LOS ANGELES: Sony is making a strategic investment of US$250mil in Epic Games, the maker of massive hit game Fortnite, to acquire a minority interest in the gaming company.

The companies said the investment “allows Sony and Epic to aim to broaden their collaboration across Sony’s leading portfolio of entertainment assets and technology”, as well as across Epic’s “social entertainment platform and digital ecosystem to create unique experiences for consumers and creators”. Sony’s investment in Epic is subject to customary closing conditions, including regulatory approvals.

According to Sony, the deal gives it 1.4% stake in Epic, implying a valuation for Epic Games of nearly US$17.9bil . (Epic declined to comment on terms of the Sony investment.) Sony’s investment does not require Epic to commit to any sort of exclusive distribution arrangement for PlayStation. Other investors in privately held Epic include Disney and China’s Tencent Holdings.

Through Sony’s investment in Epic Games, the companies will look for opportunities to collaborate in games - as well as other areas of digital entertainment, Kenichiro Yoshida, Sony Corp chairman, president and CEO, said in a statement.

“Epic’s powerful technology in areas such as graphics places them at the forefront of game engine development with Unreal Engine and other innovations,” Yoshida said. “There’s no better example of this than the revolutionary entertainment experience, Fortnite.”

Tim Sweeney, founder and CEO of Epic, commented, “Sony and Epic have both built businesses at the intersection of creativity and technology, and we share a vision of real-time 3D social experiences leading to a convergence of gaming, film, and music. Together we strive to build an even more open and accessible digital ecosystem for all consumers and content creators alike.”

Fortnite has been building itself into more of an entertainment destination with the game’s Party Royale, which Epic Games calls “a new experimental and evolving space”. That has included screenings of three Christopher Nolan films on June 26 under an agreement with Warner Bros, and Fortnite also has featured virtual concerts from artistes including Travis Scott - who broke attendance records - Marshmello and Deadmau5.

This past May, Epic Games said that Fortnite had topped 350 million players worldwide. In 2019, Fortnite raked in US$1.8bil , making it the No 1 game title worldwide in terms of revenue, according to research firm SuperData.

 - Reuters