Epic Games, the U.S. games development company behind the smash hit cross-platform shoot-em-up Fortnite has raised $2 billion in fresh capital to fund an assault on the metaverse. The equity capital round has been financed by Sony and Kirkbi, the holding company behind the Lego Group.
Epic, which was founded in 1991 also develops the popular Gears of War series of video games. However, prior to the massive success of Fortnite, the company was best known for its Unreal Engine video games engine which helps games designers create 3D “photoreal” visuals and “immersive experiences”.
Epic, which is still privately held, was reportedly valued at $31.5 billion during the private investment round. Founder and chief executive Tim Sweeney is still estimated by Forbes to own around 28% of the company. The Chinese mobile gaming giant Tencent owned around 40% of the company before the latest raise.
Sony and Kirkbi are both investing an equal $1 billion with Epic announcing the fresh funds will be put to work to “advance the company’s vision” to build the metaverse. The metaverse is the new virtual reality realm that allows users in different physical locations to interact with each other through VR headsets.
Sweeney commented the capital raised
“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”.
Sony is investing heavily in the metaverse space, which it appears to see as the future direction of the gaming sector it has been a major player in for decades thanks to its PlayStation games consoles. However, the metaverse’s potential is seen as extending far beyond gaming and social interaction.
VR interaction in the metaverse has the potential to reshape the workplace and further reinforce the remote work trend. Expert surgeons could use the technology to oversee surgery taking place in another city or even on the other side of the world.
Sony also invested $3.6 billion in the video games publisher Bungie earlier this year. Bungie is behind the popular Halo and Destiny franchises and like most in the gaming industry has ambitions in the metaverse.
The race for position in what is expected to become a hugely valuable new market can be seen in the scale of the investment in the metaverse. Companies tooling up with both the cash and tech skills to be competitive is leading to a wave of consolidation sweeping the industry. In January of this year, Take-Two Interactive reached a $12.7 billion agreement to purchase Zynga and Microsoft announced a huge $68.7 billion deal to buy Activision Blizzard.
Kirkbi explained its decision to invest $1 billion in Epic as part of a strategy
“focused on trends we believe will impact the future world that we and our children will live in”.