Epic Games

Epic Games was founded in 1991 by Tim Sweeney. Sweeney recalled that he originally named the business Potomac Computer Systems because he intended to do computer consulting; he began writing the game ZZT in 1990 and released it as shareware in early 1991.⁠[1][2]

Sweeney recalled that as shareware sales grew he came up with the name “Epic MegaGames” around 1992 to make the company look bigger; Mark Rein joined in 1992, and Cliff Bleszinski began working with the company around the same time.⁠[2]

On May 22, 1998, the shooter Unreal, developed by Epic MegaGames and Digital Extremes and published by GT Interactive, was released; Unreal Engine, created for the game, later grew into the company’s core technology product. Sweeney said development of Unreal began around 1994 and that the team gathered in Waterloo, Canada, for a year to finish the game.⁠[3][2]

Sweeney recalled that after looking all over the country the company decided on Raleigh and moved there in 1998; he also said that once the company became successful after Unreal, it dropped the “Mega” from its name. The company moved its headquarters to Cary, North Carolina, in 1999, where it remains.⁠[2][4][1]

On November 7, 2006, Epic released the third-person shooter Gears of War on Xbox 360, developed by a team including Cliff Bleszinski.⁠[5]

In 2012, Tencent paid US$330 million for 48.4% of Epic Games’ issued share capital, about 40% of total capital, gaining the right to nominate directors; Sweeney said two Tencent representatives joined Epic’s board. By 2021 a court found that Tencent owned about 37% of Epic with two board seats.⁠[6][7]

On January 27, 2014, Microsoft Studios announced it had acquired the rights to the Gears of War franchise from Epic Games; the series had sold over 22 million units worldwide, development moved to Black Tusk Studios in Vancouver, and Rod Fergusson, Epic’s former director of production on the franchise, joined MicrosoftMicrosoftMicrosoft is a technology company founded by Bill Gates and Paul Allen in 1975 and headquartered in Redmond, Washington, with businesses spanning Windows, Microsoft 365, Azure, enterprise software, artificial intelligence, gaming and devices.Open the full entry.⁠[8]

In early 2014, Epic made Unreal Engine 4 available to everyone by subscription for US$19 per month.⁠[9]

On March 2, 2015, Epic announced that Unreal Engine 4 and all future updates would be free to everyone, with a 5% royalty on gross revenue from shipped products above the first US$3,000 per product per quarter.⁠[9]

In 2017, Fortnite debuted on several platforms, initially with only the Save the World mode; later that year Epic released the Battle Royale mode. By 2023, the record cited by the appeals court showed the game had over 400 million users across consoles, computers, smartphones and tablets.⁠[7][10]

In December 2018, Epic launched the Epic Games Store for PC, marketing an 88/12 revenue split to developers, which the court found to be below Epic’s cost of distribution. As of 2026, the store’s page said its standard 88%/12% model applies after the first US$1 million in net revenue and that it reaches over 295 million users in 187 countries.⁠[7][11]

In the early morning of August 13, 2020, Epic activated undisclosed “hotfix” code in Fortnite that it had submitted to Apple for review, letting players pay directly outside Apple’s in-app purchase system; Apple removed Fortnite from the App Store that day, and Epic then sued Apple in the U.S. District Court for the Northern District of California, also filing a complaint against GoogleGoogleGoogle is an American technology company founded by Larry Page and Sergey Brin and incorporated in 1998. It became an Alphabet subsidiary in 2015. Its businesses include internet search, advertising, software platforms, cloud computing, and artificial intelligence.Open the full entry the same day.⁠[7][10]

On April 13, 2021, Epic announced a completed US$1 billion funding round at an equity valuation of US$28.7 billion, including an additional US$200 million strategic investment from Sony Group Corporation; other investors included Appaloosa, Baillie Gifford and Fidelity Management & Research Company. In the announcement Sweeney tied the investment to the company’s vision for “the Metaverse.”⁠[12]

That year Epic announced the acquisitions of the digital art platform ArtStation (April 30) and the 3D model platform Sketchfab (July 21), which kept operating as an independently branded service and cut its store fees to 12%; on November 23, music game developer Harmonix joined Epic.⁠[13][14][15]

On September 10, 2021, Judge Yvonne Gonzalez Rogers ruled after trial that Epic had not proved Apple to be a monopolist under federal or California antitrust law, but that Apple’s anti-steering provisions, which barred developers from directing users to other payment methods, violated California competition law, and she issued a nationwide injunction; the court also found that Epic had breached its contract with Apple.⁠[7][10]

On April 5, 2022, Epic released Unreal Engine 5, introducing Lumen, a fully dynamic global illumination solution, and Nanite, which supports massive amounts of geometric detail.⁠[16]

On April 11, 2022, Epic announced a US$2 billion funding round in which Sony Group Corporation and KIRKBI, the family-owned holding company behind the LEGO Group, each invested US$1 billion, at a post-money valuation of US$31.5 billion, subject to customary closing conditions including regulatory approvals. Earlier that year, Epic acquired the music platform Bandcamp.⁠[17][18]

