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

Judhajeet Das

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Epic Games had as good a year in 2018 as any company in tech. Fortnite became the world’s most popular game, growing the company’s 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, hasn’t given revenue figures for 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 a prescient 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 haven’t always been stacked in Epic’s favor.

China’s Tencent, the maker of blockbuster chat app WeChat and a prolific games firm in its own right, became the first outside investor in Epic’s business back in 2012 when it injected $330 million in exchange for a 40 percent stake in the business.

Back then, Epic was best known for Unreal Engine, the third-party development platform that it still operates today, and top-selling titles like Gears 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 like League of Legends and the emerging role of smartphones.

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. That’s a strategy Sweeney called “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.”

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)

Epic never had a problem making money — Sweeney told Polygon the first Gear of Wars release grossed $100 million on a $12 million development budget — but with Fortnite the company has redefined modern gaming, both by making true cross-platform experiences possible and by pulling in vast amounts of money.

As a private company, Epic keeps its financials closely guarded. But digging beyond the $3 billion figure — which, to be clear, is annual profit not revenue — there are clues as to just how big a money-spinner Fortnite is. Certainly, there’s room to wonder whether analyst predictions this summer that Fortnite would gross $2 billion this year were too conservative.

The most recent data comes from November when Sensor Tower estimates that iOS users alone were spending $1.23 million per day. That helped the game bank $37 million in the month and take its total earnings within Apple’s iOS platform to more than $385 million.

But, as mentioned, Fortnite is a cross-platform title that supports PlayStation, Xbox, Switch, PC, Mac, Android and iOS. Aggregating revenue cross those platforms isn’t easy, and the only real estimate comes from earlier this year when Super Data Research concluded that the game made $318 million in May across all platforms.

That is, of course, when Fortnite was fresh on iOS, non-existent on Android and with fewer overall players.

We can deduct from Sensor Tower’s November estimate that iOS pulled in $385 million over eight months — between April and November — which is around $48 million per month on average. Android is harder to calculate since Epic skipped Google’s Play Store by distributing its own launcher. While it quickly picked up 15 million Android users within the first month, tracking that spending off-platform is a huge challenge. Some estimates predicted that Google would miss out on around $50 million in lost earnings this year because in-app purchases on Android would not cross its services.

There are a few factors to add further uncertainty.

Fornite spending tends to spike around the release of new seasons — updated versions of the game — since users are encouraged to buy specific packages at the start. The latest, Season 7, dropped early this month with a range of tweaks for the Christmas period. Give the increased velocity that Fortnite is picking up players and the appeal of the festive period, this could have been its biggest revenue generator to date but there’s not yet any indicator of how it performed.

More broadly, Fortnite has undoubtedly lost out on revenue in China, which frozen new game licenses nine months ago thereby preventing any publishers from monetizing new titles over that period.

Tencent, which publishes Fortnite in China, did release the game in the country but it hasn’t been able to draw revenue from it yet. The Chinese government announced last week that it is close to approving its first batch of new titles but it isn’t clear which games are included and when the process will be done.

Already, the effects have been felt.

Games are forecast to generate nearly $40 billion in revenue in China this year, according to market researcher Newzoo. However, the industry saw its slowest growth over the last 10 years as it grew 5.4 percent year-over-year during the first half of 2018, according to a report by Beijing-based research firm GPC and China’s official gaming association CNG.

Fortnite and PUBG — another battle royale title backed by Tencent — have perhaps suffered the most since they are universally popular worldwide but unable to monetize in China. It seems almost certain that those two titles will receive a major marketing push if, as and when they receive the license and, if Epic can keep the game competitive as Sweeney believed it could back in 2012, then it could go on and make even more money in 2019.

Epic Games is taking on Steam with its own digital game store, which includes higher take-home revenue rates for developers.

But Epic isn’t relying solely on Fortnite.

A more lowkey but significant launch this month was the opening of the Epic Game Store which is aimed squarely at Steam, the leader in digital game sales.

While Fortnite is its most prolific release, Epic also makes money from other games, Unreal Engine and a recently launched online game store that rivals Steam. Epic’s big differentiator for the store is that it gives developers 88 percent of their revenue, as opposed to Value — the firm behind Steam — which keeps 30 percent, although it has added varying rates for more successful titles. Customers are promised a free title every two weeks.

Either way, Epic is betting that it can do a lot more than Fortnite which could mean that its profit margin is even higher come this time next year.

Tech Passionate and Heavy Geek! Into Blogging world since 2014 and never looked back since then :) I am also a YouTube Video Producer and a Aspiring Entrepreneur. Founder, MyDroidDoes

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Logitech’s MX Master 3 mouse and MX Keys keyboard should be your setup of choice

Judhajeet Das

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Logitech recently introduced a new mouse and keyboard, the MX Master 3 ($99.99) and MX Keys ($99.99) respectively. Both devices borrow a lot from other, older hardware in Logitech’s lineup – but they build on what the company has gotten really right with input devices, and add some great new features to make these easily the best option out there when it comes to this category of peripherals.

