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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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New Star Wars 1313 footage reveals the (canceled) Boba Fett game we always wanted

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Enlarge / Nice splash of colors and reflection effects in this newly unearthed footage of Boba Fett as the star of canceled game Star Wars 1313.

A new YouTube video making the rounds reveals that a long-canceled Star Wars game would have been the first time that bounty hunter and fan favorite Boba Fett starred in his own game.

Long before Fett scaled the streaming mountain of Disney+, the game development teams at LucasArts began work on an action video game about bounty hunters and the planet Coruscant. As Jason Schreier reported in his games-industry book Blood, Sweat, and Pixels, that project, dubbed Star Wars 1313, wildly morphed over a four-year span. 1313 was started in 2009 but was canceled after LucasArts shut down in 2013—a casualty of Disney’s acquisition of all things Lucasfilm and Star Wars.

While we’ve seen teases of Star Wars 1313 before—especially during its splashy debut at E3 2012—public footage thus far has been limited to the game’s brand-new bounty hunter heroes. This week’s video is the first to show what Boba Fett looked like as 1313‘s playable hero, a development shift mandated by George Lucas months before the E3 2012 reveal. Coincidentally, Lucas also demanded that Fett not appear in that public 2012 reveal.

Fett is finally seen taking Uncharted steps

The new video comes from The Vault, a YouTube channel that focuses almost exclusively on details and leaks surrounding the canceled Star Wars Battlefront III project. The channel’s first-ever video about Star Wars 1313 culls primarily from the portfolio of James Zachary, who directed 1313‘s animation team and led its motion-capture department.

Since Zachary’s Boba Fett videos are marked “private” and don’t have timestamps, we can’t be certain how long they’ve been hiding in plain sight on Zachary’s portfolio site. This footage shows 1313 at the point in which its development had shifted squarely into “Star Wars does Uncharted” territory, as opposed to an earlier state that reportedly borrowed from Gears of War.

Yes, every NPC looks identical—that's what pre-pre-alpha tends to look like. But as far as an atmospheric slice of an unfinished game, Boba Fett's stroll through a bar looks and sounds full of life. It cuts off before we see whether he faceplants into a Sarlaac pit, however.
Enlarge / Yes, every NPC looks identical—that’s what pre-pre-alpha tends to look like. But as far as an atmospheric slice of an unfinished game, Boba Fett’s stroll through a bar looks and sounds full of life. It cuts off before we see whether he faceplants into a Sarlaac pit, however.

Fett is framed in a three-quarters, third-person camera perspective, and The Vault video includes two discrete sequences: an atmospheric walk through a seedy bar, where he must contend with disagreeable patrons bumping into him, and an action-filled chase sequence complete with dramatic jumps, cliffside hangs, and downhill slides. While the video’s first half has a few clearly unfinished assets, the second half is all “gray boxes” and other rudimentary content.

Boba Fett, seen here scaling and climbing in an unfinished segment of canceled game <em>Star Wars 1313</em>.
Enlarge / Boba Fett, seen here scaling and climbing in an unfinished segment of canceled game Star Wars 1313.

Zachary describes the chase sequence as something “used to sell the ‘environmental interaction’ animation pillar” of Star Wars 1313. The Boba Fett we see may very well be a reskin of the game’s original brand-new bounty hunter protagonist, as the chase doesn’t include any of Fett’s signature jetpack moves—which, as Schreier reported, had evolved and become functional during development before the project was canceled. Instead, the chase looks like a Nathan Drake sequence with a Coruscant background, what with all the floating vehicles zipping across the horizon.

Boba Fett, seen casually sliding past a WALL or two (in clear pre-pre-alpha footage of <em>Star Wars 1313</em>).
Enlarge / Boba Fett, seen casually sliding past a WALL or two (in clear pre-pre-alpha footage of Star Wars 1313).

Coincidentally, Star Wars 1313 began life as a “connected universe” project. That means it would join the same gritty universe that George Lucas had been putting together for a planned, adult-focused Star Wars TV series dubbed Underworld. The game project continued moving forward even as its associated TV series descended into development hell before vanishing entirely.

With The Mandalorian, the Star Wars powers-that-be have carried on what Underworld began, at least on the TV front. And the success of The Mandalorian and the Book of Boba Fett TV series means we shouldn’t be surprised if one of the mysterious, recently announced Star Wars game projects from EA and Respawn follows a Fett-like bounty hunter.

Star Wars 1313 Boba Fett footage.

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Valve confirms Steam Deck shipment, review dates: By the end of February

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Enlarge / Starting on February 28, Steam Deck will finally leave Valve’s hands and (possibly) land in yours.

Aurich Lawson | DC

After delaying Steam Deck’s launch to a vague “February 2022” window, Valve has returned to keep its promise. Today, the company confirmed the date its portable, gaming-centric PC will begin shipping to some preorder customers.

Valve listed two key dates in its Wednesday announcement. The first date: Steam Deck will begin shipping February 28. This applies to customers who got their $5 preorder payments in at the earliest possible time, i.e., the first few minutes after the clock struck 1 pm EST on July 16.

Customers have a chance of being part of this shipment window if their order has an official Steam shipping estimate of “Q1 2022,” which they can check by loading the Deck store page while logged into Steam.

“Launching” on February 25 (but not really)

But there’s another crucial date for Steam Deck preorder customers to keep in mind: February 25. That’s when Valve will send emails to an unconfirmed number of preorder customers requesting that they pay the rest of the console’s asking price. That figure ranges from $399 for the 64GB storage model to $649 for the largest 512GB storage model.

Valve’s announcement clarifies that these email alerts—which essentially ask preorder customers to pay the rest of their tab—will land at 1 pm EST on that Friday afternoon. The alerts, says Valve, will be sent out in the order that successful preorders were made. Customers who receive the alerts have exactly 72 hours to pay, and if they miss the window, their reserved console will move down the list to the next slew of preorders.

