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Epic Games, the creator of Fortnite, banked a $3 billion profit in 2018

Epic Games had as good a year in 2018 as any company in tech. Fortnite became the worlds most popular game, growing the companys valuation to $15 billion but it has helped the company pile up cash, too. Epic grossed a $3 billion profit for this year fuelled by the continued success of Fortnite, a source with knowledge of the business told TechCrunch.
Epic did not respond to a request for comment.
Fortnite, which is free to play but makes money selling digital items, has popularized the battle royale category think Lord of the Flies meets Hunger Games almost single-handedly and it has been the standout title for the U.S-based game publisher.
Epic, which was founded way back in 1991,hasnt given revenue figuresfor its smash hit which has 125 million players but this new profit milestone, combined with other pieces of data, gives an idea of the success that the company is seeing as a result of aprescient change in strategy made six years ago.
This past September, Epic commanded a valuation of nearly $15 billion, according to the Wall Street Journal, as marquee investors like KKR, Kleiner Perkins and Lightspeed piled in on a $1.25 billion round to grab a slice of the red-hot development firm. However, the investment cards havent always been stacked in Epics favor.
Chinas Tencent, the maker of blockbuster chat app WeChat and a prolific games firm in its own right, became the first outside investor in Epics business back in 2012 when it injected $330 millionin exchange for a 40 percent stake in the business.
Back then, Epic was best known forUnreal Engine, the third-party development platform that it still operates today, and top-selling titles likeGears of War.
Why would a proven company give up such a huge slice of its business? Executives believed that Epic, as it was, was living on borrow time. They sensed a change in the way games were headed based on diminishing returns and growing budgets for console games, the increase of live games likeLeague of Legends and the emerging role ofsmartphones.
Speaking to Polygon about the Tencent deal, Epic CEO Tim Sweeney explained that the investment money from Tencent allowed the company to go down the route of freemium games rather than big box titles. Thats a strategy Sweeneycalled Epic 4.0.
We realized that the business really needed to change its approach quite significantly. We were seeing some of the best games in the industry being built and operated as live games over time rather than big retail releases. We recognized that the ideal role for Epic in the industry is to drive that, and so we began the transition of being a fairly narrow console developer focused on Xbox to being a multi-platform game developer and self publisher, and indie on a larger scale, he explained.
Tencent, Sweeney added, has provided an enormous amount of useful advice while the capital enabled Epic to make this huge leap without the immediate of fear of money.
Epic Games, the creator of Fortnite, banked a $3 billion profit in 2018
LOS ANGELES, CA JUNE 12: Gamers Ninja (L) and Marshmello compete in the Epic Games Fortnite E3 Tournament at the Banc of California Stadium on June 12, 2018 in Los Angeles, California. (Photo by Christian Petersen/Getty Images)
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