Epic Games CEO Tim Sweeney has come a long way from designing video games in his parents' house as a kid — the company he founded is making some of the world's most popular video games, from the "Gears of War" franchise to "Fortnite." Sweeney ...
Tom Huddleston Jr.
Qilai Shen/Bloomberg | Getty Images
Epic Games CEO Tim Sweeney has come a long way from designing video games in his parents' house as a kid — the company he founded is making some of the world's most popular video games, from the "Gears of War" franchise to "Fortnite."
Sweeney turned his childhood hobby into a lucrative career. In 1991, as a 21-year-old college student, he started the video game company out of his parents' house in Potomac, Maryland. He was still living in a college dorm at the University of Maryland (where he said he did "not quite" finish a degree in mechanical engineering) and would drive about 30 minutes to his parents' house to use the personal computer he kept there, Sweeney said in a 2009 interview.
"I'd go back there on weekends," he explained.
Now, Sweeney's Epic Games is one of the gaming industry's hottest players, thanks to the massive success of "Fortnite" — a multi-player survival game that launched on PC, Playstation 4, Xbox One and Mac in 2017.
In less than a year, the game's popular (and free-to-play) "Battle Royale" mode — where 100 players per game battle it out to the death with a variety of weapons and tools at their disposal — is being played by more than 40 million people each month.
At one point in February 2018, "Fortnite" had over 3.4 million people playing the game online at once. The game has become something of a cultural phenomenon to the point that celebrities like the rapper Drake and singer Joe Jonas have been known to spend their time playing with everyday gamers.
On Tuesday, at the Electronic Entertainment Expo 2018, or E3 2018, video game giant Nintendo confirmed that "Fortnite" will now be available to play on the Nintendo Switch gaming console. Meanwhile, at 6:30 p.m. ET, Epic Games is hosting a Fortnite Celebrity Pro-Am where 50 professional gamers will team with celebs like NBA star Paul George for a shot at $3 million in prize money.
Despite being free to play, "Fortnite" pulled in an estimated $296 million in April, according to research firm SuperData, thanks to in-game purchases by players who spend money on things like new costumes and tricked-out tools (like a pickaxe outfitted with glow-sticks). The game is on pace to gross roughly $3.5 billion this year alone.
But "Fortnite's" huge success is a stark contrast to the first game that Sweeney developed for Potomac Computer Systems (the original name for the company that later became Epic Games) in 1991. Called "ZZT," customers purchased that game by mailing a check to Sweeney's parents' house in Maryland and waiting for him to mail a copy of the game back to them on a computer disk.
The PC game that gave players the tools to basically create their own customized video games within the game. Sweeney first started working on "ZZT" as a teenager; in fact, he'd been programming computer games as a hobby since he was 11 years old.
As a kid, Sweeney would play classic video games like Nintendo's "Super Mario Bros." partly just to figure out how they worked, so he could build his own. "I would play games long enough to discover what games were doing and how they were doing it. And then I'd spend the rest of my time building," Sweeney told gaming site Kotaku in 2011.
Sweeney decided to launch his own company after finding himself hating a "succession of jobs," he told the gaming site Gamasutra in 2009, including mowing lawns and making minimum wage (about $4 per hour at the time) working at a hardware store. "That really sucked," Sweeney said.
But, those early jobs also helped bring out Sweeney's entrepreneurial side. After borrowing a tractor from his dad, Sweeney told Kotaku, he'd charge half the price of established landscaping companies to mow lawns in his Maryland neighborhood, thus undercutting his competition while making about $25 an hour.
"That's when I came to a really clear realization that, by trying harder, and striving to find cool business opportunities, you could do far, far better than the wage earners," Sweeney said. "At that point it became really clear to me that there were big opportunities in the world."
Sweeney first started Potomac Computer Systems with a plan to focus on computer consulting and making online databases for customers, but he told Gamasutra he "didn't get anywhere with it." He kept the name even after he pivoted to video games, and spent nine months building "ZZT," simply because he already had "business cards with 'Potomac Computer Systems.'"
"I was working on it part time between mowing lawns in the summer and going to class in the school year," Sweeney said in 2009.
When "ZZT" was first released in 1991, orders started coming in immediately and Sweeney said he eventually sold "several thousand" copies. In fact, Sweeney told Gamasutra that his father still gets "an order every few weeks" because he still lives in the same house in Potomac, Maryland.
"I was selling about three or four copies a day, which is a hundred dollars a day," Sweeney said. "It was income you could live on, actually."
Around this time, Sweeney decided he wanted to give his company a "serious name," so he renamed it "Epic MegaGames" as "kind of a scam to make it look like we were a big company."
"Of course, it was just one guy working from his parents' house," Sweeney told Gamasutra.
The initial success of "ZZT" gave Sweeney the confidence to turn his one-man operation into a full-time career, so he began working on what would become his next game: a PC adventure game called "Jill of the Jungle," which came out in 1992 and later became a trilogy of games.
Eventually, Sweeney shortened the company's name to Epic Games and moved out of his parents' house. In 1999, the company moved to its current location in Cary, North Carolina, where Epic Games currently employs more than 700 people.
The first installment of "Gears of War" was released in 2006 and the game franchise, which includes more than half a dozen titles, is estimated to have sold more than 22 million units and generated over $1 billion in revenue. Microsoft bought that franchise for an undisclosed amount in 2014, a deal that came a year after Chinese tech company Tencent paid $330 million for a 40 percent stake in Epic Games, in 2013.
Now, "Fortnite's" popularity is already inspiring other game-makers, like Electronic Arts, to try to copy the success of "Fortnite." This, even as Epic Games tries to fend off a copyright lawsuit alleging that its game too closely mirrors one of its rivals: PlayerUnknown's "Battlegrounds." (Sweeney has said the two games are "complimentary" and that "if they're two great games, people will play both.")
Meanwhile, Sweeney and Epic Games continue to look ahead with plans to build on the popularity of "Fortnite." That includes a leap into the esports market with a "Fortnite" tournament planned to start sometime in 2018 for which Epic Games has promised to provide $100 million in total prizes.
How this 33-year-old college dropout co-founded GitHub, which just sold to Microsoft for $7.5 billion
Like this story? Subscribe to CNBC Make It on YouTube!
Make It - Entrepreneurs,Fortnite,Video games,Entrepreneurship,Make It,Entrepreneurs,business news