Editor’s note: John Gaudiosi, who covers the videogame industry for WRAL Local Tech Wire, talks with Mike Capps, president of Epic Games in Cary, about the fast-growing company in the second of a two-part interview.

REDWOOD SHORES, Calif. – Epic Games is growing as fast as the locust horde that threatens to engulf mankind in the company’s mega-selling “Gears of War” empire (games, movie, books, comics, toys, action figures – and who knows what else to come.)

But all that success hasn’t gone to the head of Epic President Mike Capps, who was in California recently to ink a new game development deal with entertainment giant Electronic Arts.

Where does the company go from here? Read on.

Does Epic have any interesting in publishing its own games down the line?

Dude, who wants to do that? What a crappy business. The margins suck. I’d like to think we know what we’re good at, but we sure no what we’re not good at. We’re not PR guys. We don’t do marketing. I sure don’t want to own factories or distribution. This whole making games thing is going well for us, so we’re going to stick with that for now.

Will Epic continue to work with different publishers moving forward as new games are introduced?

Every publisher has their strengths. I hate to say we love them all, but we’re with several publishers for a reason. We’ve found that certain titles work well for certain publishers. This is one that fit really well with EA. We’re in a position in the industry where a lot of publishers are interested in our next IP. We’re also in a position where we get to pick the one we want to work with most.

When did you start development for this game?

We first started showing some rough demos of this game and pitching it to publishers last year at Leipzig. At that time, all of the publishers were surprised. They didn’t know we had bought People Can Fly and they didn’t know why we were meeting them.

How did this new game idea come to fruition?

People Can Fly came up with a number of ideas and presented one and it’s sort of become community-owned at this point. Everyone’s had input, including EA with story line and characters and that sort of thing.

How do you work with the People Can Fly team?

We’ve brought the Warsaw guys out to have them meet the team and learn from the team. Unfortunately, immigration laws say they can’t stay for long. We’ll do the same thing for the Utah studio. I just got the list of all the volunteers who want to make the trip out to Utah now that Gears of War 2 is winding down. Cliff is on top of this every day. I’m on top of the production studio every day.

Do you think this new game will be recognizable as an Epic game?

Will it be recognizable as an Epic game? How do you recognize an Epic game from Unreal Tournament 3 to Gears of War? If you were shown screenshots of Gears of War you’d know it because there’s a particular art look. I would hope there’s some identification with “it looks really cool and it has a high quality bar.”

Are there plans for more growth at Epic through acquisitions?

People Can Fly was completely serendipitous. It was just the right place and the right time. We’d worked with them on Gears PC and they impressed us a lot and we decided to make a deal with them.

Did you learn anything from acquiring People Can Fly that you used when acquiring Chair Entertainment?

Absolutely. The first time we acquired a studio and tried to figure out how the hell to do that while we’re managing our own games, we absolutely made some mistakes. It’s a learning process. Chair was a surprise. It was literally zero to 60 in a week. It was, “Hey, we should do this.” “Alright.” And then suddenly we had another studio. We try to leave them as autonomous as possible because we don’t have a gigantic hierarchy at Epic. We’re making games. We’re learning lessons from our own products and our own publisher relationships across the board and applying them to the next products. All we do is gain experience making games.

How big is Epic now?

We have 110 in Raleigh and there’s about 45 out in Poland. We always have one of our guys out in Poland full-time. We just brought testing internal at Epic. When I joined Epic six years ago there were 25 people there and I started up Psion Studios and we had 20 people there and we brought them together. Suddenly we’re 45 people, which is crazy. We were trying to figure out how to handle two teams. And now I have teams that are made up of 45 people.

And you have bought the new land across the street for future expansion, correct?

We’re definitely expanding. I’ve been hiring 1.5 people a month since 2000. I don’t expect it to change. That’s the speed at which I can find crazy, talented, passionate people. I would hire them faster if I could.

What impact has the new development studios that are sprouting up in the area having on Epic?

It’s great for us to have more developers in Raleigh. It makes people feel more comfortable when moving here. When I went there there were about 120 game developers there. Now it’s over 500. It’s become one of the top four or five game development places in the U.S. And we haven’t lost anyone to any of the new studios that have moved in. We’re a premiere developer, luckily, and all of our profits go to our development staff and so they’ve done pretty well.

Are you now looking at all of your new games as cross-media properties?

Yes. We have the Gears movie in production at Legendary Pictures and New Line Cinema. We’ve been talking to those guys about what attracts you to this and what doesn’t. How can we make sure this is going to work well in a linear story format? I think a franchise game IP that works well in movie and book and comic is going to make a better game even if you never make a movie, a book, or a comic.

How many game IPs does Epic own now?

If you count Chair’s Undertow and Empire, we have five active IPs.