Year: 2018

One of Silicon Valley’s prominent billionaires is in hot water after funding deceptive social media campaigns with echoes of Russia’s own political playbook. Reid Hoffman, who co-founded LinkedIn in 2003 and is now a partner at Greylock, footed the bill for a small political project with the aim of getting Democrat Doug Jones elected in 2017’s special election. Now, Hoffman is sorry — but he also maintains that he didn’t know where his money ended up.

It’s not clear what impact the project had in successfully electing Jones, but internal documents reveal that the effort known as Project Birmingham “experimented with many of the tactics now understood to have influenced the 2016 elections.” Those tactics are now widely regarded as both politically and professionally toxic as tech companies — most notably Facebook — continue to face intense scrutiny over their role in facilitating the spread of disinformation meant to influence U.S. political behavior.

As The New York Times reported:

The project’s operators created a Facebook page on which they posed as conservative Alabamians, using it to try to divide Republicans and even to endorse a write-in candidate to draw votes from Mr. Moore. It involved a scheme to link the Moore campaign to thousands of Russian accounts that suddenly began following the Republican candidate on Twitter, a development that drew national media attention.

In a statement following reporting from The New York Times and The Washington Post, Hoffman did not dispute the assertion that he funded the efforts, but denied any knowledge of the controversial tactics themselves.

“I want to make it clear from the outset that I had never even heard of this project before reading about it in the Times’ coverage,” Hoffman said in the statement, published to Medium. “The Times articles imply that I had knowledge of it and that I endorsed its tactics. Let me be absolutely clear: I do not.”

Hoffman went on to disavow the use of political disinformation intended to influence the outcome of an election.

“I would not have knowingly funded a project planning to use such tactics, and would have refused to invest in any organization that I knew might conduct such a project,” Hoffman said. “Nevertheless, I do have an apology to make and have learned a lesson here.”

In his Medium post Hoffman describes how he became more politically active after the 2016 U.S. presidential election. He recounts how he funded dozens of political and civic engagement organizations in conjunction with a group called Investing in Us. “Our goal is to identify promising organizations and provide them with resources to accelerate positive change,” Hoffman said.

Many of those investments appear to be uncontroversial, including contributions to the Center on Rural Innovation and an organization called Opportunity at Work which helps connect Americans with job opportunities. As Hoffman explains, his entanglement in the Alabama Senate race came about through his choice to fund a group called American Engagement Technologies (AET):

One of the early organizations that we supported was American Engagement Technologies (AET), a group which sought to develop technical solutions to counteract fake news, bot armies, and other kinds of digital manipulation and disinformation, and to use social media and data analytics to increase civic engagement and improve access to accurate information about candidates and issues.

AET, in turn, provided funding to a group called New Knowledge. Through AET or otherwise, I have never personally authorized or directed any funding to New Knowledge. I — regretfully — do not know why AET chose to support New Knowledge or for what specific purposes, if any, this funding was allocated.

To reiterate yet again, I find the tactics that have been recently reported highly disturbing. For that reason, I am embarrassed by my failure to track AET — the organization I did support — more diligently as it made its own decisions to perhaps fund projects that I would reject.

Though Hoffman’s post did not specify an amount, The Washington Post reported that Hoffman invested $750,000 in AET. The group is helmed by Mikey Dickerson, a former Google engineer who served as the founding director of the USDS during Obama’s presidency.

Earlier this week, Facebook suspended the account of Jonathon Morgan, the head of New Knowledge. Morgan previously acknowledged that he set up a misleading Facebook page to test his ability to engage with conservative voters and bought less than $10 worth of Twitter retweets for the same goal. Morgan characterized this undertaking as “small-scale” and told The Washington Post that these efforts were made only in “his own capacity as a researcher seeking to understand the mechanics of disinformation tactics, not as New Knowledge’s leader.”

Last week, Doug Jones articulated his support for a federal probe into the role the disinformation tactics could have played in his successful Senate bid. Hoffman also expressed his support for a federal investigation.

“We cannot permit dishonest campaign tactics to go unchecked in our democracy — no matter which side they purportedly help,” Hoffman said.

The secondary luxury goods market has been growing wildly in recent years, with more shoppers opting to both sell their lightly used luxury goods like clothing and jewelry for cold hard cash, as well as buying the pre-owned, authenticated, luxury goods of others.