Logitech MX Keys

This new keyboard from Logitech inherits a lot from the company’s previous top-of-the-line keyboard aimed at creatives, the Logitech Craft keyboard. It looks and feels a lot like the premium Craft – minus the dial that Logitech placed at the top of that keyboard, which worked with companion software to offer a variety of different controls for a number of different applications.

The Craft’s dial was always a bit of a curiosity, and while probably extremely useful for certain creative workflows where having a tactile dial control makes a lot of sense (for scrubbing a video timeline during editing, for instance), in general the average user probably isn’t going to need or use it much.

Logitech MX Keys MX Master 3 5The MX Keys doesn’t have the Craft’s dial, and it takes up less space on your desk as a result. It also costs $70 less than the Craft, which is probably something most people would rather have than the unique controller. The MX Keys still have excellent key travel and typing feel, like its bigger sibling, and it also has smart backlighting that turns on automatically when your hand approaches the keys – and which you can adjust or turn off to suit your preference, and extend battery life.

MX Keys has a built-in battery that chargers via USB-C, and provides up to 10 days of use on a full charge when using the backlight, or for up to 5 months if you disable the backlight entirely. For connectivity, you get both Bluetooth and Logitech’s USB receiver, which can also connect to other Logitech devices like the MX Master series of mice.

Logitech MX Keys MX Master 3 3The keyboard can connect to up to three devices at once, with dedicated buttons to switch between them. It supports Windows, Mac, Linux, Android and iOS out of the box, and has multi-marked keys to make it easier to transition between operating systems. Plus, when you’re using the MX Keys in tandem with the MX Master 3 or other Logitech mice that support its Flow software, you can transition seamlessly between computers and even operating systems, for doing things like copying and pasting files.

AT $99.99, the MX Keys feels like an incredible value, since it offers very premium-feeling hardware in an attractive package, with a suite of features that’s hard to match in a keyboard from anyone else – including first-party peripherals from Microsoft and Apple .

Logitech MX Master 3

When it comes to mice, there are few companies that can match Logitech’s reputation or record. The MX Master series in particular has won plenty of fans – and for good reason.

Logitech MX Keys MX Master 3 9The MX Master 3 doesn’t re-invent the wheel – except that it literally does, in the case of the scroll wheel. Logitech has introduced a new school wheel with ‘MagSpeed’ technology, that switches automatically between fluid scrolling and more fine-grained, pixel-precise control. The company claims the new design is 90 percent faster and 87 percent more precise than its previous scroll wheel, which is pretty much an impossible claim to verify through standard use. That said, it does feel like a better overall scrolling experience, and the claim that it’s now ‘ultra quiet’ is easy to confirm.

Logitech has also tweaked the shape of the mouse, with a new silhouette it says is better suited to matching the shape of your palm. That new shape is complimented with a new thumb scroll wheel, which has always been a stellar feature of the Master series and which again, does feel better in actual use though it’s difficult to put your finger on exactly why. Regardless, it feels better than the Master 2S, and that’s all that really matters.

Logitech MX Keys MX Master 3 10In terms of tracking, Logitech’s Darkfield technology is here to provide effective tracking on virtually all surfaces. It tracks at 4,000 DPI, which is industry-leading for accuracy, and you can adjust sensitivity, scroll direction and other features in Logitech’s desktop software. The MX Master 3 also supports up to three devices at once, and works with Flow to copy and past between different operating systems.

One of the most noteworthy changes on the MX Master 3 is that it gains USB-C for charging, replacing Micro USB, which is fantastic news for owners of modern Macs who want to simplify their cable lives and just stick with one standard where possible. Since that matches up with the USB-C used on the MX Keys, that means you can just use one cable for charging both when needed. The MX Master 3 gets up to 70 days on a full charge, and you can gain 3 hours of use from a fully exhausted battery with just one minute of charging.

Logitech MX Keys MX Master 3 7Bottom line

Logitech has long been a leader in keyboard and mice for very good reason, and the company’s ability to iterate on its existing successes with improvements that are smart and make sense is impressive. The MX Keys is probably the best keyboard within its price range that you can get right now – and better than a lot of more premium-priced hardware. The MX Master 3 is without a doubt the only mouse I’d recommend for most people, especially now that it offers USB-C charging alongside its terrific feature set. Combined, they’re a powerful desktop pair for work, creative and general use.

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Volvo unveils its first electric car, the XC40 Recharge

Judhajeet Das

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Volvo Cars introduced Wednesday the XC40 Recharge, its first electric car under a new EV-focused brand that kicks off a company-wide shift toward electrification.

“It’s a car of firsts and it’s a car of the future,” CTO Henrik Green said.

The Volvo XC40 Recharge is the first electric vehicle in the automaker’s portfolio. It’s also the first Volvo to have an infotainment system powered by Google’s Android operating system as well as have the ability to make over-the-air software updates.

This is also the first vehicle under Volvo’s new Recharge brand. Recharge, which was announced this week, will be the overarching name for all chargeable Volvos with a fully electric and plug-in hybrid powertrain, according to the company.

The all-electric vehicle is based off Volvo’s popular XC40 small SUV. However, this is not a retrofit of a gas-powered vehicle.

