[disishhsha]

$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.

[ethbro]

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.

[disishhsha]

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.

[nikanj]

”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.

[Mikeb85]

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.

[rchaud]

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.

[tonyedgecombe]

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

[baby]

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

[golergka]

You forgot about Unreal engine?

[disishhsha]

Presumably the $3B already includes that revenue.