Epic Games
Epic Games, Inc. is an American video game and software developer and publisher based in Cary, North Carolina. The company was founded by Tim Sweeney as Potomac Computer Systems in 1991, originally located in his parents' house in Potomac, Maryland. Following its first commercial video game release, ZZT, the company became Epic MegaGames, Inc. in early 1992 and brought on Mark Rein, who has been its vice president since. After moving the headquarters to Cary in 1999, the studio changed its name to Epic Games.
Epic Games developed Unreal Engine, a commercially available game engine which also powers its internally developed video games like Fortnite and the Unreal, Gears of War, and Infinity Blade series. In 2014, Unreal Engine was named the "most successful videogame engine" by Guinness World Records. Epic Games owns the game developers Psyonix, Mediatonic, and Harmonix, and operates studios in multiple locations around the world. While Sweeney remains the controlling shareholder, Tencent acquired a 48.4% outstanding stake, equating to 40% of total Epic, in the company in 2012, as part of an agreement aimed at moving Epic towards a games as a service model. Following the release of the popular Fortnite Battle Royale in 2017, the company gained additional investments that enabled it to expand its Unreal Engine offerings, establish esports events around Fortnite, and launch the Epic Games Store. As of April 2022, the company has a equity valuation.
History
Potomac Computer Systems (1991–1992)
Potomac Computer Systems was founded by Tim Sweeney in 1991. At the time, Sweeney was studying mechanical engineering and living in a dorm at the University of Maryland. He frequently visited his parents, who lived in nearby Potomac, Maryland, where his personal computer, used for both work and leisure, was situated. Out of this location, Sweeney started Potomac Computer Systems as a computer consulting business but later figured that it would be too much work he would have to put into keeping the business stable, and scrapped the idea.After finishing his game ZZT, Sweeney opted to re-use the Potomac Computer Systems name to release the game to the public in January 1991. It was only with the unexpected success of ZZT, caused in most part by the easy modifiability of the game using Sweeney's custom ZZT-oop programming language, that made Sweeney consider turning Potomac Computer Systems into a video game company. ZZT was sold through bulletin board systems, while all orders were fulfilled by Sweeney's father, Paul Sweeney. The game sold several thousand copies as of May 2009, and Paul Sweeney still lived at the former Potomac Computer Systems address at the time, fulfilling all orders that eventually came by mail. The final copy of ZZT was shipped by Paul Sweeney in November 2013.
Epic MegaGames (1992–1999)
In early 1992, Sweeney found himself and his new-found video game company in a business where larger studios, such as Apogee Software and id Software, were dominant, and he had to find a more serious name for his. As such, Sweeney came up with "Epic MegaGames", a name which incorporated "Epic" and "Mega" to make it sound like it represented a fairly large company, although he was its only employee. Sweeney soon underwent searching for a business partner, and eventually caught up with Mark Rein, who previously quit his job at id Software and moved to Toronto, Ontario. Rein worked remotely from Toronto, and primarily handled sales, marketing and publishing deals; business development that Sweeney found to have significantly contributed to the company's growth. Some time this season, the company soon had 20 employees consisting of programmers, artists, designers and composers. Among them was the 17-year old Cliff Bleszinski, who joined the company after submitting his game Dare to Dream to Sweeney. The following year, they had over 30 employees.In 1996, Epic MegaGames produced a shareware isometric shooter called Fire Fight, developed by Polish studio Chaos Works. It was published by Electronic Arts. By 1997, Epic MegaGames had 50 people working for them worldwide. In 1998, Epic MegaGames released Unreal, a 3D first-person shooter co-developed with Digital Extremes, which expanded into a series of Unreal games. The company also began to license the core technology, the Unreal Engine, to other game developers.
Epic Games (1999–present)
''Unreal'' and personal computer games (1999–2006)
In February 1999, Epic MegaGames announced that they had moved their headquarters to a new location in Cary, North Carolina, and would henceforth be known as simply Epic Games. Rein explained that "Unreal was first created by developers who were scattered across the world, eventually, the team came together to finish the game and that's when the real magic started. The move to North Carolina centralizes Epic, bringing all of the company's talented developers under one roof." Furthermore, Sweeney stated that the "Mega" part of the name was dropped because they no longer wanted to pretend to be a big company, as was the original intention of the name when it was a one-man team. The follow-up game, Unreal Tournament, shipped to critical acclaim the same year, at which point the studio had 13 employees.The company launched the Make Something Unreal competition in 2004, aiming to reward video game developers who create mods using the Unreal game engine. Tripwire Interactive won US$80,000 in cash and computer hardware prizes over the course of the contest in the first contest in 2004.
''Gears of War'' and console games (2006–2012)
Around 2006, the personal computer video game market was struggling with copyright infringement in the form of software piracy, and it became difficult to make single-player games, elements that had been part of Epic's business model to that point. The company decided to shift focus into developing console systems, a move which Sweeney called the start of the third major iteration of the company, "Epic 3.0". In 2006, Epic released the Xbox 360 shooter Gears of War, which became a commercial success for the company, grossing about off a budget. A year later, the company released Unreal Tournament 3 for PC and acquired a majority share in People Can Fly.In 2008, Epic Games released Gears of War 2, selling over three million copies within the first month of its release.
