An EPIC story: Learn how this programmer created a billion-dollar gaming company that makes and distributes games!

Monday: MicroBusiness and Marketing Marvels FROM THE DESK OF MILES EVERSON: Happy Monday, everyone! We hope all is well in both your personal life and work life. Let’s start the week by talking about one of our “Marketing Marvels.” Every Monday, we feature outstanding people in the worlds of business and marketing, and highlight their experiences, contributions, and insights. Today, we’ll focus on a video game developer who built a multi-billion dollar business in the early 1990s. To know more about this “Marvel” and what he can teach us about marketing and business, continue reading below. CEO, MBO Partners Chairman of the Advisory Board, The I Institute

An EPIC story: Learn how this programmer created a billion-dollar gaming company that makes and distributes games! Tim Sweeney: Founder and CEO of Epic Games For the past few years, the success of Epic Games, a.k.a. Epic, has been attributed to the popularity of its video game, “Fortnite.” This sentiment only got stronger when a report revealed the company was valued at USD 31.5 billion. While it’s reasonable to credit the gaming firm’s valuation mostly to “Fortnite,” there’s simply more to that than meets the eye. To understand what makes Epic a billion-dollar company, we have to talk about its CEO and founder too: Timothy “Tim” Dean Sweeney! Sweeney is an American business executive and video game developer. He attended the University of Maryland where he studied mechanical engineering for 4 years but was a credit short of graduating. Sweeney had a passion for creating programs for personal computers (PCs) and this led him to start a computer consulting business named Potomac Computer Systems in 1991. However, that venture didn’t take off so he tried out game development instead. Making video games was one of the things Sweeney was fond of doing. In fact, he spent most of his spare time developing his first video game. In 1991, he released “ZZT,” an action-adventure puzzle game launched and published under the name of his first company. The title became popular among players because it allowed them to create custom content for the game. Due to “ZZT’s” success, Sweeney decided to pursue a career in video game development full-time. Subsequently, he renamed his company to Epic MegaGames in 1992 and simplified it to Epic Games in 1999. After the release of his first game, Sweeney went on to create other notable games like “Unreal Tournament” and “Gears of War.” Both saw critical and financial success. Despite the popularity of these games, it was “Fortnite” that catapulted both Sweeney and Epic to the spotlight. The 2017 multiplayer game’s success has contributed a lot to the company’s prosperity. In fact, Epic has become synonymous with “Fortnite” that it has become common to solely attribute the firm’s financial performance to that game. However, the title is just one of the few components that made Sweeney and his company successful. How did Sweeney create and build a billion-dollar gaming firm? Developing a genuine asset that can be used in multiple industries. Sweeney had a knack not only for developing video games but also for programming. With this skill, he and his team at Epic created the “Unreal Engine,” a proprietary software that provides developers with the tools needed to create video games. The “Unreal Engine” has had 5 iterations since its debut in 1998. Additionally, the proprietary software can be used for content creation, broadcast and live event production, training and simulation, and architectural and automotive visualization. With such a dynamic set of features, “Unreal Engine” has seen widespread use in industries other than gaming across the globe. Another factor that contributed to this is the software can be used free of charge. A user will be charged a 5% royalty only if an off-the-shelf product incorporates code from “Unreal Engine” and if that offering exceeds a lifetime gross revenue of USD 1 million. Epic makes money through this proprietary software by offering an enterprise program for it. Creating a digital storefront that’s attractive for both developers and gamers. In 2018, Sweeney announced the launching of the Epic Games Store where both Windows and MacOs users can purchase video games. As part of his strategy, Sweeney came up with a generous revenue sharing model with game studios. In that particular setup, Epic takes a 12% commission on game sales. This allows developers to keep the remaining 88% of revenue. Additionally, Epic doesn’t take a cut of any in-game purchases as long as developers use their own payment system. This scheme made the Epic Games Store a great platform to publish free-to-play games. Sweeney also attracted gamers by providing free games every week. As of 2021, Epic has distributed a total of 749 million games even though it incurred USD 330 million in unrecouped costs. The tactic largely worked as it was reported on March 9, 2023 that the Epic Games Store has over 230 million users. Aside from these strategies, part of what made Sweeney successful is the huge importance he puts on pushing boundaries when it comes to building a business. According to him: “There are two types of risks in business. Everyone focuses on the risk of losing what they've built, because it's so apparent. But there's an even bigger risk: the risk of not building what you're capable of building. This risk is unquantifiable, easy to ignore, and infinite.” Through this principle, not only was Sweeney able to build a business worth billions of dollars, but was also able to create products and offerings that bring so much value to customers across the globe. Remember: You can also emulate Sweeney’s success by always prioritizing the creation of products and offerings that bring lots of value to your target market. If you do that, you’ll be able to build a company that customers actively remember and patronize. Hope you’ve found this week’s insights interesting and helpful.     Stay tuned for next Monday’s Marketing Marvels! It would be quite tough to find someone who hasn’t heard of LEGO these days. Since its establishment in 1932, the company has brought joy to many people’s lives through its inspiring and fun-to-play toys. Learn more about Julia Goldin and LEGO on next week’s Marketing Marvels!