Video game development and publishing company Epic Games has scored another win by signing a deal with telecom giant Telefonica (TEF). This has the Epic Games Store, the marketplace app owned by Epic Games, coming preinstalled on all compatible Android devices on Telefonica’s networks in Spain, the UK, Germany, Mexico, and parts of Latin America.
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That’s big news for Epic Games as it marks the first time its marketplace app will come preinstalled on Android devices. This increases the marketplace’s exposure, increasing the chance of users downloading and playing Fortnite, Fall Guys, Rocket League Sideswipe, and other games.
What This Means for Epic Games
Epic Games largely relies on a free-to-play model that generates revenue through in-game sales. This lets players experience its games for free with the option of purchasing cosmetics and other in-game goods with real money. This has proven to be a lucrative model for Epic Games, with an estimated revenue of $5.63 billion in 2023. Estimates are for that to increase to $6.21 billion by 2026.
With more eyes on Epic Games thanks to this deal with Telefonica, the possibility of its revenue increasing further is up. On top of that, Telefonica notes that its partnership with Epic Games isn’t just about its marketplace being preinstalled on Android devices. It’s unclear what the two have planned next, with Telefonica only saying the collaboration would expand over the next year.
How to Invest in Epic Games
Epic Games is a private company, meaning traders can’t take a stake in it. Considering today’s news, they might instead be interested in Telefonica. Analyst coverage is lacking with a single Hold rating over the last three months. There’s also no average price target for the shares.
Another option would be investing in a company that holds a stake in Epic Games. Two worth mentioning are Tencent (TCEHY) and Disney (DIS). Tencent has a higher upside potential at 24.69% compared to Disney’s 9.05%, as well as a higher smart score.
