Sony spends $1 billion to buy another 3% stake in Epic Games to help ‘build the metaverse’

Sony’s relationship with Epic Games is converging.

Last year, Sony Group Corporation – the parent company of Sony Music Group – spent $200 million to acquire 0.7% A stake in Fortnite gaming company (which now owns BandCamp).

The investment came on the heels of a larger stake acquisition in 2020, when Sony spent $250 million to acquire shares in Epic worth around 1.5% of her business.

Now some big news: Today (April 11), Epic Games confirmed that Sony has agreed to spend 1 billion dollars To acquire an additional stake in her company.

Epic Games says this latest agreement gives it an edge $31.5 billion Equity valuation after investment – which means Sony’s new $1 billion investment has bought it an additional tranche of approx 3.2% of epic.

Let’s do the math: Across its three investments over the past three years ($250 million in 2020; $200 million in 2021; $1 billion in 2022), Sony has spent $1.45 billion to buy shares in Epic Games.

As a result, today Sony owns approximately 5.4% In an interactive entertainment company.

Sony isn’t the only participant in Epic Games’ latest funding round: KIRKBI, the family-owned holding and investment company behind The LEGO Group, has also taken a 3.2% stake with its $1 billion private investment.

Via Sony and KIRKBI, Epic Games raised $2 billion at this $31.5 billion valuation.

(Don’t forget: Tencent is another important contributor to Epic Games, which owns 40% of the North Carolina-based tech company via an investment of $330 million in 2012.)

Epic Games says it will use new venture capital from Sony and KIRKBI “to advance [our] A vision to build the metaverse and support our continued growth.”

In a media statement, Epic said Sony and KIRKBI “highly value both creators and gamers, and aim to create new social entertainment that explores the relationship between the digital and physical worlds.”

Epic still has only one class of outstanding common stock and remains under the control of its CEO and founder, Tim Sweeney.

Kenichiro Yoshida, Chairman, President and CEO of Sony Group Corporation, said: “As a creative entertainment company, we are excited to invest in Epic to deepen our relationship in the metaverse, a space where creators and users share their time.

“We are also confident that Epic’s expertise, including their powerful game engine, combined with Sony’s technologies, will accelerate our various efforts such as developing new digital fan experiences in sports and our virtual production initiatives.”

Søren Thorup Sørensen, CEO of KIRKBI, said: “Epic Games is known for building fun and creative experiences and empowering creators big and small.

“A proportion of our investments focus on trends that we believe will impact the future world in which we and our children will live. This investment will accelerate our participation in the world of digital play, and we are pleased to invest in Epic Games in order to support their continued growth journey, with a long-term focus toward the future. metaverse.”

Tim Sweeney, CEO and founder of Epic Games, said: “As we reimagine the future of entertainment and play, we need partners who share our vision. We’ve found this in our partnership with Sony and KIRKBI.

“This investment will accelerate our work to build the metaverse and create spaces where players can have fun with friends, brands can build creative and immersive experiences and creators can build a community and thrive.”

Investment closing is subject to usual closing conditions, including regulatory approvals.

Last week, Epic Games revealed the latest version of its Unreal Engine – a technical “building block” on which video games can be created.

Epic said that Unreal Engine 5 “offers a suite of groundbreaking features to render real-time worlds in stunning high-resolution detail.”

Epic has confirmed that more than 85 game studios are already part of the UE5 community, including The Coalition, CD PROJEKT RED and Crystal Dynamics, who just revealed they’re building a new Tomb Raider video game using UE5.Music business around the world