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Epic Games, the creator of Fortnite, banked a $3 billion profit in 2018 – TechCrunch

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Epic Games had as good a year in 2018 as any company in tech. Fortnite became the world’s most popular game, growing the company’s valuation to $15 billion, but it has helped the company pile up cash, too. Epic grossed a $3 billion profit for this year fueled by the continued success of Fortnite, a source with knowledge of the business told TechCrunch.

Epic did not respond to a request for comment.

Fortnite, which is free to play but makes money selling digital items, has popularized the battle royale category — think Lord of the Flies meets Hunger Games — almost single-handedly, and it has been the standout title for the U.S.-based game publisher.

Founded way back in 1991, Epic hasn’t given revenue figures for its smash hit — which has 125 million players — but this new profit milestone, combined with other pieces of data, gives an idea of the success the company is seeing as a result of a prescient change in strategy made six years ago.

This past September, Epic commanded a valuation of nearly $15 billion, according to The Wall Street Journal, as marquee investors like KKR, Kleiner Perkins and Lightspeed piled on in a $1.25 billion round to grab a slice of the red-hot development firm. However, the investment cards haven’t always been stacked in Epic’s favor.

China’s Tencent, the maker of blockbuster chat app WeChat and a prolific games firm in its own right, became the first outside investor in Epic’s business back in 2012 when it injected $330 million in exchange for a 40 percent stake in the business.

Back then, Epic was best known for Unreal Engine, the third-party development platform that it still operates today, and top-selling titles like Gears of War.

Why would a proven company give up such a huge slice of its business? Executives believed that Epic, as it was, was living on borrowed time. They sensed a change in the way games were headed based on diminishing returns and growing budgets for console games, the increase of “live” games like League of Legends and the emerging role of smartphones.

Speaking to Polygon about the Tencent deal, Epic CEO Tim Sweeney explained that the investment money from Tencent allowed the company to go down the route of freemium games rather than big box titles. That’s a strategy Sweeney called “Epic 4.0.”

“We realized that the business really needed to change its approach quite significantly. 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. We recognized that the ideal role for Epic in the industry is to drive that, and so we began the transition of being a fairly narrow console developer focused on Xbox to being a multi-platform game developer and self publisher, and indie on a larger scale,” he explained.

Tencent, Sweeney added, has provided “an enormous amount of useful advice,” while the capital enabled Epic to “make this huge leap without the immediate fear of money.”

LOS ANGELES, CA – JUNE 12: Gamers ‘Ninja’ (L) and ‘Marshmello’ compete in the Epic Games Fortnite E3 Tournament at the Banc of California Stadium on June 12, 2018 in Los Angeles, California. (Photo by Christian Petersen/Getty Images)

Epic never had a problem making money — Sweeney told Polygon the first Gear of Wars release grossed $100 million on a $12 million development budget. But with Fortnite, the company has redefined modern gaming, both by making true cross-platform experiences possible and by pulling in vast amounts of money.

As a private company, Epic keeps its financials closely guarded. But digging beyond the $3 billion figure — which, to be clear, is annual profit not revenue — there are clues as to just how big a money-spinner Fortnite is. Certainly, there’s room to wonder whether analyst predictions this summer that Fortnite would gross $2 billion this year were too conservative.

The most recent data comes from November when Sensor Tower estimates that iOS users alone were spending $1.23 million per day. That helped the game bank $37 million in the month and take its total earnings within Apple’s iOS platform to more than $385 million.

But, as mentioned, Fortnite is a cross-platform title that supports PlayStation, Xbox, Switch, PC, Mac, Android and iOS. Aggregating revenue across those platforms isn’t easy, and the only real estimate comes from earlier this year when Super Data Research concluded that the game made $318 million in May across all platforms.

That is, of course, when Fortnite was fresh on iOS, non-existent on Android and with fewer overall players.

We can deduce from Sensor Tower’s November estimate that iOS pulled in $385 million over eight months — between April and November — which is around $48 million per month on average. Android is harder to calculate since Epic skipped Google’s Play Store by distributing its own launcher. While it quickly picked up 15 million Android users within the first month, tracking that spending off-platform is a huge challenge. Some estimates predicted that Google would miss out on around $50 million in lost earnings this year because in-app purchases on Android would not cross its services.

