Epic Games, the company behind Fortnite, has sold a minority stake to Sony. The Japanese conglomerate has invested $250 million for a 1.4 percent stake in the company. With this new investment, Epic Games has raised a total of $1.83 billion to date. The investment is being dubbed as a strategic investment and may not have any direct connection to PlayStation. The deal values Epic Games at $17.86 billion and Epic Games will continue to publish to other platforms.
Both the companies said that the deal helps them to cement their already close relationship. In a statement, they also confirmed that both the companies will work together across technology and entertainment assets. There have been signs of Epic Games working closely with Sony. At the PlayStation 5 reveal, Epic showed the upcoming Unreal Engine 5 for the first time. Epic Games has raised a total of 1.58 billion so far via three previous funding rounds. The valuation of the company has skyrocketed since the release of Fortnite.
VentureBeat notes that Tencent picked a 40 percent ownership stake in 2012 for just $330 million. “Epic’s powerful technology in areas such as graphics places them at the forefront of game engine development with Unreal Engine and other innovations. There’s no better example of this than the revolutionary entertainment experience, Fortnite. Through our investment, we will explore opportunities for further collaboration with Epic to delight and bring value to consumers and the industry at large, not only in games, but also across the rapidly evolving digital entertainment landscape,” said Kenichiro Yoshida, Chairman, President and CEO, Sony Corporation.
“Sony and Epic have both built businesses at the intersection of creativity and technology, and we share a vision of real-time 3D social experiences leading to a convergence of gaming, film, and music. Together we strive to build an even more open and accessible digital ecosystem for all consumers and content creators alike,” said Tim Sweeney, Founder and CEO of Epic.
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Both Sony and Microsoft are set to compete in the console war later this year. Microsoft Xbox Series X seems to be more powerful than Sony’s PlayStation 5 but the latter might have an advantage with this exclusive game title. For Sony to win this upcoming battle, it needs all the allies that it can think of. In Epic Games, it might find the best partner. The unique advantage of Epic Games is that it designs a graphics engine, develops games and publishes them across platforms.
The deal seems to be different from the one Bloomberg reported in June. At the time, it reported that the company is seeking to raise $750 million at a pre-money valuation of $16.3 billion. Post the fund-raising, Epic Games would have a post-money value of $17 billion. GamesBeat further notes that Epic Games reported revenue of $4.2 billion and $730 million in EBITDA earnings in 2019. It’s revenue is forecast to reach $5 billion in 2020 and the pandemic has resulted in growth in time spent by players on the platform.
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