StudyMoose App
24/7 writing help on your phone
Save to my list
Remove from my list
Epic Games is a video game creator that has made a fortune with games like Gears of War, Shadow Complex, Infinity Blade series but is well known for the number one selling game Fortnite. Fortnite is taking Epic Games to new heights, with a recent valuation revealing the company is worth up to $8 billion (Batchelor, 2018). Epic games were founded in 1991 and have produced numerous games, way too many to list in this paper. Of course, they are not the innovator of video games but with the combination of games and profits reaching record numbers, they are reaching to be the king of the industry.
Epic Games is a global business and conduct business in several different countries with large populations. North Carolina is where they have established their headquarters, but they have offices in Seattle and Maryland. They have several subsidiary offices located in Berlin, Japan, Korea, Stockholm, and the UK (). The demand for their products varies depending on what country a game is marketed towards.
4.7 (348)
“ Amazing as always, gave her a week to finish a big assignment and came through way ahead of time. ”
For the majority of the marketplace, video games are a normal good. This means that when consumers’ income increases, so do the demand for the product. The main users of video games do so as a hobby or as a way to pass the time, although there is a niche market that plays video games professionally. Whether we are discussing serious gamers or the average consumer, the market is always changing.
The video game market has several factors that affect the overall demand.
The prices of newly released games are $60 on average (). Consumers have come to expect this and are prepared to pay the price. They may also choose to wait a few weeks until the price goes down, as most games do as the hype decreases. That's why an important factor in Epic Game’s demand curve is the taste patterns of consumers. If they can produce a game that captures the current tastes of the market, they will receive higher demand for that product.
One of the more important factors is the price of related goods and services. Many games now include in-game purchases that can help gamers receive extra benefits. This provides video game companies with an extra revenue stream that is active well after the purchase of the game. The price of video game consoles also affects the demand for games. That also allows video game companies to form partnerships with gaming console manufacturers. They can create bundled offers that help increase demand for both the game and the console.
The estimated demand curve is as follows: Qd= a + bP + cM - DPR + eT
Salaries range from 45,000 to 135,000 with approximately 700 employees. They are ranked highly in terms of competitive salaries and benefits packages. They value their employees and are willing to pay higher labor costs to develop highly valued games and software. The wages paid to employees fall into the area of variable costs. When Game development and formulation are happening, more labor is required. After a game is released, labor is shifted to those who work in quality control and customer service. This drops labor costs and reduces overall total costs.
Because Epic Games is a private company finding accurate financials is a challenge.
Revenues in the gaming industry are based on two major sources, namely hardware, such as consoles, processors, screens, controllers, and other accessories, and the actual games. While video game industry revenues show that PC and console gaming remains strong, sources predict that by the end of 2020 mobile gaming app revenue will reach 74.6 billion U.S. dollars worldwide, which is double the amount reported in 2015. As with nearly all things gaming, China is a leader in the mobile gaming market as well. With revenues reaching 6.18 billion U.S. dollars, Japan is the second largest mobile gaming market in the world, and South Korea takes the fourth spot in the ranking, behind the United States. As is evident from three out of the five largest markets being located in Asia, the region is perceived as the strongest in terms of growth and opportunities. The global video games market is expected to flourish growing to an increasing number of consumers looking for the interactive digital gaming world as a source of entertainment. The increasing use of video games on TV and personal computers is expected to contribute to market augmentation. A growing number of free video games may drive market growth over the forecast period. A growing number of adults playing video games as a source of entertainment is further expected to fuel market expansion. Developments in the user interface of smartphones, laptops, and personal computers are expected to favor market development over the next few years. This is essential to understand because this shows the potential shift in consumer behavior in terms of what they are looking for in their entertainment.
Additionally, video games such as strategic, racing and pursuit, mission, mind games, social gaming, and team gaming are contributing significantly to market expansion. According to Grandview Research, social networking sites such as Facebook have been crucial in promoting video games over the Internet. Increasing consumer disposable incomes and standards of living are also enhancing the video game market. Growing awareness among parents related to the educative use of video games is anticipated to fuel market growth. Further, video games are increasingly proving effective in developing various qualities such as strategic planning and team building. Video games also enhance creativity in children.
Epic Games is mostly known for video games like Fortnite, Robo Recall, and the Gears of Wars series. Fortnite Save the World, which you have to pay money to play, and the free Fortnite, Battle Royale which is the most popular one that more than 40 million people have downloaded. It does, however, contain in-game purchases to buy outfits, weapons, and other helpful items. The goal of Fortnite is to stay alive, playing as an individual or as part of a team with people across the globe to ward off other players, build forts and survive to be the last alive. Epic Games is mostly known throughout the video game industry and is looking to expand its consumer base by expanding on Fortnite and providing a wide variety of games.
As technology expands so will video content, products, virtual reality, special events, and video game tournaments. These are just some of the ways the industry is turning into a “recurring revenue model” and capitalizing on increased demand.
This is important to understand because Epic Games is essentially using Fortnite to revolutionize the way people are playing video games. Being that Fortnite is a free-to-play game, more people are inclined to try the game out. Adding incentives like a battle pass, which includes different, unlockable skins and animations, Epic Games can generate 2 billion dollars this year alone. This is considerably larger than the $825 million Epic was valued at when Tencent purchased its 40 percent stake back in 2012.
The Success and Reputation of Epic Games. (2022, Aug 21). Retrieved from https://studymoose.com/epic-games-essay
👋 Hi! I’m your smart assistant Amy!
Don’t know where to start? Type your requirements and I’ll connect you to an academic expert within 3 minutes.
get help with your assignment
