Epic Games is a global leader in video game development, with over 500 million unique players in 2019.
In a world of stagnant development, Esports is attracting the attention of experts. Once offered to the public, this firm has the potential to be one of the most undervalued stocks in history.
Can you buy Epic Games stock? Let's dig to learn more about Epic Games.
What is Epic Games?
Tim Sweeney created Epic Games in 1991. Epic Games is a video game developer located in Cary, North Carolina. It is most known as the inventor of the first-person shooter game Fortnite, which is one of the top ten most popular online games in the world, with over 350 million registered members.
While Fortnite is free to play, the firm earns revenue via in-app purchases (that do not give players an advantage).
The firm has developed over 50 games since its inception and recently purchased the HouseParty smartphone app and many game development tools.
They are the inventors of the Unreal video game franchise, as well as many other video game franchises. Perhaps most notably, they are responsible for the Fortnite series and the Unreal Engine.
Who Is the Owner of Epic Games?
Tom Sweeney, the founder and CEO of Epic Games owns more than half of the firm. Tencent Holdings, a Chinese business, is the second-biggest stakeholder in Epic Games (TCEHY). Tencent, the world's biggest video game company, controls almost 40% of Epic Games.
Epic Games' most recent funding round, which ended in August 2020, garnered $17.3 billion from private investors, demonstrating the company's ability to generate large quantities of money without selling stock.
Epic Games' Brief History
Tim Sweeney founded Potomac Computer Systems in 1991 as a small computer consulting firm. After the success of the first commercial game, ZZT, he quickly shifted his company's business strategy entirely around video games.
Sweeney renamed his firm Epic MegaGames to give the impression of a large organization. It's ironic since he was the only employee at the time. Despite this, Epic MegaGames expanded and employed around 50 workers by 1997. Sweeny chose to delete the "Mega" from Epic MegaGames in 1999, renaming the company Epic Games. Epic made the transition from PC to console gaming in 2006 with the release of Gears of War on the Xbox 360. As a consequence, Epic Games announced the release of further Gears of War games.
Despite its 2011 announcement, the business did not release Fortnite until 2017. The game's release was centered on the games-as-a-service (GaaS) paradigm, which Sweeney believed was the way of the future. Epic Games teamed with Tencent, a Chinese business that has successfully managed games as a service, to obtain further expertise with the concept in return for 48 percent ownership of Epic Games.
This strategy proved successful, as Fortnite Battle Royale surpassed 125 million users in less than a year, boosting the company's capitalization to $4.5 billion as of July 2018.
Epic Games created the Epic Games Store as a competitor to Steam and GOG.com.
The product is video games, which humans have an insatiable need for. People will play games and even pay for them, as history demonstrates.
Games have surpassed music as the world's most popular form of entertainment. In terms of Statista, there will be 2.7 billion gamers globally by 2020. The Asia Pacific is the biggest market of games, with 1.447 billion gamers. Through its cooperation with Tencent Holdings, Epic is well-positioned to access that market.
According to MarketWatch, IDC expects that worldwide video game sales will reach $179.7 billion in 2020. In comparison, the worldwide film business recorded revenue of $100 billion in 2019. IDC expects that global video game sales will increase from $139.8 billion in 2018 to $150.2 billion in 2019.
Gaming is a rapidly growing sector that has the potential to earn tremendous sums of money. All investors looking for profitable and growing equities can choose gaming firms.
Why is Epic Games significant?
Have you tried your hand at Fortnite? Then you're probably aware of why the stock will be a hot commodity once it enters the marketplace. For many adolescent guys, the game has become a cultural phenomenon and a rite of passage. With over 350 million gamers, Fortnite Nation would be greater than the United States if it were its own nation.
The Wall Street Journal published an article regarding Fortnite's addictive nature, noting that parents are engaged in an "unwinnable struggle" to get their children to switch off the game. While the game is free to play, users will quickly acquire V-bucks to purchase in-game personalization items, and Battle Passes to access more features.
These purchases pile up rapidly. According to a 2018 research, 70% of Fortnite players purchase digital things and those who do spend an average of $84.67. According to Nielsen statistics, Fortnite generated $1.8 billion in sales alone in 2019.
