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

Sony’s relationship with Epic Games is getting even closer.

Last year, Sony Group Corporation – parent company of Sony Music Group – spent $200 million to acquire a 0.7% stake in Fortnite-making game company (now owns BandCamp).

This investment follows a larger stake acquisition in 2020, when Sony spent $250 million to acquire shares of Epic worth around 1.5% of his business.

Now for more big news: today (April 11) Epic Games confirmed that Sony has agreed to spend $1 billion to acquire an additional stake in his company.

Epic Games says this latest deal gives it a $31.5 billion post-investment stock valuation – meaning that Sony’s new $1 billion investment bought it an additional slice worth around 3.2% from Epic.

Let’s do the math: of 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, Sony now owns approximately 5.4% in the interactive entertainment business.

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 acquired a ≈3.2% stake with its own investment from a billion dollars.

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

(Remember: another big player in Epic Games is Tencent, which owns 40% of the North Carolina-based tech company through a $330 million investment made in 2012.)

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

In a statement to media, Epic said it, Sony and KIRKBI “place a high value on creators and gamers, and aim to create new social entertainment that explores the connection between the digital and physical worlds.”

Epic continues to have only one class of common stock outstanding and remains controlled by its CEO and founder, Tim Sweeney.

Kenichiro Yoshida, 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 realm of the metaverse, a space where creators and users share their time.

“We are also confident that Epic’s expertise, including its powerful game engine, combined with Sony’s technologies, will accelerate our various efforts such as the development of new digital experiences for fans in sports and our production initiatives. Virtual.”

Søren Thorup Sørensen, CEO of KIRKBI, said, “Epic Games is known for creating fun, creative experiences and empowering creators young and old.

“Part of our investments are focused on trends that we believe will impact the future world that we and our children will live in. This investment will accelerate our commitment to the world of digital gaming, and we are excited to invest in Epic Games to support their journey of continued growth, with a long-term focus on the future metaverse.

Tim Sweeney, CEO and Founder of Epic Games, said, “As we reimagine the future of entertainment and gaming, we need partners who share our vision. We found it in our partnership with Sony and KIRKBI.

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

Closing of the investment is subject to customary closing conditions, including regulatory approvals.

Epic Games last week unveiled the latest iteration of its Unreal Engine – a technological “building block” on which video games can be created.

Unreal Engine 5, Epic said, “introduces a collection of groundbreaking features for rendering real-time worlds in incredible high-fidelity detail.”

Epic has confirmed that over 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 with UE5.The music industry around the world