New revenue model, what it means for EPIC Games IPO ?
EPIC Games, the makers of the popular game Fortnite and the game engine Unreal Engine have announced the introduction of Creator Economy 2.0.
A new system will pay off 40% of Fortnite's net revenues to creators based on how much players engage with their islands.
This move is estimated to be worth around $400 million per year.
This is a significant development for gaming and the broader creator economy. Epic Games has long been known for its commitment to supporting creators, and this new system takes that support to the next level. Under the new system, third-party creators can develop content within Fortnite and receive a share of the revenue based on how much players engage with their creations.
This is a huge difference from the previous system, where creators would only receive 5% of user purchases from the Epic Store and user inputs. The old system required a unique creative code, which complicated Fortnite content creation for many creators. As a result, many creative studios had to rely on brand deals for income, building virtual worlds to advertise brands like Verizon and Chipotle.
The new Creator Economy 2.0 is set to change all that. By paying off a significant portion of Fortnite's net revenues to creators, Epic Games incentivizes creators to create the best possible content for the game. This will help drive incremental revenue for creators who can create engaging worlds within Fortnite.
Epic Games has struggled in the secondary market over the past year. The company is down 59% over the last year, and its last primary funding round was in April 2022, with a valuation of $31.5 billion. This move to support creators could be seen as a way to help drive interest in the game and the company.
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Epic Games' introduction of Creator Economy 2.0 and the estimated $400 million in revenue creators generate each year are positive developments that could potentially impact the company's IPO in the future. This could make the company more attractive to potential investors.
Overall, the introduction of Creator Economy 2.0 is a positive development for creators and players. It provides a new incentive by sharing revenue with creators based on player engagement while providing players with new and exciting worlds to explore. This move is expected to improve Epic Games' financial performance.
We believe this is a good step toward growth and profitability, bringing the EPIC Games IPO closer.
Who owns Epic Games
Epic Games, founded in 1991 by Tim Sweeney, is a leading video game and software developer headquartered in Cary, North Carolina. Known for its Unreal Engine technology, Epic has revolutionized game development with powerful tools for creators. The company is also recognized for popular titles like Fortnite, which have significantly influenced the gaming industry and culture. Epic Games continues to innovate, expanding its ecosystem through the Epic Games Store and fostering a strong community of developers and players worldwide.
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