Smart observers see that Fortnite is more than a video game; it is a cultural and lifestyle brand with several revenue streams. For instance, musician Travis Scott earned $20 million last year on Fortnite...for a nine-minute digital performance!
However, this is just the beginning! The video game business has a lengthy growth runway. Gaming is no longer seen as a squandering of time. Esports is rapidly maturing as a viable professional option, with a worldwide market worth more than $1 billion and viewership of around 500 million.
For decades to come, the Fortnite world will shape esports and the gaming community, and that's only one brand.
However, it gets better for Epic Games. Regardless matter whose name appears on the title screen, the corporation will profit. Investors that are knowledgeable about Epic Games' Unreal Engine game development technology appreciate its potential. Unreal Engine has swiftly established itself as the de-facto platform for gaming production for publishers such as Microsoft Studios, which collaborates with Epic Games on the Gears of War series.
No, Epic Games is not a publicly traded corporation as of April 2022. It is a private firm. Tim Sweeney, the company's creator and CEO controls more than 50% of Epic Games.
Tencent Holdings (TCEHY), a Chinese conglomerate and the world's biggest video game firm, acquired a 40% interest in Epic Games in 2012. Additionally, early investors, employees, and venture capital companies such as Baillie Gifford, Lightspeed Venture Partners, the Ontario Teachers' Pension Plan Board, Blackrock, David Tepper, KKR, Sony, Smash Ventures, and KIRKBI are stockholders (holding company of The Lego Group). The corporation was valued at $31.5 billion in its most recent investment round (April 2022).
Epic Games has made no public disclosures about its intention to go public in 2022.
At the moment, the only option to invest in Epic Games is via private equity firms that possess a private stake in the business.
For instance, you may purchase stock in the Chinese corporation Tencent Holdings, which owns a significant portion of Epic Games thanks to the company's backing since 2012.
Thus, if you want to profit from the stock value of Epic Games, you might use this method of indirect investment.
This is excellent news for ordinary investors looking for a piece of the action.
The good news is that Epic Games investors are technically Tencent investors.
Additionally, Tencent controls Riot Games, a significant competitor to Epic Games.
When Is Epic Games' Initial Public Offering?
If Epic Games ever conducts an initial public offering (IPO), it will be excellent news for long-term investors.
However, the chance of this game creator going public is remote.
What Is The Stock Symbol For Epic Games?
Epic Games lacks a stock symbol due to the fact that the company is not publicly listed.
Epic Games' stock is sometimes mistaken with Epic Corp (EPOR). However, this is a completely distinct firm.
While an Epic Games ticker may appear in the future, it is unlikely to trade on a stock market anytime soon.
What is Epic Games Stock Price?
Tim Sweeney and other minority investors hold Epic Games privately.
This signifies the firm does not have a stock symbol or a stock price.
Excellent Investment Opportunities in Epic Games
Trading shares of a stock that are not yet publicly traded presents a difficulty. It is conceivable, but you may be ineligible, and the process may not be worth it.
For instance, take a look at Uber stock. Individual investors salivated for years, anticipating the day when it would begin trading publicly. When the company eventually went public, the stock price plummeted. Thus, you would have been better off waiting to purchase the stock than purchasing it prior to the IPO.
There is one indirect method to hold Epic Games stock and three direct ways to buy shares of a pre-IPO stock like Epic Games.
Purchase Tencent Holdings (TCEHY) stock
Without waiting for Epic Games to go public, there is a way to invest in the firm. You may purchase Tencent Holdings ADR stock (TCEHY: OTCMKTS). Tencent went public in Hong Kong in 2004.
Tencent Holdings is a Chinese multinational conglomerate that is often regarded as the world's biggest video game business. Tencent Holdings is listed on the Hang Seng Index with the ticker number SEHK 700.
Riot Games, the company behind League of Legends, is a significant holding for Tencent. According to PCGamer, League of Legends is the most popular personal computer (PC) game in the world.
Additionally, it has stakes in Bluehole, the developer of Fortnite's battle royale competitor PUBG, as well as Activision Blizzard, Ubisoft, and a number of other gaming businesses. Online games accounted for more than a third of the company's revenue last quarter.
Tencent, China's technology juggernaut, continues to expand its revenue. The Internet giant reported a 13% growth in sales for the third quarter of 2020, increasing to over 142 billion yuan in the third quarter of 2021.
