Epic Games

Epic Games is a developer and publisher.

Epic Games Webpage, Facebook

Epic Games is an American company that develops and publishes video games and provides technology to third-party developers. It also runs its own digital store for PC games - the Epic Games Store.

Tim Sweeney has served as Epic Games' CEO since the company's founding, with Mark Rein as vice president. The company is headquartered in Cary, North Carolina, with additional offices in countries such as Germany, China, Japan, South Korea, Sweden, the U.K., and Spain.

Epic Games as a game producer

Epic Games is primarily a video game producer. Over time, the team's work has appeared on multiple platforms, including PCs, consoles, and mobile devices. The studio has experimented with many genres but ultimately specialized in developing shooters - both single-player and multiplayer. Among the latter, the most notable titles are the Unreal series, Gears of War, and the hugely popular Fortnite Battle Royale.

Unreal Engine

Games developed by Epic Games are built on successive iterations of the Unreal Engine. Third-party companies can license the engine, and since 2015, developers have been able to use it for free, sharing a percentage of their sales revenue.

Epic Games as a game publisher

Epic Games both develops and publishes video games. Early on, its catalog featured works from external developers. However, over time, the company limited its publishing activities to its own games.

Things changed in March 2020 when Epic launched its own publishing division, Epic Games Publishing. The newly established publisher would cover the costs of producing and releasing games for collaborating developers, while leaving them full creative freedom and ownership of their brands. In exchange, Epic Games Publishing would take 50 percent of the revenue from individual projects.

Epic Games Store

In 2018, Epic Games entered the PC digital distribution market. Its platform, the Epic Games Store, stands out from the competition mainly because of its significantly lower revenue share on sold titles. While Valve Corporation takes 30% of the price of each game sold on Steam, Epic Games takes only 12%. As a result, numerous developers and publishers signed exclusivity deals, whether temporary or permanent. Furthermore, during its first year of operation, the company offered free games to its customers.

The history of Epic Games

Humble beginnings

The company now known as Epic Games was founded by Tim Sweeney in 1991 under the name Potomac Computer Systems, named after his home in Potomac, Maryland. Its first game, an adventure title called ZZT, was released in 1991. The unexpected success of the title prompted Sweeney to commit fully to the video game industry, requiring a change to the company's name. Sweeney ultimately selected Epic MegaGames, designed to evoke the image of a powerful company. Shortly after, he was joined by Mark Rein, who had previously worked at id Software. Initially operating remotely, Rein was responsible for the company's sales, marketing, and publishing activities.

Epic MegaGames experienced rapid growth from then on. New members, like Cliff Bleszinski (after working on Dare to Dream), joined the studio, which concentrated both on developing its own games - Xargon, Jazz Jackrabbit, 7th Legion - and publishing works from other developers, such as Zone 66, Ken's Labyrinth, Epic Pinball, and Tyrian. It's worth noting that among the latter were the isometric shooter Fire Fight, developed by the Polish studio Chaos Works, and Electro Man from X LanD Computer Games.

The "Epic" Unreal

A pivotal moment in the company's history came with the release of the FPS Unreal, developed in collaboration with the Digital Extremes team. Released in 1998, the game was both a critical and commercial success, and Epic MegaGames soon started earning money by licensing the Unreal Engine to other developers.

The company relocated to Cary, North Carolina, in February 1999 and took on its current name, Epic Games. It also released Unreal Tournament, which, unlike its predecessor, focused on multiplayer. In the following years, the series continued with Unreal Tournament 2003 and Unreal Tournament 2004.

The console era

Up to that point, Epic Games' games were primarily targeted at personal computers. Around 2006, the company turned to home consoles due to rampant piracy on PCs. Its next release, the third-person shooter Gears of War, launched on Xbox 360 in 2006. Unreal Tournament 3 experienced a similar path, launching in 2007 on PCs and PlayStation 3, and a few months later on Xbox 360.

