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$3B profit doesn’t really seem consistent with $15B valuation. Tech companies these days seem valued at 20x revenue or more. Why would they bother raising $1.25B at that price?

I suppose Fortnite is a fad, so there is a pessimistic case to be made to cash in as much as possible.



The impression I get is that the video game industry is extremely hit / miss.

Hence the large graveyard of publishers and developers who at one time made excellent, well-selling games. (E.g. Interplay Games)

Money comes cheaply at times of hits. Money comes much more expensively at times of misses. So it behooves Epic to build up a war chest if they can.


It does speak to a pretty conservative mindset - when you just made $3B cash free and clear, selling some of that golden goose for $1.25B.


”Tech companies” is a wide umbarella. An enterprise-oriented SaaS can justify a high multiplier like that, because their churn rate is low. Video games are a much more volatile business, and the valuation multiplier reflects that.


Growing tech companies are valued at 20x revenue. Mature companies aren't. Epic was in trouble and managed one hit, that revenue isn't guaranteed to last, hence the conservative valuation.


The $3B figure is an estimate. Techcrunch doesn't have the real numbers. That would explain why they don't compare the $3B to Epic's 2017 numbers; because they don't have those either.


The gaming market is fickle, next year we will be talking about something else.


if Fortnite is a fad, is the moba genre a fad as well? Because LoL and Dota2 seem to still be going strong.


You forgot about Unreal engine?


Presumably the $3B already includes that revenue.




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