Epic Games is the company behind the blockbuster video game Fortnite, one of the most popular games in the world, with over 350 million active accounts.
However, Fortnite is just one of Epic’s impressive achievements. The company also developed the Unreal Engine, a powerful tool that powers many high-end games worldwide. This versatile technology is also used in various other industries, such as film and television, architecture, automotive, manufacturing, and simulation.
Additionally, Unreal Engine supports the Epic Games Store and Epic Online Services, offering an integrated platform that allows developers and creators to create, distribute, and play games and other digital content.
The company’s success with its popular games and unreal engine generates significant revenue. If you’re one of the millions who have invested in Epic’s platform, you’re probably wondering how to invest in the company and share in its growth potential.
Here is a guide on how to invest in Epic Games and important factors to consider before you invest.
Is Epic Games publicly traded?
As of the end of 2023, Epic Games had not yet gone public with an initial public offering (IPO). Therefore, investors cannot buy shares of a company on a stock exchange using a brokerage account.
Who owns Epic Games?
Epic Games is a private company with the following key stakeholders:
- Tim Sweeney, the founder and CEO, holds a majority stake in Epic Games, owning more than half of the company’s stock.
- Tencent (TCEHY 2.89%): The Chinese technology and entertainment giant owns about 40% of Epic Games’ stock.
- Sony (SONY -1.17%): The Japanese entertainment group owns about 4.9 percent of Epic Games.
- Kirkby: The holding company that owns the Lego Group has a 3% stake in Epic Games.
Will Epic Games IPO?
As of late 2023, Epic Games had no plans to launch an IPO. Speculations about a possible IPO have been swirling since 2021, with some believing 2024 could be the year it finally happens.
However, the market for initial public offerings (IPOs) is facing difficulties due to rising interest rates, a sluggish economy, and problems in the banking sector. Epic Games may wait for more favorable market conditions before proceeding with the IPO.
How to invest in Epic Games
While you can’t directly invest in Epic Games until it goes public, you can still see its growth potential by investing in two publicly traded companies. Epic: owns stakes in Tencent and Sony. Tencent, a tech and entertainment giant, trades in the OTC market, which allows you to buy shares through your brokerage account. Sony, a global leader in technology and entertainment, trades on the New York Stock Exchange (NYSE).
Tencent owns 40% of Epic Games, giving it the highest level of investment in the company. However, this is only a small part of Tencent’s vast empire, which includes communications, digital content, and financial technology services. Tencent has investments in more than 800 companies, including the popular Chinese app WeChat.
Similarly, Epic Games is only a small part of Sony’s diverse portfolio. Sony is one of the largest electronics manufacturers, a leading producer of video game consoles (PlayStation), and a major video game publisher. Sony Entertainment is also a leading music publisher, record label, and film studio.
For those looking to own a piece of Epic Games, investing in Tencent or Sony is currently the only way to gain indirect exposure until Epic Games completes its IPO.
Alternatives to investing in Epic Games
If you want to invest in the video game industry, consider these alternatives:
- Take-Two Interactive (TTWO -0.74%): Known for franchises like Grand Theft Auto, NBA 2K, and Red Dead Redemption.
- Electronic Arts (EA -0.15%): Creator of the popular sports franchises Madden and FIFA.
- Roblox (RBLX 1.7%): A platform on the Internet that allows users to play games created by other users.
Should I invest in Epic Games?
While you can’t directly invest in Epic Games yet, if it launches an IPO in the future, consider these factors before investing:
Is Epic Games profitable?
Since Epic Games is a private company, little information is publicly available about its finances. However, according to documents released by Apple (AAPL 0.58%) regarding the legal battle to get Fortnite on the App Store, Epic Games is still not profitable. During the years 2019 to 2021, the company faced annual losses estimated between $100 million and $200 million. The company’s Epic Games Store was also losing money through the end of 2023 as it focused on growth in an attempt to gain market share from Apple and Alphabet (GOOG 0.42%) (GOOGL 0.31%).
Losing money is common for growing technology companies. They are usually investing heavily in new products. In Epic’s situation, they are focusing on expanding their Epic Games Store and creating new games.
Is Epic Games in stock?
Epic Games is a privately held company that is not publicly traded on major stock exchanges.
Epic Games’ revenue
According to Sacra, Epic Games is expected to generate $5.2 billion in revenue in 2022, including sales of Fortnite and revenue from its Unreal gaming engine. Additionally, PC gamers contributed $820 million to Epic Games Store revenue this year.
This impressive revenue exceeds the revenue of some publicly-traded gaming companies. For example, Roblox was projected to generate less than $3 billion in revenue in 2023.Epic Games revenue fell just short of Tech2 Interactive’s estimate of $5.5 billion to $5.6 billion for fiscal 2024. However, EA led the pack with $7.6 billion in total net revenue over the past year.
Who owns Epic Games stock?
Epic Games’ ownership is divided among several private investors, including Tim Sweeney, founder, and CEO, who plays a key role. Tencent Holdings, a Chinese multinational, owns about 40% of Epic Games. Other private investors and venture capital firms also hold stakes in the company.
Epic Games’ valuation
In early 2022, Epic Games secured an additional $2 billion in funding when both Sony and Kirkby invested $1 billion each. The investment is intended to support the development of the children-oriented Metaverse, valuing Epic Games at $31.5 billion.
Comparatively, this puts Epic Games in a league with many publicly traded game makers. For example, by the end of 2023, EA’s market cap was slightly over $37 billion. Roblox had a market value of $28 billion, while Take-Two reached a market value of close to $27 billion.
Is Epic Games in the stock market?
No, Epic Games is not listed on the public stock market. It is a private company, so its shares are not available for public trading.
Final Words on Investing in Epic Games
Currently, you can’t buy Epic Games shares due to the lack of an IPO. However, investing in Tencent or Sony allows you to gain indirect exposure. Alternatively, investing in other video game companies could provide opportunities to take advantage of industry growth until Epic Games launches its IPO.
FAQs on investing in Epic Games
Has Epic Games completed an IPO?
As of the end of 2023, Epic Games had not yet gone public through an IPO, and there were no plans for an IPO anytime soon.
Why should I invest in Epic Games?
Consider investing in Epic Games if you believe in the company’s potential for market-beating performance, thanks to its popular games and unreal engine.
What company owns Epic Games?
Epic Games is a privately held company, and Tim Sweeney has a majority stake in the company. Tencent holds a 40% stake, while Sony and Kirkbi have minority interests.
Can I invest in Epic Games?
Until the end of 2023, you cannot invest directly in Epic Games because it is not publicly traded. However, you can invest in companies like Sony and Tencent, which have stakes in Epic Games, to give some indication of its growth potential.
What is Epic Games stock?
Because Epic Games is a private company, its “stock” refers to privately held shares owned by founders, employees, and private investors. These shares are not publicly traded and can only be bought or sold through private transactions, usually involving accredited investors or investment funds.
