Video game developer and publisher Epic Games is in the hot seat today after the Federal Trade Commission (FTC) ordered it to pay $245 million over shady practices. Allegations claim the company used dark patterns to trick gamers into making purchases in its games, including the popular battle royal shooter Fortnite.
This has Epic Games setting a new record, though one it doesn’t want to hold, as it is making the biggest refund connected to a gaming lawsuit. The FTC is sending $72 million to gamers harmed by its “counterintuitive, inconsistent, and confusing button configuration.” That comes to an average of $114 per person.
Some of these payments have been sent out already, with the FTC using PayPal for the first half. The second half will come in the form of checks and be sent out later. Gamers will have to redeem the PayPal funds within 30 days, and those getting checks will have 90 days to cash them.
What This Means for Epic Games
In the grand scheme of things, today’s news won’t mean much to Epic Games. The $245 million paid to the FTC is small change compared to its estimated revenue of $5.628 billion in 2023. Estimates support this idea, as Epic Games’ revenue is expected to reach $6.214 billion in 2026.
Adding to that is the ever-increasing player count in Fortnite. It hit a new all-time peak of 14,343,880 concurrent players only nine days ago. This shows that gamers have no intention of abandoning the game over a refund lawsuit that started two years ago.
How to Invest in Epic Games
Epic Games is a private company, meaning there’s no way for investors to take a direct stake in it. Instead, they might considering buy shares of another public company that’s invested in Epic Games. A couple of strong candidates are Tencent (TCEHY) and Disney (DIS). Tencent holds a 40% stake in Epic Games and is a shareholder in several other game studios. Disney made a massive $1.5 billion investment in Epic Games earlier this year and operates in the larger entertainment industry.
Of the two, Tencent appears to be the better investment. It has a potential 24.53% upside, as compared to Disney’s 9.79%. TCEHY stock also has a lower entry point that’s roughly half the price of DIS, making it a cheaper investment. Finally, its Smart Score is sitting at nine, with Disney’s being a six.
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