One of the biggest beneficiaries of the trend is The RealReal, a nearly eight-year-old shopping destination for the growing population of people who might not be willing or able to purchase a new Hermes Birkin bag but are willing to buy one in like-new condition for considerably less. The idea — which seems to be working — is to create a virtuous cycle, wherein the bag’s original purchaser receives the bulk of that re-sale price, then uses the money to buy another new handbag (or a used one) that can be resold at a later point in time.

Another beneficiary of the trend: TrueFacet, a five-year-old, New York-based marketplace that claims to have more than 40,000 watches and 55,000 pieces of pre-owned authenticated watches and jewelry for sale at its site, and that has more recently begun offering pre-owned timepieces directly through brands like Fendi Timepieces, Raymond Weil, and Roberto Coin that now partner with TrueFacet to carry their pre-owned timepieces with a manufacture warranty.

Apparently, shoppers are buying what they’re collectively selling. The company, which had previously raised $14.7 million in funding from investors, looks to be closing in on another $10 million round, judging by freshly filed SEC paperwork that shows it has so far raised $7 million in funding and is targeting $9.8 million altogether.

TrueFacet’s backers include Founders Co-op,  Freestyle Capital, and Maveron, led by partner Jason Stoffer, who also happens to sit on the board of Dolls Kill, an edgy clothing marketplace that we wrote about on Monday. 

TrueFacet has some tough competition in the space, including Crown & Caliber, a six-year-old, Atlanta, Ga.-based company that has never announced outside funding, and 15-year-old, Germany-based Chrono24, which has raised €21 million over the years. Both sell timepieces alone, however.

It also competes directly with The RealReal, which has raised nearly $300 million from investors and sells clothing, high-end home decor, as well as jewelry and watches. (The company doesn’t break out publicly which of these categories outpace the others in terms of sales.)

Interestingly, like The RealReal, which now operates permanent offline stores in both New York and L.A., TrueFacet is also crossing the chasm into the offline world, though it’s taking baby steps toward that end.

Specifically, earlier this month, it announced a partnership with Stephen Silver Fine Jewelry, which sells timepieces to many monied Bay Area VCs and other Silicon Valley bigs at stores in Redwood City and Menlo Park, Ca. For the time being at least, the jeweler will also sell pieces from TrueFacet’s collection.

Elon Musk has filed a motion to dismiss a defamation lawsuit filed against him by the British cave rescuer who sued the billionaire entrepreneur for calling him a pedophile.

Musk’s motion presents numerous reasons to dismiss the defamation lawsuit, all of which come back to a two main points: Twitter is “infamous for invective and hyperbole,” and therefore should not be considered fact and these “imaginative attacks,” even if offensive, “are by their nature opinion and protected by the First Amendment.” 

Musk’s lawyers ask a single question in the request: “Accepting Unsworth’s well-pleaded allegations as true, would a reasonable reader believe that Musk’s statements were supported by objective facts or were instead “nonactionable opinion?”

The list of arguments laid out in the motion to dismiss are:

1. Unsworth must prove that the reasonable reader would believe Musk possessed private facts implicating Unsworth as a pedophile.
2. In context, Musk’s statements cannot reasonably be read as asserting underlying knowledge that Unsworth was a pedophile
3. Statements on unmoderated Internet forums are presumptively opinion.
4. Musk’s underlying argument is that “his over-the-top insults are not statements of fact.”
5. Musk disclosed the basis for his personal opinion: Thailand’s documented problems with sex tourism
6. Musk’s over-the-top insults are not statements of fact
7. Musk’s colloquial statements are not reasonably interpreted as statements of facts
8. Musk’s expressions of uncertainty show that his statements did not have a concrete factual foundation and were therefore opinion
9. Readers did not interpret Musk’s statements as factual assertions

Whether these arguments will be enough to convince a judge to dismiss the lawsuit is unclear. However, it raises a different question. If the argument is to be believed, it would suggest that other claims and promises Musk puts on Twitter shouldn’t be trusted as fact either.

The whole “pedo guy” episode began over the summer after Musk and employees at his companies, SpaceX, Tesla, and The Boring Company, became involved in an effort to extract 12 boys and their soccer coach from the Tham Luang Nang Non cave system located in Northern Thailand after flooding trapped the group for weeks. Musk’s team developed and then sent  mini submarine built out of rocket parts that he thought could help.

