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Fortnite’s Epic Games Leads Record $5.7 Billion Year for Gaming Investments in 2018

Last Updated September 23, 2020 12:24 PM
Melanie Kramer
Last Updated September 23, 2020 12:24 PM

Game company investments, into market leaders like Epic Games, doubled an already record figure for gaming investments in 2017. Epic Games, developer of Fortnite – the world’s most popular videogame – saw the greatest single investment in 2018 of $1.25 billion.

Epic Games $1.25 Billion Funding Round is the Largest non-IPO Gaming Investment Ever

A first-quarter 2019 report from Digi-Capital, as reported  by VentureBeat confirmed the latest industry statistics, originally compiled  by USC grad student Khaled Shaalan . Gaming investments reached $5.7 billion in 2018. Double the record figure for 2017.

Epic Games, riding on the global success of online-game Fortnite, led by raising $1.25 billion from investors. Epic’s huge injection is not only the largest non-IPO gaming investment it is the second-largest amount raised by a gaming company ever.

South Korea’s Netmarble Games  raised $2.3 billion in its IPO in 2017. The mobile game maker’s public listing was the country’s second-largest ever.

Top 2018 Gaming Investments Source: DigiCapital

Digi-Capital  statistics revealed that 11 other companies raised more than $100 million each. The largest gaming investments were in mobile and games technology and in streaming. With multiplayer online games like Fortnite and League of Legends featuring strongly. Multiplayer online games are the basis for the fast-growing eSports industry.

Global Gaming Market Worth $115 Billion

The entire video game market is expected to reach a value of $115 billion  in 2018. The eSports market is forecasted to reach a value of $906 million in 2018. Rising quickly to a market value of $1.65 billion  by 2021, as per Statista.

By October 2018 Epic Games had reached its own value of $15 billion . This after the massive cash injection and the success of Fortnite. By the same point in time, Fortnite had seen 125 million players globally.

Tencent Backed Four Out of Five Top Deals

China’s Tencent not only backed Fortnite’s Epic Games but also Douyu, Shanda Games, and Huya. Goldman Sachs led funding for Voodoo to the tune of $200 million. Tencent owns 40%  of Epic Games and 25%  of NetMarble. It also owns stakes in Tesla, Snap, and Activision Blizzard.

Tencent, however, is still missing a huge market opportunity for Epic Games in its home country of China. Despite the Chinese government beginning to up the pace of game licenses again, it has yet to grant a license for Tencent to earn revenue from Fortnite in China, the biggest gaming country in the world.

Tencent Share Performance in the Last Year Source: TradingView

Digi-Capital also reports $22 billion worth of game company mergers and acquisitions in 2018. The second biggest year for M&A in the industry on record. Tencent also acquired an over $2 billion stake in Ubisoft via its Vivendi deal.

The thriving industry, over 2.5 billion  gamers, and resounding successes like Epic Games and Fortnite are inspiring gaming investment. Not just investments but market moves by other technology players like Tencent. Apple, according to news this week, is ready to create its own gaming subscription service.