“Fortnite” creator Epic Games Inc. raised $ 2 billion, the highest for a game company in two decades, from investors including Sony Group corporate
The funding means Epic is now worth $ 31.5 billion, after Sony and Kirkbi A / S, the holding company of the Kirk Kristiansen family, invested $ 1 billion each, according to a statement.
The company, which also includes Walt Disney co.
and the Chinese company Tencent Holdings ltd.
among its investors, it was valued at $ 28.7 billion last April. Its chief executive, Tim Sweeney, remains the company’s majority shareholder.
The company said the funding would advance the company’s goals of building the metaverse – a term used to describe a virtual environment in which people can use digital avatars to work, play and shop – and its continued growth.
“As we reimagine the future of entertainment and games, we need partners who share our vision. We found this out in our partnership with Sony and Kirkbi, “Sweeney said.
The $ 2 billion investment in Epic is the largest in the gaming industry since 2002, according to research firm PitchBook Data Inc. The three largest previous investments were also in Epic, with an investment of $ 1.78 billion. to top the list around Monday.
The latest round of funding comes just days after Epic and The Lego Group, 75% owned by Kirkbi, said they were working together to create a version of the Metaverse that is suitable for children and families.
Epic’s latest valuation will be closely followed by investors following a string of recent gaming deals this year. In January, Microsoft corporate
agreed to buy Activision Blizzard Inc.
in an all-cash deal worth about $ 75 billion. Later that month, Sony’s video game unit said it was buying video game developer Bungie Inc. in a deal worth $ 3.6 billion.
Sony and Kirkbi’s investment in Epic is significant in and of itself and by industry standards “because there are very few billion dollar deals done in [the] gaming industry, “said Martin Yang, executive director of investment bank Oppenheimer & Co. The average investment size in the gaming industry is typically in the tens of millions, with anything in the hundreds of millions considered a rare investment. and large, Yang added.
Josh Chapman, managing partner of Konvoy Ventures, a venture capital firm that invests exclusively in the video game industry, said the size of Sony and Kirkbi’s investment is rare but not out of the question for Epic because it has been raising capital for a long time. .
“This is definitely a very important transaction that makes a lot of sense for Epic using Lego [intellectual property] as well as all of Sony’s assets, ”Chapman said.
The video game market has reached new heights after more people turned to it during the Covid-19 pandemic, prompting companies to take advantage of the recent momentum.
Sony said in late March that its video game unit was bolstering its subscription option, which gained prominence in the industry as a way to lock gamers to specific hardware, franchises, and apps. Microsoft has been offering a unique subscription service since 2017. Both companies see cloud gaming, also known as game streaming, as the future of game distribution.
As Mr. Sweeney’s business grew, he also hired two of the largest technology companies in the world. Epic has had legal disputes with Apple Inc.
and Alphabet Inc.
Google after both companies removed “Fortnite” from their app stores in August 2020. The move came after Epic launched a new way to make in-game purchases that bypassed the cut the tech giants are making to in-app digital transactions.
Last month, Apple argued that a judge’s decision should be overturned in its appeal fight against Epic.
“Fortnite” quickly became a worldwide phenomenon following its 2017 debut. Although it is best known for its free-to-play “Battle Royale” mode, in which 100 players compete as long as only one player remains fighter or team, it’s also a venue for concerts, movies, and areas designated just for socializing. Epic claimed that “Fortnite” had over 350 million registered users in 2020.
Epic said in March that it was allocating the proceeds of “Fortnite” to humanitarian aid for those affected by the war in Ukraine. It said it raised a total of $ 144 million.
Epic was founded in 1991. In addition to the “Fortnite” shooter, it produces the Unreal Engine, a suite of software tools for video game development and production of special effects for TV shows, movies and games and other types of digital content. He also owns the studios behind hit games like “Rocket League” and “Fall Guys: Ultimate Knockout”.
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