The team of divers who eventually rescued every person trapped in the cave didn’t use the mini-submarine, dubbed by Musk’s people as “Wild Boar.”

Unsworth, a British ex-pat who lives in Thailand, helped plan the rescue operation and recruited other cave diving experts. The fight began after Unsworth gave an interview on CNN International, in which he called the mini submarine a “PR stunt,” that it “had absolutely no chance of working” and that Musk could “stick his submarine where it hurts.”

Musk subsequently lashed out on Twitter and insinuated that Unsworth was a pedophile. He later deleted the offending tweet and tried to backpedal — even offering an apology of sorts on Twitter. And it could have all ended there. But then Musk dug it all up again during a debate with ex-TechCrunch journalist Drew Olanoff — once again on Twitter. Olanoff had brought up the “pedo guy” attack as an example of Musk telling untruths.

Unsworth filed a lawsuit September in the U.S. District Court for the Central District of California against Musk for defamation. The lawsuit alleges that between July 15 and August 30, Musk periodically used Twitter and emails to the media to publish false and defamatory accusations against Unsworth, including accusations of pedophilia and child rape.

Read the entire motion here.

Startups supporting startups are blazing a new trail with support from venture capitalists.

Co-working spaces like The Wing and The Riveter raked in funding rounds this year, as did Brex, the provider of a corporate card built specifically for startups. Now Carta, which helps companies manage their cap tables, valuations, portfolio investments and equity plans, has announced an $80 million Series D at a valuation of $800 million. The company, formerly known as eShares, raised the capital from lead investors Meritech and Tribe Capital, with support from existing investors.

The round brings Carta’s total funding to $147.8 million. Its existing investors include Spark Capital, Menlo Ventures, Union Square Ventures and Social Capital, though the latter didn’t participate in the Series D funding. Tribe Capital, however, is a new venture capital firm launched by Arjun Sethi, who previously led Social Capital’s investment in Carta, Jonathan Hsu and Ted Maidenberg, a trio of former Social Capital partners who exited the VC firm amid its transition from a traditional VC fund to a technology holding company. Tribe is said to be in the process of raising its own $200 million debut fund.

Founded in 2012 by Henry Ward (pictured), the Palo Alto-based company plans to use the latest investment to develop their transfer agent and equity administration products and services to better support startups transitioning into public companies. It also will launch additional products for investors to collect data from their portfolio companies and to manage their back office.

“We’ve come this far by changing how ownership management works for private companies—popularizing electronic securities and cap table software, combined with audit-ready 409As,” Ward wrote in an announcement. “But our ambitions go far beyond supporting privately-held, venture-backed companies.”

Carta, which counts Robinhood, Slack, Wealthfront, Squarespace, Coinbase and more as customers, currently manages $500 billion in equity. This year, Carta expanded its headcount from 310 employees to 450 employees, launched board management and portfolio insights products and completed a study in partnership with #Angels that highlighted the major equity gap female startup employees are victim to.

The study, released in September, revealed that women own just 9 percent of founder and employee startup equity, despite making up 35 percent of startup equity-holding employees. On top of that, women account for 13 percent of startup founders, but just 6 percent of founder equity — or $0.39 on the dollar.

Tesla CEO Elon Musk is making some audacious promises again for the company’s network of electric fast chargers, known as Superchargers. This time, he’s aiming for 100% Tesla Supercharger coverage in Europe by next year.

In response to a question on Twitter, Musk said Tesla’s Supercharger coverage will extend to 100% of Europe in 2019. “From Ireland to Kiev, from Norway to Turkey,” Musk wrote.

A look at Tesla’s Supercharger map shows a high concentration of the fast chargers in Western Europe. Countries like Albania, Estonia, Latvia, Lithuania, Romania, Serbia and Moldova don’t have any Superchargers.

Musk also laid out plans to focus on cities, specifically to work with landlords to add home charging units at apartment buildings.

Musk then went further, this time in response to a Twitter follower who noticed that Superchargers planned for San Antonio and Austin in 2018 had yet to be completed. The billionaire entrepreneur said “all major highways in Texas will have Superchargers, all the way to Brownsville and across Mexico.”

He even laid out plans, although less specific, to add Superchargers to Africa in 2020. There are no Superchargers on the African continent.

Tesla’s Supercharger network was launched in 2012 in an effort to encourage owners of its electric vehicles to travel longer distances. A Supercharger adds up to 170 miles of range in about 30 minutes (although TechCrunch has experienced slightly longer charge times depending on location).

