Consumer electronics and media group Sony Corporation agreed yesterday to invest $250m in US-based game developer Epic Games at a valuation reported by VentureBeat as nearly $17.9bn.
Epic has created a series of games based on its multiplayer first-person shooting game engine, Unreal Engine. The most popular is Fortnite, which had generated in excess of $4bn of revenue by the end of 2019.
Sony said that, in addition to investing in Epic, it is seeking to expand collaboration between the companies. It recently unveiled the first slate of games for its forthcoming game console, the PlayStation 5, which is due to launch by the end of 2020.
Kenichiro Yoshida, Sony’s chairman and CEO, 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 is no better example of this than the revolutionary entertainment experience, Fortnite.
“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.”
The transaction comes after reports last month that Epic had lined up investment firm KKR and investment managers T. Rowe Price and Baillie Gifford for a $750m funding round that would value it at $17bn.
Internet group acquired a 40% stake in Epic through a $330m investment in 2012. Its backers also include media group Walt Disney and talent agency Endeavor, which was reportedly set to divest $100m of shares in Epic’s next round, though it has not confirmed that intention.
Esports team owner and services provider Axiomatic had joined KKR, Iconiq Capital, Vulcan Capital, Smash Ventures, Kleiner Perkins and Lightspeed Venture Partners to invest $1.25bn in the company in a late 2018 transaction that valued it at almost $15bn.