Epic Games released Epic Citadel on September 1, 2010 as a tech demo to demonstrate the Unreal Engine 3 running on Apple iOS, within Adobe Flash Player Stage3D and using HTML5 WebGL technologies. It was also released for Android on January 29, 2013. Epic Games worked on an iOS game, Infinity Blade, which was released on December 9, 2010. The third game in the series, Gears of War 3, came out in 2011.
In 2011, Epic's subsidiary Titan Studios was dissolved. At the 2011 Spike Video Game Awards, Epic Games announced their new game Fortnite. In March 2012, Epic Games China became independent from Epic as Ying Pei Games, developing Mercenary Ops at the time, while Epic still retained a minority stake.
In June 2012, Epic announced that it was opening up a new studio, Epic Baltimore, made up of members of 38 Studios' Big Huge Games. Epic Baltimore was renamed to Impossible Studios in August 2012. However, the studio ended up closing its doors in February 2013.
Epic fully acquired People Can Fly in August 2012, rebranding them as Epic Games Poland in November 2013 as they began work on Fortnite alongside Epic. Epic alongside People Can Fly made one last game in the Gears of War series that served as a prequel to the other games, Gears of War: Judgement, which was released in 2013. At this point, Epic had considered developing a fourth main title for Gears of War, but estimated that its budget would be at least. Additionally, they had suggested the idea of a multiplayer-only version of Gears of War that featured improved versions of maps based on user feedback, similar to the concept behind Unreal Tournament, but Microsoft rejected this idea. Epic recognized the troubles of being held to the business objectives of a publisher and began to shift the company again.
Games as a service and Tencent shareholding (2012–2018)
Coupled with their desire to move away from being beholden to a publisher, Epic Games observed that the video game industry was shifting to a games-as-a-service model. Sweeney stated, "There was an increasing realization that the old model wasn't working anymore and that the new model was looking increasingly like the way to go." In an attempt to gain more GaaS experience, they made an agreement with Chinese Tencent, who had several games under their banner operating successfully as games as a service. In exchange for Tencent's help, Tencent acquired approximately 48.4% of Epic then issued share capital, equating to 40% of total Epic – inclusive of both stock and employee stock options, for $330 million in June 2012. Tencent Holdings has the right to nominate directors to the board of Epic Games and thus counts as an associate of the Group. However, Sweeney stated that Tencent otherwise has very little control on the creative output of Epic Games. Sweeney considered the partial acquisition by Tencent as the start of "Epic 4.0", the fourth major iteration of the company, allowing the company to be more agile in the video game marketplace.Around this point, Epic had about 200 employees. A number of high-profile staff left the company months after the Tencent deal was announced for various reasons. Some notable departures included:
- Cliff Bleszinski, then the design director, announced he was leaving Epic Games in October 2012 after 20 years with the company. His official reason was "It's time for a much-needed break". Bleszinski later stated that he had become "jaded" about the gaming industry in the lead-up to Tencent's involvement. After Tencent's investment, Bleszinski attempted to renegotiate his contract but failed to come to terms, making him think about retirement instead. He opted to stop coming to work, spending his time at his beach house, eventually leading Sweeney to come down and have a heart-to-heart discussion with Bleszinski on the new direction Epic was going, and asking him to make a firm decision regarding his commitment to Epic. Bleszinski opted to write his resignation letter the next day. After about two years, Bleszinski started Boss Key Productions in 2014.
- President Mike Capps announced his retirement in December 2012, and cited as reasons the birth of a baby boy he was having with his wife and his plans to be a stay-at-home dad. He subsequently announced quitting his advisory role as well as his affiliation with the company in March 2013.
- Rod Fergusson, who had been a lead developer for the Gears of War series, left Epic in August 2012. Fergusson stated that he had seen the direction that the Tencent acquisition would have taken the company, and was not interested in the free-to-play style of games but instead wanted to continue developing a "AAA, big-narrative, big-story, big-impact game". Fergusson briefly joined Irrational Games, owned by 2K Games, to help complete BioShock Infinite. While there, Fergusson talked with 2K about potentially continuing the Gears of War series, leading to talks between 2K Games, Epic, and Microsoft. As a result, Microsoft acquired the rights to Gears of War on January 27, 2014, eventually assigned those to Microsoft Game Studios; Fergusson moved to Black Tusk Studios, owned by Microsoft Game Studios, to take on lead development for a new Gears title, with the studio being rebranded as The Coalition. The first game since the acquisition, Gears of War 4, was released in October 2016.
- Adrian Chmielarz, the founder of People Can Fly, who joined Epic when his studio was acquired earlier in 2012, decided to leave after Tencent's acquisition, stating that he and other former People Can Fly members did not believe the free-to-play games as a service direction fit their own personal vision or direction they wanted to go. Chmielarz and these others left Epic in late 2012 to form The Astronauts.
- Lee Perry, a lead designer on both Unreal and Gears of War series, felt that Epic has started to grow too large to maintain a role as an eccentric game developer. Coupled with the studio's need for more management to support the games as a service model, Perry felt that their creative freedom would become limited. He and five other senior people left Epic to form a new studio, Bitmonster.
The investment infusion from Tencent allowed Epic Games to relicense the Unreal Engine 4 engine in March 2015 to be free for all users to develop with, with Epic taking 5% royalties on games developed with the engine.
In June 2015, Epic agreed to allow Epic Games Poland's departure from the company and sold its shares in the studio; the studio reverted to their former name, People Can Fly. The Bulletstorm IP was retained by People Can Fly who has since launched a remastered version called Bulletstorm: Full Clip Edition on April 7, 2017, published by Gearbox Software.