Musk has made bold promises for the company’s Supercharger network before. And while the company has made substantial progress and investment in its Supercharger network, it’s still nowhere near its previously promised target. 

In April 2017, Tesla said it would double its global network of Superchargers from more than 5,400  to more than 10,000 by the end of the year. It fell short of that goal with about 8,250 Superchargers.

Earlier this year, Musk laid out plans to have 18,000 superchargers globally by the end 2018. As of Dec. 27, Tesla has 11,583 Superchargers (within 1,386 Supercharger stations) globally.

Alexa wasn’t the only thing that crashed over Christmas due to an influx of new users. Apparently, Philips Hue has been having an outage as well. A multi-day outage, in fact. The company confirmed on Wednesday that customers were experiencing issues creating new accounts, logging in, and linking their account to third parties. It blamed the issues on “a lot of new activations.”

In other words, many people received Hue’s connected lighting products over the holidays and were now trying to set up their smart bulbs and other devices all around the same time. Hue’s servers couldn’t keep up with the demand and weren’t responding to the incoming requests. That meant users couldn’t create or log into their MyHue account, or connect their lights to their Amazon Echo or Google Home.

Customers were, understandably, very frustrated – especially since their issues began on Christmas, and had continued for days with no word from the company.

Others complained they had wasted several hours troubleshooting the problem, having not realized it was a Hue outage that was at fault, as a result of this lack of communication.

Philips Hue’s Twitter account didn’t make a public announcement about the outage until Wednesday – instead, the company was only replying to individual users.

Because Twitter hides replies in a separate tab, visitors to Hue’s Twitter page wouldn’t have seen any statements from the company unless they clicked over to see the back-and-forth conversations with Hue’s customers – and some of those weren’t outage-related.

People who followed Hue on Twitter wouldn’t have seen these replies in their own timelines, either.

Philips Hue had also downplayed the problem in its initial replies, as well, saying server issues were affecting only a “small percentage” of users.

Customers were told to try again or try in a few hours.

While Alexa had crashed on Christmas due to a similar problem of too many new users hitting its servers all at once, its outage only lasted for a couple of hours.

In Philip Hue’s case, customers have been inconvenienced for much longer.

Many are also new Hue customers – those who are trying to trying to create their account and set up their devices for the first time. For some, Hue’s smart light bulbs may even be their first experience with a smart home device – and this outage may leave them not wanting to try again.

Early on Thursday, Hue’s Twitter account began to reply to individual users, telling them the service “should be up and running.”

But it also warned them that, depending on demand, they may have to try a few times today to get everything going. The company additionally suggested to some that they should try to set up the lights during off-peak hours, like the morning.

We reached out to Philips Hue to ask if the outage was indeed resolved, and will update with a statement if one is provided.

Instagram confirms that a bug this morning mistakenly rolled out a massive change to its feed that replaced the traditional scrolling with horizontal tap-to-advance like with Stories. In October, TechCrunch reported Instagram was testing tap-to-advance for browsing through Explore posts. But many users woke up to a shock this morning when their familiar vertical swipe stopped advancing the main feed. Many users immediately complained that the gesture felt awkward and annoying.

“Due to a bug, some users saw a change to the way their feed appears today. We quickly fixed the issue and feed is back to normal. We apologize for any confusion” an Instagram spokesperson tells TechCrunch. The company confirms it’s still testing the navigation style in Explore.

Instagram was attempting to test the feature with a small percentage of users, but the bug caused a much broader rollout to a few orders of magnitude more people than planned, according to head of Instagram Adam Mosseri. Users can restart their Instagram and the change should disappear.

Tap-to-advance makes it easier to move between posts with them staying fully in view, compared to scrolling where it can take some adjustment to make sure the top or bottom of a post isn’t cut off. But scrolling revealed the author of a post first, then the content, then the caption, which is a sensible and intuitive way to browse. Tap-to-advance could send users’ eyes flitting around the screen in an exhausting manner. But most importantly, people have spent eight years growing accustomed to scrolling the Instagram feed. Suddenly breaking that behavior pattern was sure to piss people off.

It’s possible that Instagram could still bring tap-to-advance to the main feed in the future. But given how angry the responses were, it might now think twice unless the data shows the change makes people spend a lot more time in the app.

