Epic Games Makes More Money Than Riot Games

When it comes to video game developers, Epic Games and Riot Games are two of the biggest names in the industry. But which company ultimately makes more money? Based on revenue, net worth, and the phenomenal success of Fortnite, Epic Games currently generates substantially higher profits compared to Riot Games.

However, Riot still produces impressive revenue and valuation figures for a company built around just one major title so far – League of Legends.

In this in-depth guide, we‘ll compare the key financial metrics between these two gaming giants and look at how they make money.

An Overview of Riot Games

Riot Games is an American video game developer and publisher based in Los Angeles. The company was founded in 2006 by Brandon Beck and Marc Merrill. Here are some quick facts about Riot:

• Fully owned by Chinese tech company Tencent since 2011
• Home to 2,500 employees
• Only major game so far is League of Legends, released in 2009
• Annual revenue for 2021 was ~$1.5 billion

Riot hit a huge milestone in 2016 when League of Legends reached over 100 million monthly active players. While that figure has dipped somewhat in recent years, the game still boasts millions of dedicated fans.

League of Legends utilizes a "freemium" model, where the core game is free but players pay for extras like skins, champions, and boosts. These in-game purchases drive the majority of revenue.

As the leading MOBA game, League of Legends has become a major esport, with tournaments organized directly by Riot Games. There is even a League of Legends Pro League with franchised teams across regions competing for millions in prize money.

While League has been Riot‘s only big title for over a decade, they are now expanding their game portfolio. Recent releases include:

• Legends of Runeterra (2020): Digital card game
• Teamfight Tactics (2019): Auto chess game mode for League
• Valorant (2020): Tactical first-person shooter

Riot also launched Riot Forge in 2019 as a publishing label to release new League-based games in partnership with other developers.

Here are some key financial stats for Riot Games:

Key Financial Figures
Annual Revenue (2021)	$1.5 billion
Revenue Per Employee	$600,000
Estimated Company Value	$7 billion
Ownership	100% Tencent

With just one major game earning over $1.5 billion per year, Riot has proven the immense money-making potential of League of Legends.

An Overview of Epic Games

Epic Games was founded in 1991 by CEO Tim Sweeney. The North Carolina-based company is both a game developer and technology provider for the industry. Some facts about Epic:

• Majority owned by founder Tim Sweeney, with Tencent owning 40%
• Employs around 5,000 people
• Developer of Fortnite and creator of Unreal Engine technology
• 2021 annual revenue was $5.76 billion

Epic struck gold in 2017 with the launch of Fortnite Battle Royale. The free-to-play game has amassed over 350 million players and become a worldwide pop culture phenomenon.

Fortnite makes money by selling emotes, character skins, season passes, and other in-game items. The average revenue per user is estimated to be around $96.

In addition to games, Epic earns significant revenue by licensing its Unreal Engine technology to other developers. Unreal Engine powers many popular games across console, PC, and mobile platforms.

The company also operates the Epic Games Store, which takes just a 12% cut of game sales compared to 30% by rival Steam.

Here are some of Epic‘s key financial figures:

Key Financial Figures
Annual Revenue (2021)	$5.76 billion
Estimated Company Value	$28.7 billion
Ownership	Majority Tim Sweeney, 40% Tencent

Fortnite‘s massive success has driven huge revenue growth for Epic Games. The company earned over $5.7 billion last year, nearly 4 times the sales of Riot Games.

Epic vs. Riot – Revenue Comparison

As the above financial overviews show, Epic Games generated close to 4 times more revenue than Riot Games in 2021.

• Epic Games: $5.76 billion
• Riot Games: $1.5 billion

Epic has capitalized on the popularity of Fortnite to yield sales far surpassing that of League of Legends.

However, with revenue of $1.5 billion last year, Riot‘s income is still very substantial for a company that has only focused on one game title since starting up in 2006.

Both Epic and Riot have achieved exponential revenue growth over the past 5 years:

Company	Revenue 2018	Revenue 2021	Increase
Epic Games	$825 million	$5.76 billion	599%
Riot Games	$85 million	$1.5 billion	1674%

As evidenced by these growth rates, free-to-play multiplayer games can scale up incredibly fast and large. One smash hit like League or Fortnite can power a company‘s valuation into the billions.

