Fortnite creator Epic Games has acquired Houseparty for an undisclosed amount, the developer for the video group chat app for teens announced Wednesday. The win-win deal gives Houseparty access to the game studio's massive user base and extensive resources while boosting Epic Games’ growing influence in the social media space.
“Houseparty brings people together, creating positive social interactions in real time,” said Epic Games’ founder and CEO, Tim Sweeney, in a statement. “By teaming up, we can build even more fun, shared experiences than what could be achieved alone.”
Fortnite has accumulated 250 million players since its launch nearly two years ago, and it’s become a go-to social media platform for teens. A report this year from insights firm National Research Group estimates that among people between the ages 10 and 17 who play Fortnite once a week, the game makes up 25% of their free time. It’s also the service with the highest reported usage year-over-year among tweens, beating out YouTube, Netflix and Facebook.
“Fortnite is the number one service teens are using,” according to the report, “and audiences cite its social elements as the primary motivators for playing: It’s the best place to be my authentic self and to connect to what everyone is talking about, making me feel like I’m not alone.”
Houseparty boasts 35 million downloads, according to an estimate from data firm Sensor Tower (via Wall Street Journal), but installs in this year’s first quarter dropped 38%. Houseparty added a gaming spin to its network in early 2019 through its partnership with the popular gaming app, Heads Up!. Its last funding round came in 2016, bringing its total to $70 million.
“Joining Epic is a great step forward in achieving our mission of bringing empathy to online communication,” said Houseparty cofounder and CEO, Sima Sistani, in a statement. “We have a common vision to make human interaction easier and more enjoyable, and always with respect for user privacy.”
The acquisition continues to illustrate Epic’s aggressiveness for taking advantage of Fortnite’s massive global success. Since the start of the year, the North Carolina-based studio has opened a disruptive digital games storefront, created a $100 million fund for users of its 3-D development software, Unreal Engine, and added Serbia-based graphics design group 3Lateral to its team. Last fall, Epic Games secured $1.25 billion in funding from investors like KKR, Vulcan Capital and Kleiner Perkins. Its success turned Tim Sweeney into a billionaire in 2018. Forbes estimates his net worth at $2 billion.
For the near future, there will be no change to how Houseparty functions, and accounts for the social media app and Epic Games will remain separate.