The announcement also mentions that Valve will operate a “weekly cadence” of Deck preorder payment requests. This suggests that the full gamut of “Q1 2022” preorders will be broken up between February 25 and the end of March. In other words, if you didn’t lodge your Deck preorder within the first 45 seconds of the floodgates opening on July 16, you might have to wait a week or four.

Valve’s post doesn’t clarify whether quicker preorder payments will change the order in which these systems are shipped. But based on the language used in the announcement, it sounds like users won’t need to hover over their inboxes on that Friday to be part of the first shipping wave on February 28. Just, you know, maybe don’t pick that weekend to unplug from the Internet.

One way to check the Deck

What’s more, preorder customers will get a reason to wait a few hours before pulling the “rest of the Deck tab” trigger. Valve has confirmed that Deck systems are being mailed to members of the press “shortly,” and the systems have a review embargo of February 25.

This review date will follow Valve’s tease of “preview coverage and impressions before that” date. If Ars’ experience reviewing the Valve Index virtual reality system is any indication, fans might expect to see a specific system feature broken out into a preview article, much like how I posted about “living with Valve Index as a work monitor for a week” before the product’s formal June 2019 launch.

Related: the comments section of this article would be a great place to request specific tests, benchmarks, use cases, touchpad scrutiny, cloud-sync confirmation, emulation front-ends, OS installations, game compatibility, and other things that Ars Technica might apply to a Steam Deck review, should Ars indeed be among the members of the press invited to Deck’s upcoming review period. (As the first reporter to confirm Steam Deck’s existence, I’ve already been dreaming up coverage plans in the case of such a review opportunity.)

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Pokémon Legends: Arceus is a breath of fresh air for a stale franchise

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Enlarge / Pokémon Legends: Arceus is as close as we’ve ever gotten to an open-world Pokémon game.

Nintendo

Last year’s by-the-numbers Pokémon Diamond and Pearl remakes did even less than most Pokémon games to spruce up and modernize the series’ decades-old formula. That’s understandable for a remake of a 2006 Nintendo DS game, but the games were still disappointing follow-ups to the more adventurous Sword and Shield.

The good news is that if you’ve been waiting for Game Freak to really shake up Pokémon‘s gameplay without totally burning it to the ground and starting from scratch, Pokémon Legends: Arceus is the game you’ve been waiting for. Part Pokémon and part Breath of the WildLegends takes the free-roaming “Wild Area” concept from Sword and Shield and updates the series’ catching and battling mechanics to match.

That’s not to say it’s a perfect fusion of those disparate elements. Its mission-based structure gets pretty fetch quest-y, it leans heavily on an over-familiar roster of existing Pokémon, and the aging Switch hardware sometimes struggles to make it look good, especially when docked. But despite those problems, the whole package works together surprisingly well, and it makes the Pokémon feel fresher than it has in quite a while.

Ancient history

<em>Legends</em> uses a pre-modern aesthetic for the Hisui region, loosely resembling Japan in the early 20th century.
Enlarge / Legends uses a pre-modern aesthetic for the Hisui region, loosely resembling Japan in the early 20th century.

Nintendo

Legends is set up as a distant prequel to Diamond and Pearl that takes place in the Hisui region, which will someday become the modern Sinnoh region. The decision to set Legends not just in the past but way in the past gives it a distinct flavor from main-series Pokémon games. You aren’t just putting together a Pokédex—you’re assembling the first Pokédex. Item shops exist, but you’ll need to craft the vast majority of Pokéballs and other items you use with found materials. And there are few cities, no gyms, and no Pokémon League, which lets the series experiment with new modes of character progression.

Hisui is split up into five different biomes—you can’t walk from one end of Hisui to the other as you can in BotW‘s Hyrule, but each of the five areas has distinct topography that keeps things from getting too samey as you progress. Each biome is inhabited by a rampaging Noble Pokémon who you must calm and befriend, which replaces gyms and badges as the main way the game marks your progress. There are also plenty of side quests to keep you distracted if you don’t want to rush right to the end.

Filling out your Pokédex helps you rank up, which gets you access to better items, additional side quests, and the later regions of the game.
Enlarge / Filling out your Pokédex helps you rank up, which gets you access to better items, additional side quests, and the later regions of the game.

Nintendo

Your character, a member of Galaxy Team, also has a rank within the organization. You rank up by filling out your Pokédex, and you won’t be allowed into the game’s later biomes if your rank isn’t high enough (your rank also affects the kinds of items you’ll be able to craft, among other things). In the main series, all you need to do to fill out a Pokédex is see and catch a single Pokémon of each species. But in Legends, filling out each entry is done by accomplishing a series of sub-tasks, involving everything from catching multiple Pokémon of a single species to seeing Pokémon use specific moves in battle.

Important items like Potions and Pokéballs can be bought pre-made, but you'll be making the vast majority of them yourself using found materials.
Enlarge / Important items like Potions and Pokéballs can be bought pre-made, but you’ll be making the vast majority of them yourself using found materials.

Nintendo

Catching and battling Pokémon in Legends is refreshingly fast and satisfying compared to the usual formula. There are no more random battles and no swirly time-consuming transitions between exploring and battling. All Pokémon are fully visible and walking around—if you want to catch one, the best way to do so is to sneak up on it and toss a Pokéball.

Some wild Pokémon will scamper away if they notice you getting near. Others will get mad and attack you directly. It’s possible to get totally knocked out by a wild Pokémon’s attacks, which will send you back to the nearest base camp with fewer items and a bruised ego. But you can defend yourself by tossing out one of your Pokémon, triggering an essentially traditional turn-based Pokémon battle.

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