In addition, the company became involved in a legal dispute with Silicon Knights, which sued Epic Games for failing to deliver a "working graphics engine" on time, resulting in financial losses. That August, Epic Games countersued, alleging that Silicon Knights had used Epic Games' licensed technology without authorization and copied Unreal Engine 3 code into its own engine. In 2012, the long-running lawsuit ended with Silicon Knights required to pay Epic Games nearly $4.5 million and to destroy the source code of games built on Unreal Engine 3, most notably Too Human and X-Men: Destiny. This led to Silicon Knights going bankrupt in May 2014.

In 2008, Epic Games released Gears of War 2 and acquired Chair Entertainment, which launched Shadow Complex in 2009. The company made its mobile debut in 2010 with the release of the action game Infinity Blade. In 2011, Epic Games finished the Gears of War trilogy, and People Can Fly released Bulletstorm.

That same year, the company announced its new game, Fortnite. In June 2012, Epic Games opened a new studio, Epic Baltimore, made up of former members of the 38 Studios team. However, the team didn't last long; it was renamed Impossible Studios in August 2012 and disbanded in February 2013. 2012 also saw Epic Games complete its takeover of People Can Fly. A year or so later, the prequel Gears of War: Judgment was released.

Close cooperation with Tencent

As the video game industry shifted toward "games as a service", Epic Games sold a 40 percent stake to the Chinese giant Tencent in June 2012, which also owns Riot Games, the creator of League of Legends. Around that time, many key Epic Games employees left the company - which then had about two hundred people - including Cliff Bleszinski, Rod Fergusson (who later joined Black Tusk Studios, renamed The Coalition, after Microsoft acquired the Gears of War franchise in 2014), and Adrian Chmielarz and Michal Kosieradzki (who, after leaving People Can Fly, founded a new studio called The Astronauts).

From that point on, Epic Games shifted its focus to "games as a service." In 2014, the studio announced Unreal Tournament, a community-driven shooter released as a free-to-play title. Two years later, in 2016, Paragon launched on PC and PlayStation, though its servers were shut down in April 2018.

Furthermore, 2015 saw the release of a remastered version of Shadow Complex and the debut of Robo Recall, a game designed for virtual reality headsets. Furthermore, the company revised the terms of its technology licensing to third parties; from that point on, Unreal Engine 4 was made available for free, with Epic receiving five percent of the profits from any games developed using it.

Fortnite's success

Fortnite first came out in Early Access in July 2017. A few months later, as battle royale games started to take off, Fortnite Battle Royale was released in September. The latter title grew rapidly, attracting an increasing number of players and generating more and more revenue, ultimately marking the beginning of a completely new chapter in the company's history.

The Epic Games Store opens

In late 2018, Epic Games started its own PC game store, the Epic Games Store. Unlike Valve, which took 30 percent of the price of each game sold, Epic Games collected only 12 percent.

To draw players to its new platform, the company offered free games in its first year and sold exclusive titles such as Metro Exodus, Borderlands 3, Tom Clancy's The Division 2, and PC releases from Quantic Dream. The game giveaway was eventually extended, with users able to claim new free titles every week.

War with Apple and Google

In August 2020, Epic Games enabled Fortnite mobile players to buy premium currency without using Google Play or the App Store. The reaction from both companies was immediate: the game was removed from their digital stores. Although no one admitted it directly, Tim Sweeney's company was prepared for this outcome, quickly filing two lawsuits against Apple and Google. Soon after, the "#FreeFortnite" campaign began, including an ad showing a sinister dictator with a bitten-apple head, clearly referencing Apple's logo.

After Epic Games' move, Apple threatened to cut off Unreal Engine developers, stopping them from updating their apps on Apple devices. Luckily for developers, the court stepped in and granted a temporary injunction, stopping the company from following through. In early September, Apple sued Epic Games, alleging "willful, reckless, and unlawful conduct" and requesting damages, fines, and an injunction against further unfair practices. The case was originally set to be decided by a jury, but Apple and Epic Games reached an agreement for the claims of both companies to be heard in court.

