Tim Sweeney created the global phenomenon Fortnite and gave it away for free. That turned out to be a brilliant strategy that has made him a billionaire. Video games are big business and the popularity of Fortnite isn’t too surprising, but its revenues are. Between the release of the current version of the game in September and the end of May, Fortnite made more than $1.2 billion. As of early June, the game has been played by 125 million people. All that game play has made Epic Games, the company Sweeney founded 27 years ago in his parents’ basement, on track to generate $2 billion this year. That revenue makes the North Carolina based company worth $5 billion to $8 billion. Sweeney is the controlling shareholder in the company.
Fortnite is played obsessively by kids, athletes, rappers, and pretty much everyone at this point. It is a cartoonish fight to the death battle where players beat up on one another as they try to survive on a shrinking, storm ravaged island. Drake is a fan. The L.A. Lakers’ Josh Hart is a fan. Instead of charging $40 or more for the game, players buy online V-bucks, a virtual currency. Players then use the V-bucks to buy skins, special missions, or celebratory dances that cost up to $20 each. Many of Fortnite’s accessories are only available on a limited basis, which makes players buy them before they disappear. All of that action contributes to some of the highest rates of revenue per user in the gaming industry. The valuation for Epic Games has risen enormously as Fortnite has become successful.
That valuation could create a windfall for 47-year-old Tim Sweeney and Tencent Holdings, which bought 40% of Epic Games in 2012 at a valuation of $825 million.
Prior to Fortnite, Epic Games’ biggest hit was the Xbox 360 game Gears of War. Epic also owns Unreal Engine, a widely used operating system for building games. Sweeney lets developers use the product for free and collects royalties on the sales of games made using his software.
Most video games experience peak popularity in the time immediately after it is released. Fortnite is still drawing millions of new users a year after it launched. The game sets itself apart from other battle royale style games by being innocently mischievous rather than graphically violent. The game is social and easy to play. It is also hard to master, keeping players coming back to try again and again.
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