Total sales for the Shenzhen-based company climbed 13.5 percent year on year in the July-September quarter to 142.37 billion yuan ($22.27 billion).
The operator of the super-app WeChat boosted its net income by 3% to 39.51 billion yuan, slightly above analysts' estimates.
Purchase Epic Games Stock After it Begins Trading
Due to the sensitivity of obtaining pre-IPO shares, which are often reserved for rich investors (accredited), the most probable method to purchase the stock is to wait patiently for the IPO to close.
Often, investors might enter at a price equal to or less than the IPO price. This is not always the case, though. For example, Beyond Meat's initial public offering skyrocketed and never looked back. However, Uber, which many thought would soar, instead plummeted on the day of its first public offering.
The lesson of this story is that investing substantial effort in acquiring a business prior to its first public offering may not be worthwhile in the long run. Additionally, you may invest time and effort in obtaining shares yet get a minimal allotment. Even if the stock skyrockets, your upside potential may be constrained.
Your greatest chance of owning the stock is to wait for the initial public offering and then acquire it via a no-fee online brokerage account. You may set up the account well in advance of the initial public offering and then execute your first transaction to learn how to acquire stock in a firm.
I suggest beginning with a firm you are familiar with. If you enjoy Walmart, for instance, you may invest in Walmart stock.
Purchase Epic Games Stock in the Initial Public Offering (IPO)
Ambitious investors may position themselves to invest in the Epic Games' initial public offering when it occurs. The majority of ordinary investors will be denied access.
The richest customers at the top investment banks will get initial public offerings (IPOs) in the hottest transactions.
Your prospects of obtaining initial public offering (IPO) shares are contingent upon four factors:
Demand for first public offerings
Your broker and qualification
Your broker's assets are under control.
Proclivity for stock flipping
As demand for first public offerings grows, the likelihood of acquiring IPO shares drops. As a result, the most popular initial public offerings are the most difficult to obtain.
Lower-demand Retail investors who are clients of participating brokers may be allowed to participate in initial public offerings.
Buy Competitors’ Stock of Epic Games
Until Epic Games goes public, you may invest in a few rivals.
Epic Games Competitors You Can Invest In
1. Electronic Arts Inc. (NASDAQ: EA)
EA is another competitor of Epic Games in the battle royale genre. Apart from Apex Legends, EA has long been a publisher of the wildly popular Sims game franchise. Additionally, its game Need for Speed inspired a film based on the franchise.
To compete with Epic Games, EA launched a subscription-based service called EA Play. For a monthly charge, customers may access any game in the EA catalog. Electronic Arts are now valued at around $24 billion. The price per share of the company's stock has been increasing during the past year.
With a slew of successful franchises and the highest-rated battle royale game on the market, it's unsurprising that EA's financial future seems to be bright.
2. Roblox Corp (NYSE: RBLX)
When you think about Roblox, you're undoubtedly thinking of the characters that seem to be constructed entirely of blocks.
Roblox has acquired a lot of momentum in the previous year, despite the fact that the firm has been there since 2004. The unique aspect of Roblox is that it has been wrongly categorized as a game, although it is much more.
Indeed, it isn't even a game! It's a platform that enables people to develop playable video games. Roblox stock may be a fantastic option for Epic Games stock due to its unique character since it fills a gap that other rivals do not.
3. Activision Blizzard, Inc. (NASDAQ: ATVI)
Even if you've never heard of Activision Blizzard, Inc. before reading this article, chances are you've heard of some of its video games.
Activision Blizzard, a big competitor of Epic Games in the battle royale space, is the video game business behind Call of Duty: Warzone, Overwatch, and World of Warcraft, all of which are market leaders in the online gaming industry.
Activision Blizzard, Inc. is valued at around $72 billion. The increase in value is most likely because of the Covid-19 epidemic, which has caused individuals to spend more time inside. This is a good indication of how Epic Games' stock may perform if the firm goes public.
Conclusion
Epic Games, which is fully privately held, has shown a continuous capacity to produce sufficient revenue to sustain expansion over time. Without a firm indication of an impending IPO, pushing or not promoting Epic's stock is almost meaningless. Regardless, we can expect that the company's average stock price will continue to expand in lockstep with the overall gaming industry over the long run.
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