There are a few factors to add further uncertainty.

Fortnite spending tends to spike around the release of new seasons — updated versions of the game — since users are encouraged to buy specific packages at the start. The latest, Season 7, dropped early this month with a range of tweaks for the Christmas period. Given the increased velocity at which Fortnite is picking up players and the appeal of the festive period, this could have been its biggest revenue generator to date, but there’s not yet any indicator of how it performed.

More broadly, Fortnite has undoubtedly lost out on revenue in China, which froze new game licenses nine months ago, thereby preventing any publishers from monetizing new titles over that period.

Tencent, which publishes Fortnite in China, did release the game in the country but it hasn’t been able to draw revenue from it yet. The Chinese government announced last week that it is close to approving its first batch of new titles, but it isn’t clear which games are included and when the process will be done.

Already, the effects have been felt.

Games are forecast to generate nearly $40 billion in revenue in China this year, according to market researcher Newzoo. However, the industry saw its slowest growth over the last 10 years as it grew 5.4 percent year-over-year during the first half of 2018, according to a report by Beijing-based research firm GPC and China’s official gaming association CNG.

Fortnite and PUBG — another battle royale title backed by Tencent — have perhaps suffered the most since they are universally popular worldwide but unable to monetize in China. It seems almost certain that those two titles will receive a major marketing push if, as and when they receive the license and, if Epic can keep the game competitive as Sweeney believed it could back in 2012, then it could go on and make even more money in 2019.

Epic Games is taking on Steam with its own digital game store, which includes higher take-home revenue rates for developers.

But Epic isn’t relying solely on Fortnite.

A more low-key but significant launch this month was the opening of the Epic Games store, which is aimed squarely at Steam, the leader in digital game sales.

While Fortnite is its most prolific release, Epic also makes money from other games, Unreal Engine and a recently launched online game store that rivals Steam. Epic’s big differentiator for the store is that it gives developers 88 percent of their revenue, as opposed to Value — the firm behind Steam — which keeps 30 percent, although it has added varying rates for more successful titles. Customers are promised a free title every two weeks.

Either way, Epic is betting that it can do a lot more than Fortnite, which could mean that its profit margin will be even higher come this time next year.

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David Prowse, the original Darth Vader, is dead at 85

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David Prowse, who played Darth Vader in the first three Star Wars films, has died at the age of 85. Prowse’s agent confirmed the news to the Hollywood Reporter on Saturday evening.

Prowse was a body builder who stood six feet, seven inches tall when he won the Vader role for the original 1977 Star Wars. Prowse also played Vader in The Empire Strikes Back and Return of the Jedi.

In 2016 interview, Prowse said that George Lucas offered him a choice between playing Darth Vader or Chewbacca. Prowse chose Vader, and the Chewbacca role went to Peter Mayhew, who died last year.

But while Prowse supplied Vader’s body, George Lucas decided not to use the Brit’s voice. He dubbed in lines by the baritone James Earl Jones instead.

When Darth Vader next appeared in a Star Wars feature film, in 2005’s Revenge of the Sith, he was played by Hayden Christensen, the actor who played Annakin Skywalker in the prequels.

The Hollywood Reporter described Prowse’s early life:

Born on July 1, 1935, in Bristol, England, Prowse was misdiagnosed with tuberculosis of the knee and forced to wear a leg splint for four years as a youngster (it turned out he actually had osteoarthritis). Yet he went on to compete for the Mr. Universe bodybuilding title in 1960 before capturing the British weightlifting championship three straight years running, from 1962-64. (At age 50, he was still able to dead-lift 700 pounds.)

Prowse played a bodyguard in the 1971 film A Clockwork Orange. He also appeared in a number of lesser-known films. He played Frankenstein’s Monster in three different films in the late 1960s and early 1970s. Around the same time, he became known in the UK for playing “Green Cross Code Man” in traffic safety commercials.

Prowse’s agent told CNN that he died after a short illness. Prowse had previously been diagnosed with prostate cancer.