Here’s a look at how tap-to-advance in the feed worked, and the alert users got about how it works.

Grove Collaborative, a four-year-old, San Francisco-based startup that sells household, personal care, baby and kids, and pet products, has been busy raising money in 2018, shows two new SEC filings that lists representatives from company’s earlier investors, including Mayfield, Norwest Venture Partners, and MHS Capital, as well as apparent new investor General Atlantic, represented by partner Catherine Beaudoin.

One of the filings shows that Grove Collaborative, which had already raised roughly $62 million as of the start of 2018, subsequently raised $27.4 million more this year. A separate, second filing shows another $76.4 million has been secured in what looks to be a newer round that’s targeting $125 million. It’s a lot of money for such a young company, which suggests it has found traction with a growing customer base.

We’ve reached out to Grove Collaborative and are waiting to learn more.

As we reported back in January, co-founder Stuart Landesberg started the company after working with retail brands during two years as an associate with TPG Capital, which focuses on growth equity and middle-market private equity transactions. With shelf space limited for brands in brick-and-mortar stores, he saw an opportunity for a startup that prompts consumers to buy the kinds of items they buy over and over again just as they are running out of them: think dish soap, pet food, deodorant, vitamins, and sunscreen.

Amazon, of course, similarly prompts its customers to buy such items, but Grove Collaborative is marketing to a slightly narrower demographic, that of people who want only all-natural products. In fact, along with the brands that it makes it easier for its customers to find — think Method and Mrs. Meyers — the company began selling its own all-natural products this year. Among the many dozens of offerings it now retails under the Grove Collaborative label: a coconut body lotion, a foaming hand soap, coffee filters, soy candles, and lip balm.

The move puts the startup in more direct competition with other e-commerce companies, like the consumer goods company Honest Company, which similarly sells natural products for the home and personal care, though many of its products are now sold on shelves in big retail stores like Target.

Grove Collaborative also looks to be competing more directly now with well-funded Brandless, which raised $240 million from SoftBank’s Vision Fund in summer at a valuation of slightly more than $500 million. Brandless also sells its own all-natural household and personal care products, though unlike Grove Collaborative, it focuses on food, and unlike Grove, it offers a subscription service yet does not revolve around one. Grove is exclusively selling an auto-shipment service.

Grove had previously raised two separate rounds of funding in quick succession: a $15 million Series B round that it closed in March of 2017, following by a $35 million Series C round that it announced in January of this year.

Given that Landesberg was formerly an investor himself, he may well have realized — as have many founders — that raising money next year may be far harder in 2019 than it has been this year. As the CEO of Zymergen, whose giant funding round we recently featured, told Bloomberg last week: “We wanted to have some fat on our bones for sure . . . The time to raise money is when people are giving it to you.”

Epic Games had as good a year in 2018 as any company in tech. Fortnite became the world’s most popular game, growing the company’s valuation to $15 billion but it has helped the company pile up cash, too. Epic grossed a $3 billion profit for this year fuelled by the continued success of Fortnite, a source with knowledge of the business told TechCrunch.

Epic did not respond to a request for comment.

Fortnite, which is free to play but makes money selling digital items, has popularized the battle royale category — think Lord of the Flies meets Hunger Games — almost single-handedly and it has been the standout title for the U.S-based game publisher.

Epic, which was founded way back in 1991, hasn’t given revenue figures for its smash hit — which has 125 million players — but this new profit milestone, combined with other pieces of data, gives an idea of the success that the company is seeing as a result of a prescient change in strategy made six years ago.

This past September, Epic commanded a valuation of nearly $15 billion, according to the Wall Street Journal, as marquee investors like KKR, Kleiner Perkins and Lightspeed piled in on a $1.25 billion round to grab a slice of the red-hot development firm. However, the investment cards haven’t always been stacked in Epic’s favor.

China’s Tencent, the maker of blockbuster chat app WeChat and a prolific games firm in its own right, became the first outside investor in Epic’s business back in 2012 when it injected $330 million in exchange for a 40 percent stake in the business.

Back then, Epic was best known for Unreal Engine, the third-party development platform that it still operates today, and top-selling titles like Gears of War.

Why would a proven company give up such a huge slice of its business? Executives believed that Epic, as it was, was living on borrow time. They sensed a change in the way games were headed based on diminishing returns and growing budgets for console games, the increase of ‘live’ games like League of Legends and the emerging role of smartphones.

