American games publisher Epic Games has announced the closing of a $1bn (~£727m) funding round, bringing the company’s equity valuation to $28.7bn (~£20.87bn).
Sony Group Corporation led the funding round with an investment of $200m (~£145.4m). Other investors include Appaloosa, Baillie Gifford, Park West, KKR, AllianceBernstein, Altimeter, Franklin Templeton, and Luxor Capital, to name a few.
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The funds will be used to continue advancing its ‘technology, entertainment, and socially-connected online services’. This includes cross-over events between popular games and their developers.
Tim Sweeney, CEO and Founder, Epic Games, commented: “We are grateful to our new and existing investors who support our vision for Epic and the Metaverse. Their investment will help accelerate our work around building connected social experiences in Fortnite, Rocket League and Fall Guys while empowering game developers and creators with Unreal Engine, Epic Online Services, and the Epic Games Store.”
According to the release, Epic continues to have only a single class of common stock outstanding and CEO Tim Sweeney will remain the controlling shareholder of the company, despite the new investments. Epic was assisted in the funding round by Credit Suisse and BoFA Securities, as well as Wilson Sonsini Goodrich & Rosati — acting as joint placement agents and its legal counsel, respectively.
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Kenichiro Yoshida, Chairman, President and CEO of Sony Group Corporation added: “Epic continues to deliver revolutionary experiences through their array of cutting edge technologies that support creators in gaming and across the digital entertainment industry. We are excited to strengthen our collaboration to bring new entertainment experiences to people around the world.
“I strongly believe that this aligns with our purpose to fill the world with emotion, through the power of creativity and technology.”
The esports implications of this funding, and its planned use, is significant. Epic Games has strategically manoeuvred itself into a position as a developer, publisher, game engine provider, marketplace, and marketing outlet — creating and maintaining a platform to build other brands.
Epic’s breakout hit, Fortnite has become a hub for not only esports hopefuls, but non-endemic brands and entertainers. In addition to its in-game concert series and Weezer-themed island, the gaming giant has collaborated with the likes of Marvel, Star Wars, Netflix, Jordan, Warner Bros., and so on. Let us not forget that a majority of esports industry revenue is from sponsorship.
Esports Insider says: Creating a ‘metaverse’ that encompasses multiple franchises at once adds the kind of ever-changing variety that has allowed Grand Theft Auto V to dominate streaming viewership for years. Controlling Unreal Engine can’t hurt integration logistics, either. Fall Guys was built in Unity but was recreated in Unreal Engine for a special island in Fortnite. This undoubtedly a huge investment figure and so it’ll be interesting to see how this funding will be utilised.