Sony Corporation and Epic Games Inc. announced that Sony has agreed to make a strategic investment of $250 million to acquire a minority interest in Epic though a wholly-owned subsidiary of Sony. The investment cements an already close relationship between the two companies and reinforces the shared mission to advance the state of the art technology, entertainment, and socially-connected online services.
The investment allows Sony and Epic to broaden their collaboration across Sony’s leading portfolio of entertainment assets and technology, and Epic’s social entertainment platform and digital ecosystem to create unique experiences for consumers and creators. The closing of the investment is subject to customary closing conditions including regulatory approvals.
Venture Beat reported that the relationship between Epic and Sony was strengthened when Epic first showed the Unreal Engine 5 graphics running on a PlayStation 5. Previous to Sony’s investment, Epic raised $1.58 billion in three previous rounds of funding. In 2012, Epic received a $330 million investment from Tencent for a 40% ownership stake.
Epic Games is the developer and publisher of Fortnite, a game that is incredibly popular. This popularity was enhanced by Ninja (Tyler Blevins) who started streaming Fortnite on Twitch, then moved to Mixer, and then moved to YouTube. Fortnite, according to Hollywood Reporter, has 350 million registered users.
So, what is Epic getting from the Sony investment? Business Insider reported that Sony’s $250 million investment puts Epic’s current valuation at just under $18 billion.
What is Sony getting from this investment? Hollywood Reporter suggests that Sony will benefit from Epic’s Unreal real-time gaming engine, which is growing in use in Hollywood animation, VFX and production communities. Unreal was used in Jon Favreau’s The Mandalorian. So, the collaboration between Sony and Epic could benefit Sony Pictures.