Sony has purchased a $250 million minority stake in Epic Games, makers of Unreal Engine and Fortnite, according to a joint announcement by both companies today.
$250 million isn’t a huge amount relative to Epic Games’ overall value, which a recent report by Bloomberg estimated at over $16 billion, but it’s a lot for one of the major console manufacturers to be pouring into the maker of one of the most popular game development engines and one of the biggest free-to-play battle royale games. At the same time, it’s not clear what this “strategic investment” might lead to in the long run.
“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,” Kenichiro Yoshida, Sony’s CEO, said in a press release. Meanwhile, Epic CEO Tim Sweeney called the partnership an opportunity to “build an even more open and accessible digital ecosystem for all consumers and content creators alike.”
While Epic makes a lot of money from Fortnite’s microtransactions, it’s also been using the game as a platform to cross-promote with other media companies. Marvel’s Captain America is currently a popular skin in the game, and recently Epic worked with film director Christopher Nolan to air some of his biggest movies within the game itself.
This latest investment by Sony also comes after it worked with Epic to create an Unreal Engine 5 tech demo designed around the capabilities of the PS5. “The Unreal Engine 5 demo on PlayStation 5 was the culmination of years of discussions between Sony and Epic on future graphics and storage architectures,” Sweeney said back in May. Fortnite was also the first game to break the cross-play deadlock between Sony and Microsoft, helping the feature to become more common across a range of multiplayer games.
Last month, Bloomberg reported that Epic was looking to raise money by selling off an additional $750 million stake in the company. Back in 2012, Chinese gaming giant Tencent Games managed to buy a 40% stake in Epic for only $330 million.
[Update - 8:51 a.m. 7/10/20]: Following today’s news, Sweeney wrote on Twitter that talks over the $250 million deal didn’t begin taking place until after May’s UE 5 tech demo on PS5. “Serious investment discussions followed from the Unreal Engine 5 demo we showed on PlayStation 5,” he wrote. “I guess they liked it!”