Listing image by Sunset Boulevard/Corbis via Getty Images

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How to With John Wilson is the year’s best nature documentary

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How to With John Wilson airs Fridays on HBO

At this point, it’s practically mandatory for any show set in New York to open with shots of landmarks like the Empire State Building, Central Park, or a row of honking yellow taxis in rush hour traffic. Anything quickly recognizable will suffice, as long as it represents life in the big city. (Looking for arty vibes? Search no further than Washington Square Park.) HBO’s docuseries How to With John Wilson doesn’t break from this tradition. In addition to a montage of New Yorkers on the street scored to tinkling jazz, How to gives us a shot of the World Trade Center, gleaming upwards from Lower Manhattan. There’s a key difference in how creator John Wilson shoots this image, though, one that reveals his off-kilter perspective. Instead of zooming overhead, he positions the World Trade Center in the background. Front and center instead: a grungy dumpster.

An opening that juxtaposes New York’s iconography with its garbage could look a tad obvious, like knockoff Banksy. But How to With John Wilson is one of the most consistently surprising shows on TV—original, not derivative. That early shot is as close to an easily-digestible statement of purpose as the show makes. Its brisk 25-minute installments are framed as tutorials, with the Queens-based Wilson carting his camera around the city attempting to learn how to accomplish various tasks by talking to people he encounters. (“How to Put up Scaffolding” and “How to Cover Your Furniture” are two episode titles.) These episodes aren’t instructive as much as wildly digressive; Wilson allows his chance encounters to unspool into intimate connections with strangers, often venturing into their homes as they divulge their pet projects, theories, and passions. The point is that no one ever knows what they’ll discover when they start asking questions. When he was younger, Wilson worked as a private investigator, and his output has a voyeuristic undercurrent. He’s brilliant at capturing public glimpses of private lives.

The elevator pitch for How to With John Wilson could’ve been something like “Nathan for You meets Humans of New York,” especially since Nathan Fielder serves as an executive producer and the show’s most high-profile champion. Nathan for You, which ran for four increasingly artful seasons on Comedy Central, was also hard to explain—it was a prank show, sort of, that satirized reality television and American business ethics. Fielder hosted in character, convincing real entrepreneurs to carry out ridiculous stunts meant to attract new customers.

There is a kinship between Fielder’s and Wilson’s work. Both of their projects hinge on coaxing real people into revealing themselves. They are both deliberately subdued hosts, all the better to make the chaos they cultivate look organic; Wilson doesn’t even appear on-camera in his show, preferring to remain as the unseen narrator steering the action. A key distinction, though: Nathan for You had a harder-nosed approach to its ordinary-people subjects, who often wound up uncomfortable and embarrassed because of their participation. How to With John Wilson is a far more tender endeavor. Its storylines are fueled by Wilson’s leaps into intimacy with strangers. One episode features startlingly prolonged full-frontal male nudity, the result of one such stranger feeling comfortable enough to Donald Duck his way through Wilson’s interview, curling up into a ball on his bed without pants or underwear. Even when the people he meets behave in objectively bizarre ways, Wilson documents the absurdity without mocking it.

In the third episode, “How to Improve Your Memory,” Wilson enters a grocery store looking for a specific brand of candy he remembers from his childhood. When he asks for help, he meets a man who built software for stocking the store’s shelves. The man can’t help him with the candy, but as it turns out, he has a lot to say about memory. He invites Wilson back to his office, where they discuss the “Mandela effect,” a phenomenon where a group of people remember something differently than how the historical record indicates it occurred. By the end of the installment, the pair are in a Best Western in Ketchum, Idaho, together, contemplating the nature of reality.

Wilson began his film career by posting documentary shorts directly to Vimeo, including videos using the same “How to” framework. They took years to complete, as he shot footage and stitched it together into narratives in his free time while working odd jobs. Their viewership was small but enthusiastic, and when Fielder saw Wilson’s work, he reached out to collaborate. The Nathan for Youcreator helped the resolutely DIY director come up with the project’s real elevator pitch, telling networks the premise was “Planet Earth, but for New York.” By evoking the famously well-made nature documentary series, Fielder nailed down Wilson’s central achievement. Just as Planet Earth captured animal behavior rarely seen on film with unprecedented clarity, How to With John Wilson is a collage of real human behavior that is rarely, if ever, seen so clearly.

