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Epic Games is behind some of the most known videos, and mobile games present out there. From Fortnite that had over 350 million players in 2020, to Hitman, they are an evergrowing gaming company in terms of online multiplayer games. The younger people and parents are also interested in getting a share in Epic Games because their kids are always on Fortnite.
What is Epic Games?
Epic Games represents a video and mobile games company publicly listed on a stock exchange using the ticker symbol EPOR as Epic Corp. Epic operates a Fortnite platform, the world’s largest games platform with over 360 million accounts and 2.6 billion friend connections.
Current Epic Games stock price is [stock_market_widget type=”inline” template=”generic” assets=”EPOR” markup=”{price} ({change_pct})” api=”yf”]
Epic Games stock chart:
[stock_market_widget type=”chart” template=”basic” color=”#5679FF” assets=”EPOR” range=”1mo” interval=”1d” axes=”true” cursor=”true” range_selector=”true” api=”yf”]
Although Fortnite is free of cost to play, they do have an elite membership for $11.99 through which the players could get different advantages such as a variety of weapons. So now the critical point, how to invest in Epic Games?
Did Epic Games buy Rockstar?
No, Epic Games did not buy Rockstar. Rockstar is a wholly-owned subsidiary of Take-Two Interactive Software, Inc.
Who owns Epic Games?
Epic Games is owned by Tom Sweeney, the company’s founder, who owns 50% of the company. Next, the Chinese partner Tencent Holdings (TCEHY) has 40%. Other investors in Epic Games are Lightspeed Venture Partners, T. Rowe Price, Baillie Gifford, Fidelity, Blackrock, Ontario Teachers’ Pension Plan Board, KKR, David Tepper, and Smash Ventures.
Is Epic Games a public company?
No, Epic Games is not a public company and it is privately owned by Tom Sweeney, Tencent Holdings, and few smaller investors.
When Epic games welcomed fundings last year in August, they could raise over $17.3 Billion all from private investors, signifying its capability to bring in money without the need of going public and selling shares.
Epic Games: Price And Symbol Of The Stock
Epic Games shares have no price or a symbol to be listed in the stock market because they haven’t gone public. A significant part is in the hands of Tom Sweeney, followed by Tencent Holdings, their venture capital. The symbol EPIC isn’t taken by anyone across any US stock exchanges. Therefore it seems to be the correct symbol for them.
Though there is no stock price for Epic Games, you could still have an indirect share via investing in Tencent Holdings, the owner of 40% of shares at the company.
Can I buy Epic Games stocks?
No, you can not buy Epic Games stock because it is not public trading company. However, if you have a stock trading broker account you can invest in Tencent Holdings company (symbol TCEHY) that is the owner of the Epic Games.
The massive gaming company does have stocks, but sadly, they rotate between them, meaning they are private. Therefore if you wish to invest in Epic Games independently, then the same won’t be possible via a brokerage account or a stock exchange. The only way possible to become a part of the company is to invest in their investors.
The value proposition of Epic Games
The company has a lot of games listed on its website that the users can download and get their hands on playing in a competitive environment. However, each has its pricing based on the cost involved and the number of people buying them. For instance, Bloodlines 2, when launched, was sold for $59.99, whereas on the other hand, Medium was sold at $44.99 in February 2022.
Other companies also sell their games via Epic Games’ high-traffic websites, such as Electronic Arts’ Star Wars Titles and Rockstar Games’ selling their popular Red Dead Online. It charges a commission from other companies, and their primary source of income is their games. The company also makes a lot of money through its free-of-cost MMOGs.
Epic Games earned a lot of revenue by Fortnite in 2019, $1.8 Billion to be exact. When it was launched on the Apple App Store, reports from Sensor Tower claim they could generate revenue worth $25 Million in 2018. However, the deal with Apple didn’t stay long as Fortnite was removed due to the game having an inbuilt payment system that cut Apple’s 30% fee.
The following issue became quite a lot controversial, and Apple was blamed for being abusing its power. Still, it has hurt Epic Games’ reputation entirely since 2020 as the App Store is the most prominent digital marketplace. Afterward, Alphabet-owned Google Playstore also cut its ties with Fortnite due to unknown reasons.
Creation Tool: Unreal Engine
Epic Games is benefitted a lot with their 3D creation tool known as the unreal engine. Anyone from moviemakers, video game designers, or other creators can access this tool to create artwork, commercials & ads, movies, and 3D games. It is also helpful for science and medicine industries, architecture and engineering, industrial design, website design, training, etc.
Epic Games hopes that with the launch of Unreal Engine, they can take over two big industries, software, and game development. They would also be able to make money via charging creators and businesses using Unreal Engine for their purposes.
Epic Games stock market and IPO
The company will not have an IPO listing anytime soon since it has a significant presence that helps them raise funds without the need to go public. If we look at the current scenario, founder Mr. Sweeney has everything in his hands but with Tencent’s capital. If Epic ever goes live on a stock market, the whole control system will be changed.
There is no need for it to go public until it cannot bring in money via private funding. Epic is the new tech unicorn that gets a lot of money from subscriptions and purchases, enough for them to survive for years. But, if someone wants to find a way to invest, then here are a few ways to do so.
Three best ways to invest in Epic Games and other alternatives
1. Tencent Holdings & Epic Games
So what if Epic Games doesn’t have its IPO? Tencent does, and it is a great way to be an indirect part of the latter since they have over 40% of shares in the same. Its stock ticker is TCEHY, and it’s the largest video game company in the whole world, backed by a Chinese Multinational Company.