The XC40 Recharge is equipped with an all-wheel drive powertrain and a 78 kilowatt-hour battery that can travel more than 400 kilometers (248 miles) on a single charge, in accordance with WLTP. The WLTP, or Worldwide Harmonised Light Vehicle Test Procedure, is the European standard to measure energy consumption and emissions, and tends to be more generous than the U.S. EPA estimates. The EPA estimates are not yet available, but it’s likely the XC40 Recharge will hit around the 200-mile range.

That would put the range of the Volvo XC40 Recharge below the Tesla Model 3, Chevy Bolt EV, Kia Niro and Hyundai Kona.

However, Volvo did make a vehicle with impressive horsepower and fast charging capability, which could attract buyers. The vehicle’s electric motor produces the equivalent of 408 horsepower and 442 pound-feet of torque that allows the vehicle to go from zero to 60 mph in 4.8 seconds. The battery charges to 80% of its capacity in 40 minutes on a fast-charger system.

Volvo XC40 Recharge 1

Android-powered infotainment

The infotainment system in the all-electric Volvo XC40 will be powered by an automotive version of Android OS, and, as a result, bring into the car embedded Google services such as Google Assistant, Google Maps and the Google Play Store.

This Android-powered infotainment system is the product of a years-long partnership between the automaker and Google. In 2017, Volvo announced plans to incorporate a version of its Android operating system into its car infotainment systems. A year later, the company said it would embed voice-controlled Google Assistant, Google  Play Store, Google Maps and other Google services into its next-generation Sensus infotainment system.

The Android-powered infotainment system is fully integrated with Volvo On Call, the company’s digital connected services platform. Plug-in hybrid drivers using the Volvo On Call will be able to track how much time they spend driving on electric power.

Volvo XC40 infotainment system

The infotainment system in the Polestar 2, the new vehicle from Volvo’s standalone performance brand, also is powered by Android OS.

Android Automotive OS shouldn’t be confused with Android Auto, which is a secondary interface that lies on top of an operating system. Android Automotive OS is modeled after its open-source mobile operating system that runs on Linux. But instead of running smartphones and tablets, Google modified it so it could be used in cars.

Volvo isn’t the only automaker to partner with Google to bring Android OS into its vehicles. GM began shipping vehicles with Google Android Automotive OS in 2017, starting with the Cadillac CTS and expanding to other brands. GM said in September that Google will provide in-vehicle voice, navigation and other apps in its Buick, Cadillac, Chevrolet and GMC vehicles starting in 2021.

Over-the-air software updates

The electric XC40 is also the first Volvo that will receive software and operating system updates over the air. Over-the-air, or wireless, software updates were popularized by Tesla, which has used the capability to improve its vehicles over time. Tesla has used the OTAs to fix software bugs, roll out new features in its infotainment system and improve performance.

Volvo intends to use OTAs for the operating system and other software inside the vehicle, Green said. Other automakers, with the exception of Tesla, have slowly inched toward OTAs, but have minimized its use, and limited it to the infotainment system.

“So now the XC40 will stay as fresh as your phone or tablet, and no longer will a car’s best day be the day it leaves the factory,” Green said.

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Google Pixel 4, Pixel 4 XL not launching in India

Judhajeet Das

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The Pixel 4 and Pixel XL smartphones that Google just unveiled at a press conference in New York won’t launch in India, one of the company’s key overseas markets, the Android-maker said on Tuesday.

The bottleneck lies in the headline feature Project Soli, a radar-based motion-sensing chip baked into the new Pixel smartphones that relies on using a certain frequency band — 60GHz mmWave. The company failed to secure permission from the local authority in India to use this frequency band, which the nation has yet to open for commercial usage, a person familiar with the matter told TechCrunch. You may remember that in the U.S., the FCC approved the commercial usage of Soli earlier this year.

In a statement, a Google spokesperson said, “Google has a wide range of products that we make available in different regions around the world. We determine availability based on a variety of factors, including local trends, and product features. We decided not to make Pixel 4 available in India. We remain committed to our current Pixel phones and look forward to bringing future Pixel devices to India.”

The radar sensors on the new Pixel smartphones enable support for a number of human interactions, Sabrina Ellis, VP of Product Management at Google, said at the event today. “For instance, Pixel 4 has the fastest secure face unlock on a smartphone, because the process starts before you have even picked up the smartphone,” she claimed. “Motion sense prepares the camera when you reach for your Pixel 4, so you don’t need to tap the screen,” she added.

The radar sensor also enables other applications such as rejecting a call by just gesturing at the phone, Ellis said.

This is the first time Google has had to skip the launch of a phone in India, the second largest smartphone market and where all the Nexus and Pixel smartphones have launched a few days after their global unveiling.

Not launching the new Pixel smartphones won’t really hurt the company… at least financially speaking. The Pixel smartphones have failed to receive any substantial acceptance in the Indian market, especially as their prices increased over the years.

Even as 99% of smartphones shipped in India last year ran the Android mobile operating system, the vast majority of handsets carried a price tag of $200 or lower, research firm Counterpoint told TechCrunch.

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