In an interview with The New York Times, Wilson described his approach as “letting the story come to you.” He walks around with his camera and interviews people about the subject, collecting hours and hours of on-the-streets footage. He then collages together a narrative from what he finds, using voice-over to tie it together. It’s a method that yields incredible results, but there’s a downside: It took two years to gather enough footage for this six-episode first season, which clocks in at less than three hours total. It’s not a scalable project, which is key to its idiosyncratic charms. To create an observational achievement of this caliber requires patience. Despite its title, Wilson’s show isn’t really a lesson. It’s a reminder of how rowdy ordinary life can be, if you know how to pay attention.

This story first appeared on Wired.com.

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That time Roger Ebert said games will never be as worthy as movies

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Enlarge / Film critics Roger Ebert (center) and Gene Siskel appear on The Tonight Show with Johnny Carson on December 12, 1986.

Gary Null/NBCU Photo Bank/NBCUniversal via Getty Images

Update: Fifteen years ago around Thanksgiving, legendary film critic Roger Ebert set off a mini-storm in video game journalism circles by taking to his column and poo-pooing the medium. And with Ars staff off for the holiday weekend, we thought it’d be interesting to resurface this analysis of Ebert’s critiques from Ars contributor Jeremy Reimer. While there have definitely been a few game-to-film duds in the intervening years (ahem, Assassin’s Creed), there’s been no shortage of breathtaking video game storytelling (Her Story) or Hollywood looking to new titles (Last of Us on HBO, either. This piece originally ran on November 30, 2005 and appears unchanged below.

Roger Ebert, the famed movie critic for the Chicago Sun-Times and co-host of the syndicated TV show Ebert and Roper at the Movies has thrown down the gauntlet on his website by stating that video games will never be as artistically worthy as movies and literature. Ebert does not believe that this quality gap can ever be crossed, as he feels it is a fundamental limitation of the medium itself:

There is a structural reason for that: Video games by their nature require player choices, which is the opposite of the strategy of serious film and literature, which requires authorial control.

Whether or not interactive art can still be art is an interesting question. Modern artists such as Chin Chih Yang, who design interactive multimedia projects as well as creating “traditional” art, would probably tell you that whether something is “art” depends on only the artist and the audience, and not the medium itself. However, there are undoubtedly more conservative artists who would dismiss “interactive multimedia projects” as not being worthy of the term art. Of course this debate is not a new one, nor has it been confined to video games. Movies and comic books both struggled (and still struggle) to receive the same level of respect as traditional media, such as literature and dramatic plays.

But is it really the “interactive” part of video games that Ebert is criticizing? To me, it seems like a convenient excuse to dismiss for all time a new form of entertainment that has not only influenced movies (with endless releases of video-game-themed movies such as Tomb Raider, Mortal Kombat, Resident Evil, etc.) but at times even seems to be in competition with cinema itself. Every time movie sales go down, some pundits start looking to the video game industry as being the source of the problem.

I don’t believe the “interactive” nature of video games is what Ebert is really railing against here. While he gave a poor review to the movie Clue, which featured multiple endings, he admitted in his review that it would have been more fun for viewers to see all three endings. He seemed to be indicating that if the movie itself was of higher quality, being given a choice of endings would have made it even more entertaining. Like Clue, video games can feature multiple endings or storylines, but all of them have been written by the writer ahead of time. The fact that the player can choose between them does not make any of the choices less of a creation by the game developers.

A closer examination of Ebert’s comments seems to indicate that he is critical of the artistic value of the games themselves, not their structure:

I am prepared to believe that video games can be elegant, subtle, sophisticated, challenging and visually wonderful. But I believe the nature of the medium prevents it from moving beyond craftsmanship to the stature of art. To my knowledge, no one in or out of the field has ever been able to cite a game worthy of comparison with the great dramatists, poets, filmmakers, novelists and composers. That a game can aspire to artistic importance as a visual experience, I accept. But for most gamers, video games represent a loss of those precious hours we have available to make ourselves more cultured, civilized and empathetic.

Some might be eager to tell Ebert about games that he may not have ever seen or played, such as Star Control II, or Planescape Torment, where the story is given higher focus than the graphics and is at least comparable to literary fiction. Or games such as ICO, where the atmosphere and feel of the environment and characters is on par with any “serious” art film. But perhaps Ebert hasn’t heard of these titles because video games in general have been deluged with an endless parade of flashy sequels and movie tie-ins that favor graphics over gameplay. Perhaps if a viable analog to the independent movie industry emerged for video games, Ebert might change his tune. But is this likely to happen?

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