On December 19, 2022, the U.S. Federal Trade Commission (FTC) announced that Epic had agreed to pay a total of US$520 million under two settlements: a US$275 million civil penalty for violating the Children’s Online Privacy Protection Act (COPPA) Rule, which the FTC called the largest it had obtained for violating one of its rules, and US$245 million in refunds over what the FTC alleged were “dark patterns” that led players into unwanted purchases and charges to children without parental consent. The FTC also alleged that Epic’s on-by-default live voice and text chat harmed children and teens. Epic said in a statement that the payments resolved concerns about past designs of the Fortnite item shop and children’s privacy.⁠[19][20]

On April 19, 2023, Brazil-based game studio AQUIRIS announced it was joining Epic and becoming Epic Games Brasil.⁠[21]

On April 24, 2023, the U.S. Court of Appeals for the Ninth Circuit largely affirmed the trial ruling in Epic v. Apple, reversing only the ruling on attorney fees; on January 16, 2024, the U.S. Supreme Court denied both sides’ petitions for certiorari.⁠[10][22]

On September 28, 2023, Sweeney announced in an email to employees the layoff of around 830 people, about 16% of staff, saying the company had been “spending way more money than we earn.” Epic also announced it was divesting Bandcamp to the music company Songtradr and spinning off most of SuperAwesome as an independent company; laid-off employees received six months of base pay.⁠[23]

In December 2023, a jury in Epic v. Google returned a unanimous verdict for Epic, finding that Google had willfully acquired or maintained monopoly power in the Android app distribution and in-app billing markets in violation of federal and California antitrust law. Epic called it “a win for all app developers and consumers around the world.”⁠[24][25]

On February 7, 2024, Disney and Epic announced a collaboration to build an open, persistent and social games and entertainment universe connected to Fortnite, featuring content from Disney, PixarPixarPixar Animation Studios is a computer animation film studio in Emeryville, California, spun off from Lucasfilm’s Computer Division in 1986; it released the first computer-animated feature, Toy Story, in 1995, has been a wholly owned subsidiary of The Walt Disney Company since 2006, and developed technologies including RenderMan and Universal Scene Description.Open the full entry, Marvel, Star WarsStar WarsStar Wars is a space-fantasy film and entertainment franchise created by George Lucas and now owned by Lucasfilm, a subsidiary of The Walt Disney Company.Open the full entry, Avatar and more and powered by Unreal Engine; Disney also agreed to invest US$1.5 billion for an equity stake in Epic.⁠[26]

On August 16, 2024, the Epic Games Store launched on Android devices worldwide and on iPhones in the European Union, debuting with Fortnite, Rocket League Sideswipe and the new Fall Guys for mobile; Epic said the iOS launch in the EU was possible thanks to the Digital Markets Act.⁠[27]

Judge James Donato, who presided over Epic v. Google, then entered a three-year permanent injunction running from November 1, 2024, to November 1, 2027, requiring Google to let developers tell users about alternative billing and distribution channels, to let third-party Android app stores access the Google Play StoreGoogle PlayGoogle Play is a digital content distribution service operated by Google, centered on the Google Play Store, the app store for Android devices. Its predecessor, Android Market, launched in October 2008 alongside the first Android phone, and in March 2012 it merged with Google Music and the Google eBookstore and was renamed Google Play. As the main distribution channel for Android apps, its commissions, billing rules, and review practices have drawn controversy, including the Epic Games antitrust lawsuit in the United States and penalties under the European Union’s Digital Markets Act.Open the full entry’s catalog of apps, and not to prohibit the distribution of third-party app stores through Google Play. On July 31, 2025, the Ninth Circuit affirmed the jury verdict and upheld the injunction in full.⁠[24]

On April 30, 2025, Judge Gonzalez Rogers granted Epic’s motion to enforce the injunction, finding Apple in willful violation of the 2021 injunction, barring Apple from imposing a new commission on off-app purchases, and referring the matter to the U.S. Attorney for the Northern District of California for possible criminal contempt proceedings.⁠[28]

On March 24, 2026, Sweeney announced the layoff of more than 1,000 employees, about 20% of the workforce (about 5,000 before the cuts), saying a downturn in Fortnite engagement that began in 2025 meant the company was spending significantly more than it was making; the company also identified over US$500 million in savings in contracting, marketing and closing some open roles, and said the layoffs were not related to AI. Affected employees received at least four months of base pay and extended company-paid healthcare.⁠[29][4]

On October 12, 2026, Sweeney wrote on X: “We have a huge pivot underway here at Epic, moving developers around to retool for maximum AI acceleration.” “The aim isn’t to do the same stuff with fewer people, but to enable everyone here to build MORE and BETTER stuff, and to bring the benefits to all teams using Unreal.” He added that greater internal use of AI would help Epic “survive the AI revolution.”⁠[30][31][32]

The same day, Epic reportedly delayed an unannounced shooter developed with Disney and featuring Marvel and Star Wars characters, which had been targeted for March 2027, with no new date set; developers were reportedly told to take an “AI first” approach, relying heavily on AI for code and art. Sweeney’s post addressed the company’s overall AI direction and did not confirm the specific claims about the game.⁠[33][30][32]

Epic Games: Official website: https://www.epicgames.com/ (opens in a new window)⁠[1]