One of Tencent’s most known games under its hood is League of Legends, a riot game. According to PCGamer, it is the most played game on a Personal Computer ever. In fact, in 2020, 115 million players were active in the game, which resulted in a massive revenue of $1.5 Billion. In addition, its 100% ownership is with Tencent, which makes it a profitable move for investors.
Next, Tencent also has 80% of the shares of Grinding Gear Games who own Path of Exile, which had approximately 240,000 players back in January of 2020, which further grew by 11%. In the second quarter of 2020, Macrotrends estimated Tencent valuing at $16.2 Billion, after which Statista estimated their gross profit to be 142.12 Billion Yuan.
Tencent itself reported an operating income of 109.400 Billion Yuan, which is $16.93 Billion. Overall when we see these statistics, they prove that Tencent is a massive company with huge potential ahead. Though it is not too easy to estimate other values such as net profits and income due to the currency exchange, the value of this company speaks for itself.
As of February 3, 2022, Mr.Market had priced its shares at $93.90, which is perfect for this Chinese holding, and if you’re looking forward to investing in a company just like theirs, then their profile is worth taking a note of. Though some investors might be worried because of their terms with the Chinese Communist Party, some will believe in the safety coming from the Chinese government.
Also, if someone thinks that investing in Tencent will lead to a lapse in the American Economy, they should know that Tencent also paid out a dividend on May 14, 2020.
2. Leading Competitor Electronic Arts
One of the biggest gaming companies that are also public, this one trading with the ticker EA could be a fantastic choice. There are several massive games under them, such as NFL, FIFA, Star Wars, Need For Speed, UFC, The Sims, Apex Legends, NHL, and Medal Of Honor. In 2019, Apex Legends by EA had over 70 Million users worldwide, as reported by Statista.
The company is highly successful in making money from games and even reported a quarter’s gross profit at $865 Million, with an operating income of $149 million on September 30, 2020. The very same day, its revenue was reported at $1.151 Billion of the very same quarter. But this announcement depicted lesser numbers when compared to 2019.
It had $1.593 Billion reported as quarterly revenues in that year, but the not so much difference shouldn’t impact your decision since the statistics still show an amazingly profitable opportunity. According to Mr. Market, its shares are estimated to be at $138.06 each as of February 4, 2022. This value is more significant than 2019, wherein their shares were just at $107.7.
These values don’t define their hype; their functioning does, and if we take a look at it, it is undoubtedly a great way to add more value to your pre-existing investment portfolio.
3. Activision Blizzard, Inc.
The company behind the renowned Candy Crush Saga, Activision Blizzard, going by the stock ticker ATVI is a significant investment. It also has Call of Duty, World of Warcraft, and Overwatch under itself. World of Warcraft is quite a famous game, though mocked and has 4.74 million subscribers in 2022. According to Statista, the company struggles with the consistency of players.
As per the numbers, the subscribers of World of Warcraft were at 5.67 million in 2016, and further ahead, the numbers will fall more by 2023. But, Call of Duty and Candy Crush balance the same failure, with 273 million active players of Candy Crush as of 2020 and Call of Duty lying at 110 million active users.
Between the third quarter of 2019 and the third quarter of 2020, Activision reported that their player count increased by 25%; the sales generated from games increased by 46%. The company does a good amount of business, Its quarter’s operating income as of September 30, 2020, was at $778 Million, and the same quarter’s gross profit was $1.485 Million, to be exact.
The numbers were higher in comparison to 2019, wherein their quarterly operating income was $454 Million. Gross profit also increased by $1.33 Billion. However, the revenue fell from $1.986 Billion to $1.954 Billion in 2020. Nevertheless, revenues ahead are expected to grow by 52.%, according to Stockrow. This is massive since, in June 2020, the expected rate was 38.4%, and in December 2019, the percentage was negative at -16.62%.
Its ending cash flow was reported to be at $1.077 Billion in September 2020, and the debt is also not much, being around $3.065 Million in the long-term as per the same month and year. Moreover, it last paid an annual dividend in April 202, which was higher than 2019’s.
The stock is a fantastic choice if not Epic Games company stocks; the prices are rising, slowly and steadily, but are. If you do not want a dynamically shaking stock of a gaming company, then Activision is a safe option to go for.
Will Epic Games ever have an IPO?
With the success of Activision, it is clear that investing in gaming companies would be a good decision. Moreover, with their steady growth, if Epic Games’ stock market chart is available, it would benefit the company. But still, there is no such idea or thought announced by the founder Tom Sweeney or Tencent Holdings.
Even the company’s chances of having a listing in the stock market any sooner are low since they earn a lot of money by selling subscriptions of their MMOG and extra amenities. This means that they are quickly making money without stocks. Another considering factor is the shares in the hand of Tencent Holdings.
The company won’t be willing enough to leave the 40% shares it has in Epic Games, but still, there are possibilities that Epic Games are recommended to launch an IPO several times by Tencent. Both Tom and Tencent have massive heaps of shares that could be sold or borrowed amongst each other.
As an investor, one must keep an eye on Epic Games going public since this could be a profitable opportunity. Their demand is excellent and steady in comparison to others.
In Conclusion: Is it wise to invest in a gaming company in 2022?
As humans, we all love something digital to spend time on, and what better than games! According to several types of research, people are willing to pay a reasonable amount for games to play them. As a result, games are the most popular entertainment, and there are over 2.7 billion players worldwide.
The Asia Pacific has the most number of players, 1.447 billion to be exact. Tencent has a great hold in that market, and Epic Games is well placed. Revenues for video games globally are estimated to be $179.7 Billion, according to MarketWatch. According to IDC, revenue for gaming is increasing day by day.
Gaming is a sector that holds a significant amount of potential, and investors should look out for the same!
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
Igor regularly publishes trading-related videos on the Fxigor Youtube channel.
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