Sony has bought a 1.4 percent minority stake in Epic Games, with an investment of $250 million. With this investment, Epic has gained a valuation of $1.83 billion to date.
Epic Games has been known for the creation of many hit titles like, “Fortnite” and the “Gears of War” franchise and is a major player in the video game industry. The company also runs an online video games store, competing with Steam.
With this investment, Sony has reinforced its close relationship with Epic Games
This deal has reinforced the close relationship between the two companies and focuses on their shared goal of advancement in the state of the art technology, social entertainment platforms, and digital ecosystem. The relationship between these two companies was brought to light in May when Epic Games first released the Unreal Engine 5 graphics running on PlayStation 5.
Epic has confirmed that it will not be exclusive to Sony and will still be able to publish on other platforms since Sony has not bought a controlling stake in the company. Epic is also strongly backed by another household name in the industry, Chinese firm Tencent. In 2012 the company had received $330 million investment from Tencent for a 40% ownership stake.
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“Focus on exploring further opportunities for collaboration”, as stated by both the CEO’s of Sony and Epic Games”
Sony CEO Kenichiro Yoshida stated that Epic’s powerful technology in areas such as graphics places them at the forefront of game engine development with Unreal engine and other innovations. He also stated that through this investment, Sony would like to explore opportunities for further collaboration with Epic and bring value customers not only in the gaming domain but across rapidly evolving digital entertainment landscape.
Epic CEO Tim Sweeney said in his statement that both Sony and Epic have created businesses at the intersection of creativity and technology and they share a vision of real-time 3D social experiences leading to convergence of music, films, and games. This music reference by Mr. Sweeny seems to be a reference to the recent Travis Scott concert in Fortnite, which drew more than 27 million people.
Both companies have stated in their announcement that this investment is subject to regulatory approvals.
Sony’s PlayStation 5 – The Next In-Line for Launch
This announcement has come at a time when Sony is gearing up to launch its PlayStation 5 later this year. Also, the Japanese entertainment giant has been intensifying its battle with Microsoft by convincing gamers to buy its next-generation gaming device over the upcoming Xbox series X.