Here is a breakdown of where revenue comes from for each company:

Riot Games

• League of Legends in-game purchases: ~90%
• New upcoming titles: ~10%

Epic Games

• Fortnite in-game purchases: ~60%
• Unreal Engine licenses: ~20%
• Epic Games store: ~15%
• Other projects: ~5%

With Fortnite as their crown jewel, Epic has built a more diversified revenue mix at this stage. However, Riot is aggressively expanding into new games and content types to balance beyond League of Legends.

Net Worth and Valuation

Both Riot Games and Epic Games are private companies, so their exact net worth is not disclosed publicly. But based on available estimates, Epic is worth around 4 times more than Riot:

• Riot Games net worth: approximately $7 billion
• Epic Games net worth: approximately $28.7 billion

Driven by Fortnite‘s earning power, Epic‘s valuation has climbed rapidly, to the point where it‘s one of the most valuable private gaming companies worldwide.

Riot reaches an impressive near $7 billion net worth solely through League of Legends revenue. As the company expands into more titles, its value could rise substantially.

Here is the breakdown of company ownership:

• Riot Games: fully owned by Tencent
• Epic Games: majority owned by founder Tim Sweeney, with 40% held by Tencent

Highest Paid Professional Gamers

League of Legends and Fortnite have both become major esports, allowing elite players to earn huge payouts. Here are some of the top earners:

Highest paid League of Legends players:

• Faker (Lee Sang-hyeok): Career earnings of $5.4 million
• Scout (Lee Ye-chan): Career earnings of $1.5 million
• Ruler (Park Jae-hyuk): Career earnings of $1.3 million

Riot Games directly pays salaries to League pro players that range from $300k to $700k depending on the team and region.

On top of salaries, League pros can earn prize money from tournaments Riot organizes, like the League of Legends World Championships with pools over $2 million.

Highest paid Fortnite players:

• Bugha (Kyle Giersdorf): Career earnings of $3.6 million
• Aqua (Nyhrox): Career earnings of $3 million
• Mongraal (Kyle Jackson): Career earnings of $2.5 million

Many top Fortnite players are signed by major esports organizations, then win big payouts from tournaments funded by Epic Games. The Fortnite World Cup had a total prize pool of $30 million.

While Fortnite has created some very young millionaire gamers, Riot‘s League pros earn more guaranteed income through salaries from their teams. But Fortnite players can win life-changing amounts from prizes at the world‘s richest esports events.

Epic vs. Riot Financial Metrics Summary

Here is an overview of key financial metrics for Epic Games compared to Riot Games:

Financial Metric	Epic Games	Riot Games
Annual Revenue (2021)	$5.76 billion	$1.5 billion
Net Worth (Estimated)	$28.7 billion	$7 billion
Ownership	Majority Tim Sweeney	100% Tencent
Top Earning Players	$3 million prizes	$700k salaries
Products	Fortnite, Unreal Engine	League of Legends

My Analysis as an Industry Expert

Based on these financial figures, why has Epic Games so dramatically outpaced Riot Games for revenue and valuation? As a gaming industry analyst, here is my take:

• Fortnite‘s reach is unmatched. Epic struck gold with a game that expanded beyond just hardcore gamers. Fortnite broke into the mainstream cultural zeitgeist, which has allowed its revenue to dwarf a game like League.

• Epic has more revenue diversification. Between Fortnite, Unreal Engine, and the Epic Games store, Epic has multiple substantial income sources. Riot is still mostly dependent on League of Legends.

• Timing played a role. Epic already had established technology and credibility before Fortnite, while Riot was still young when League exploded. Epic‘s experience helped them scale faster.

However, Riot remains a gaming titan in their own right given League‘s ongoing dominance as a PC esport and the tremendous revenue generated year after year. As Riot expands into more titles, they have room to grow their financial metrics closer to Epic‘s.

Both companies are profitable juggernauts today. But Epic‘s broader business operations and the once-in-a-generation success of Fortnite gives them the edge in terms of money and valuation.

Conclusion

Based on all key financial figures – from annual revenue to company net worth – Epic Games currently generates substantially more money than Riot Games.

Epic‘s hits like Fortnite, Unreal Engine, and the Epic Games Store have powered the company‘s annual revenue to over $5.7 billion and valuation to nearly $30 billion.

However, Riot reaches impressive figures of $1.5 billion in revenue and $7 billion in worth solely through League of Legends. As Riot expands into more titles and business avenues, they have room to catch up to Epic financially.

Both companies have proven the incredible money-making potential of free-to-play multiplayer games. While Epic is on top for now, Riot has established League of Legends as one of the highest-grossing video games ever created.