scripted entertainment subsidiary in October 2021, with ambitions for a Fortnite film.
Epic Games started in February 2022, when 500 million accounts had been established.
Epic published RealityScan, a smartphone app using Capturing Reality and Quixel, in April 2022. RealityScan creates 3D models from images that can be loaded into Sketchfab.
Sony and Kirkbi, The Lego Group’s parent company, each gave Epic $1 billion in April 2022 to develop its metaverse. Kirkbi gained 3% ownership while Sony gained 4.9%. Epic was worth $32 billion after these investments. Epic and Lego revealed a child-friendly metaverse space that month.
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