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 Overview

Epic Games, Inc is a leading interactive entertainment

company and provider of 3D engine technology headquartered LR PPS ~$930.00
in Cary, NC. The company has more than 40 offices worldwide.
Epic operates Fortnite, one of the world's largest games with LR Valuation ~$31.5B
over 350 million accounts and 2.5 billion friend connections.
Epic also developed Unreal Engine, Which powers the world’s Vehicle SPV
leading games and is used across industries such as film,
architecture, automotive, manufacturing, and simulation. Share Type Common

Through Unreal Engine, Epic Games Store, and Epic Online Share Count 567
Services, the company provides an end-to-end digital
ecosystem for developers and creators to build, distribute, and SPV Fees None
operate games and other content. In 2020 Epic reported $5.1B
in revenue. The company has raised $6.4B in total and was
valued at $32B in its most recent primary round.
Epic Games History
Epic Games was founded by Tim Sweeney as Potomac Computer Systems in 1991, the
company started in his parents' house in Potomac, Maryland. After releasing its first
commercial video game, ZZT (1991), the company rebranded as Epic MegaGames, Inc.
in early 1992. The company eventually moved its headquarters to Cary in 1999, and
changed its name to Epic Games.
Management team

Tim Sweeney - CEO & Founder Adam Sussman - President

● Chief executive and founder of Epic ● President of Epic Games with over 22
Games and creator of the Unreal years of experience in the consumer
Engine. digital space
● Known as a video game programmer, ● Previously served as the chief digital
businessman and conservationist office at Nike responsible for the digital
● Created Unreal Engine in 2015 and products, experiences, services and
platforms transforming retail for the
Fortnite Battle Royal in September of
word's leading sports brand.
2017.
● BA from Harvard University and MBA
from Harvard Business School
Business Overview
Epic's strategy prioritizes global adoption of developer tools over short-term monetization for building the
next iteration of the Internet (Multiverse/Metaverse/3D internet) with interoperability and persistent user
identity. Epic Games distributes interoperable systems to global developers after testing and
building/buying them. These core building blocks include 4 major business units:

Publishing

Unreal Engine Epic Online Services Epic Games Store Epic Games Publishing

Epic Games aims to bind the offline world to digital experiences, with potential trillions in the "Internext"
market.
Fortnite
Fortnite Battle Royale
● A popular player vs player video game where 100 contestants fight for
control of an island.
● Fortnite has 350+ million accounts and 2.5 billion friend connections
● Fortnite reached a high of 81 million monthly active users in May 2020
● It runs on Epic's Unreal Engine
Fortnite Party Royale
● A non-competitive, social mode for relaxing, expressing, and enjoying
performances and games with friends.
● Launched in May 2021 with a mini festival by Dillon Francis, Steve
Aoki, and deadmau5.
Fortnite Creative Mode
● Allows non-technical players to design their own games, experiences,
and economies.
● It is popular with 57+ million monthly active users and 36% of all time
spent in Fortnite.
● Over 103 million users have published 500 million unique islands, with
78% of time spent in CM on another player's island.
EOS + EGS + EGP
Publishing

Epic Online Services (EOS) Epic Games Store (EGS) Epic Games Publishing (EGP)
● A free SDK of cross-platform ● A digital storefront that competes with ● Offers financing for game developers
services that make it easier and Steam. Launched due to frustration with ● EGP provides production, marketing, and
faster for developers to successfully platform costs. distribution capital, giving developers a
launch, operate, and scale ● Offers more favorable revenue splits to 50/50 profit split while maintaining 100%
high-quality games. publishers than Steam. creative control and IP rights.
● Epic Online Services will work ● Aiming to position Epic as better partner ● EGP is a cost-effective platform for Epic to
across any engine, any store, and to developers, particularly UE users. collaborate with independent developers
are designed to be integrated with and expand its research and development
any major platform. With a single efforts.
SDK, developers can easily access
any of the services offered by Epic.
Unreal Engine

Unreal Engine
● Is a game engine framework for creating video
games.
● It includes game logic, a rendering engine, audio
engine, physics engine, and AI.
● UE is the foundation of Epic Games' creations
and used by top game titles and Hollywood
films, including "The Mandalorian".
● UE is now expanding to serve industries such as
architecture, manufacturing, training, and
simulation.
● While UE's value hasn't been priced, its
competitor Unity was recently valued at $25Bn.
Epic Games Revenue
Gaming Spend
Annual spending on gaming has consistently
risen year after year and is projected to keep
growing at a robust rate, even with the 34%
increase in 2020 due to Covid lockdowns. The
forecast predicts a CAGR of 10% for the period
of 2020-2025.

Two key industry trends:

● The increased adoption of cross-platform
play
● Gaming becoming a channel for social
connection

The business model benefits from the synergy

and complementarity of these two trends: Unreal
supports all consoles and platforms, making
game deployment more democratic, and Epic
makes it easy for developers to create gaming
content at no upfront cost.
The TAM is growing

● Epic Games has growth potential by branching out into new industries such as architecture, construction,
automotive, film, and retail, which could increase its total addressable market (TAM) by over 100%.
● In the long term, Epic Games' revenue is predicted to come from a balanced split between gaming and
non-gaming sources, suggesting significant growth in the new verticals in the next 5-10 years.
New Markets and Adoption Which rendering engine(s) do you currently
Architecture, Engineering, Construction use in production?

Epic Games aims to penetrate the massive AEC (Architecture,

Engineering, and Construction) market, which has a total
estimated market size of $31 billion and over 31 million
professionals.

They plan to expand Unreal Engine's capabilities by

incorporating more standard data formats and functionalities
commonly used in AEC, moving beyond just being a Which rendering engine(s) are you currently
visualization and display engine. With Unreal Engine, Epic aims testing or experimenting with?
to enable in-situ, unencumbered design at a city scale, rendered
in real time, leveraging the engine's ability to display billions of
polygons and render in real time.

Adoption
● 11M UE4 downloads
● Over 500k+ Twinmotion registrations (acq. By Epic in
2019)
New Markets and Adoption (Cont.)
Film & Automotive

We believe that Epic Games will continue to make inroads in the

film and automotive market. Its Unreal engine is quickly gaining
traction in the film industry, as demonstrated by its use in the
making of The Mandalorian, the first live-action Star Wars series.
The crew filmed on location in Iceland and Chile, but thanks to
Unreal, the scenes were integrated into virtual sets and produced
in the convenience of Manhattan Beach Studios in California.

The Unreal engine is also becoming a favorite among major car

manufacturers in the automotive industry. Most of these
manufacturers prefer Unreal due to its strong visualization
capabilities and user-friendly workflow. This was evident in our
discussions with various manufacturers.