By November 2020, the battle was still far from over, and things hadn't been going well for Epic Games. Suffice it to say, before the scandal, Fortnite had a staggering 116 million players on Apple devices, with an average of 2.5 million playing daily - about 10% of the 25 million people playing Fortnite across all platforms. On top of everything, Apple decided to cut the App Store tax for developers making less than $1 million a year, dropping it from 30% to 15%. As you might imagine, Epic Games' earnings on the Apple platform were significantly higher, so the company not only missed out on the reduced rate but also lost the reputational advantage of presenting itself as a defender of developers "oppressed" by Tim Cook's company.

The legal dispute between the two companies - at least its first part - ended in September 2021. A California court ruled that Apple could not prevent in-app purchases made without using the App Store payment system. As a result of violating the terms and conditions it had previously accepted, Epic Games was ordered to remit 30% of all revenue generated during the period when Fortnite V-Bucks for iOS could be purchased without Apple's intermediary. As this amounted to over $3.5 million, it was difficult to declare a clear winner of the battle at this stage. Furthermore, Tim Sweeney quickly announced that Epic Games would appeal the decision. Even so, the Court of Appeals upheld the ruling, and the Supreme Court declined to take the case.

Epic Games won its legal battle with Google when a jury ruled in its favor in January 2024, finding that Google had monopolized the Android market through its management of the Google Play Store and partner agreements.

Acquisitions

In line with industry trends, Epic Games has actively acquired smaller companies. In May 2019, it acquired Psyonix, the studio behind the popular title Rocket League. In March 2021, Epic Games bought Mediatonic, the studio that made the super popular game Fall Guys: Ultimate Knockout. In November 2021, the company acquired Harmonix. Since the studio specialized in music games, it was tasked with developing "musical experiences" in Fortnite and in Epic Games' future projects. In January 2022, the company announced it was opening a new development studio in Poland. The core of this team was to be the Plastic team, which had developed titles such as Bound, Datura, and Linger in Shadows.

Epic Games continued its expansion by acquiring various companies focused on the technology behind the video game industry. Among them, noteworthy acquisitions include 3Lateral (January 2019), which creates digital human models; Quixel (November 2019), the world's largest photogrammetric asset library; and Cubic Motion (March 2020), which specializes in realistic facial modeling. As a result, Unreal Engine 5 was announced in May 2020, and in February 2021, Epic Games launched MetaHuman Creator, making it easy for creators to make incredibly realistic character models.

In April 2023, the Brazilian studio Aquiris, known globally for the Horizon Chase series, became part of Epic Games' teams.

Although the company appeared to be growing rapidly, news broke in late September that it had been hit by the crisis. Epic Games experienced a wave of layoffs, with 830 employees - 16% of its total workforce - losing their positions. The reason was that development expenses were higher than the profits coming in from Fortnite and other Epic Games products. As if that weren't enough, in September 2023, it was announced that Donald Mustard, the studio's current creative director, would be leaving Epic Games.

In December 2023, we started seeing the first results from some of the acquisitions mentioned earlier. Players could try new Fortnite modes, including LEGO Fortnite, which reminded them of Minecraft, Psyonix's Rocket Racing, and Harmonix's Fortnite Festival.

Disney investment

Players had to wait until February 2024 for major news from Epic Games. That's when we learned that Disney was investing a huge $1.5 billion to buy a stake in Epic Games. The collaboration aimed to create an "open, cohesive, social universe" where players could take on characters and explore stories from Disney, Pixar, Marvel, Star Wars, and Avatar. The plan was to reach 3 billion players through Fortnite crossovers and brand-new projects.

Disney representatives described the entire venture as the "largest entry" into the video game industry in the company's history. Before the transaction could be completed, it had to be approved by regulatory authorities. It's worth noting that at the time of the announcement, there were no indications of major changes to Epic Games' structure, and Tim Sweeney was expected to retain his current position.

The results of this undertaking were soon apparent, as in the following months, Fortnite began featuring characters and events related to Disney brands such as The Avengers, Star Wars, and Pirates of the Caribbean.