Speaking to Polygon about the Tencent deal, Epic CEO Tim Sweeney explained that the investment money from Tencent allowed the company to go down the route of freemium games rather than big box titles. That’s a strategy Sweeney called “Epic 4.0.”

“We realized that the business really needed to change its approach quite significantly. We were seeing some of the best games in the industry being built and operated as live games over time rather than big retail releases. We recognized that the ideal role for Epic in the industry is to drive that, and so we began the transition of being a fairly narrow console developer focused on Xbox to being a multi-platform game developer and self publisher, and indie on a larger scale,” he explained.

Tencent, Sweeney added, has provided “an enormous amount of useful advice” while the capital enabled Epic to “make this huge leap without the immediate of fear of money.”

Epic never had a problem making money — Sweeney told Polygon the first Gear of Wars release grossed $100 million on a $12 million development budget — but with Fortnite the company has redefined modern gaming, both by making true cross-platform experiences possible and by pulling in vast amounts of money.

As a private company, Epic keeps its financials closely guarded. But digging beyond the $3 billion figure — which, to be clear, is annual profit not revenue — there are clues as to just how big a money-spinner Fortnite is. Certainly, there’s room to wonder whether analyst predictions this summer that Fortnite would gross $2 billion this year were too conservative.

The most recent data comes from November when Sensor Tower estimates that iOS users alone were spending $1.23 million per day. That helped the game bank $37 million in the month and take its total earnings within Apple’s iOS platform to more than $385 million.

But, as mentioned, Fortnite is a cross-platform title that supports PlayStation, Xbox, Switch, PC, Mac, Android and iOS. Aggregating revenue cross those platforms isn’t easy, and the only real estimate comes from earlier this year when Super Data Research concluded that the game made $318 million in May across all platforms.

That is, of course, when Fortnite was fresh on iOS, non-existent on Android and with fewer overall players.

We can deduct from Sensor Tower’s November estimate that iOS pulled in $385 million over eight months — between April and November — which is around $48 million per month on average. Android is harder to calculate since Epic skipped Google’s Play Store by distributing its own launcher. While it quickly picked up 15 million Android users within the first month, tracking that spending off-platform is a huge challenge. Some estimates predicted that Google would miss out on around $50 million in lost earnings this year because in-app purchases on Android would not cross its services.

There are a few factors to add further uncertainty.

Fornite spending tends to spike around the release of new seasons — updated versions of the game — since users are encouraged to buy specific packages at the start. The latest, Season 7, dropped early this month with a range of tweaks for the Christmas period. Give the increased velocity that Fortnite is picking up players and the appeal of the festive period, this could have been its biggest revenue generator to date but there’s not yet any indicator of how it performed.

More broadly, Fortnite has undoubtedly lost out on revenue in China, which frozen new game licenses nine months ago thereby preventing any publishers from monetizing new titles over that period.

Tencent, which publishes Fortnite in China, did release the game in the country but it hasn’t been able to draw revenue from it yet. The Chinese government announced last week that it is close to approving its first batch of new titles but it isn’t clear which games are included and when the process will be done.

Already, the effects have been felt.

Games are forecast to generate nearly $40 billion in revenue in China this year, according to market researcher Newzoo. However, the industry saw its slowest growth over the last 10 years as it grew 5.4 percent year-over-year during the first half of 2018, according to a report by Beijing-based research firm GPC and China’s official gaming association CNG.

Fortnite and PUBG — another battle royale title backed by Tencent — have perhaps suffered the most since they are universally popular worldwide but unable to monetize in China. It seems almost certain that those two titles will receive a major marketing push if, as and when they receive the license and, if Epic can keep the game competitive as Sweeney believed it could back in 2012, then it could go on and make even more money in 2019.

But Epic isn’t relying solely on Fortnite.

A more lowkey but significant launch this month was the opening of the Epic Game Store which is aimed squarely at Steam, the leader in digital game sales.

While Fortnite is its most prolific release, Epic also makes money from other games, Unreal Engine and a recently launched online game store that rivals Steam. Epic’s big differentiator for the store is that it gives developers 88 percent of their revenue, as opposed to Value — the firm behind Steam — which keeps 30 percent, although it has added varying rates for more successful titles. Customers are promised a free title every two weeks.

Either way, Epic is betting that it can do a lot more than Fortnite which could mean that its profit margin is even higher come this time next year.