Ahead of the launch of Sony’s PlayStation 5, the Japanese company has invested $250m into Epic Games, the company behind Fortnite and the popular Unreal Engine.
On Thursday (9 July), Sony announced that it has made a strategic investment of $250m to acquire a minority interest in Epic Games.
In a statement, the two companies said that the investment “cements an already close relationship” between them, reinforcing their mission to advance the state of the art in technology, entertainment and socially connected online services.
The investment in Epic Games, which is the company behind Fortnite, comes ahead of the release of Sony’s PlayStation 5 later this year.
Epic Games also created the Unreal Engine, a game engine that has been used to build dozens of games, including The Outer Worlds, PlayerUnknown’s Battlegrounds and Batman: Arkham Asylum.
As we enter the next generation of video game consoles, Sony and Epic Games have said that they aim to broaden their collaboration across Sony’s portfolio of entertainment assets and technology, and Epic’s social entertainment platform and digital ecosystem to create unique experiences for consumers and creators.
Kenichiro Yoshida, chair, president and CEO of Sony Corporation, said: “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.”
Yoshida said that through the investment, Sony hopes to bring value to consumers and the industry at large, not only in games, but across the rapidly evolving digital entertainment landscape.
The latest investment from Sony brings the total raised by Epic Games to $1.83bn to date. Sony’s latest investment values the company at around $17.8bn.
The investment highlights the video game company’s growth over the last decade as, in 2012, Epic Games received a $330m investment from Tencent for a 40pc ownership stake.
Following Sony’s investment, Epic Games confirmed that because Sony has not acquired a controlling stake in the company, the game and software development business will still be able to publish on other platforms.
Tim Sweeney, founder and CEO of Epic, said: “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.”
Back in June, it was reported that Epic Games was seeking to raise $750m at a pre-money valuation of $16.3bn, with the hopes of bringing the company’s valuation to $17bn. According to VentureBeat, the investment from Sony is unrelated to the funding plans announced earlier this summer.
The venture capital firms investing in the company’s $750m funding round include T Rowe Price Group and Baillie Gifford, as well as existing investors KKR & Co, according to Bloomberg.
In recent months, Epic Games has seen increased revenue due to a surge in gaming caused by the Covid-19 pandemic.
According to VentureBeat, Fortnite revenue hit $400m in April alone, with players spending 3.2bn hours in the game in a single month.
In May, when the Unreal Engine 5 was announced, Sweeney said that the company had been working “super-closely” with Sony on the storage architecture and other elements of Unreal Engine 5.
Sweeney complimented Sony’s latest console, stating: “The storage architecture in PlayStation 5 is far ahead of anything that you can buy in any PC for any amount of money right now. It’s great to see that sort of innovation. It’s going to help drive future PCs.”