Lego And Sony Throw $2B At Epic Games For Tim Sweeney To Build A Metaverse
Epic Games has made it be known it is building its own version of the metaverse and that's all it took for Sony and Lego's parent company Kirkbi to reenact the "Shut up and take my money!" meme. Sony and Kirkbi participated in a $2 billion round of funding, with each company committing to ponying up $1 billion for the endeavor.
This is actually Sony's second round of investment into Epic Games. Back in 2020, Sony secured a $250 million minority stake into the Fortnite developer, well before the idea of a metaverse had entered mainstream consciousness. At the time, however, Epic CEO Tim Sweeney said Sony and Epic "share a vision of real-time 3D social experiences."
While not a new term, Facebook more recently popularized the idea of a metaverse, going so far as to rebrand itself as Meta. Facebook is now part of Meta, just as Google is part of Alphabet.
"As a creative entertainment company, we are thrilled to invest in Epic to deepen our relationship in the metaverse field, a space where creators and users share their time." said Kenichiro Yoshida, Chairman, President and CEO, Sony Group Corporation. "We are also confident that Epic’s expertise, including their powerful game engine, combined with Sony’s technologies, will accelerate our various efforts such as the development of new digital fan experiences in sports and our virtual production initiatives."
Here's a clip from the funding round...
Even with the additional $1 billion from Sony and another $1 billion from Lego's parent firm, Epic still has a single class of common stock outstanding and remains controlled Sweeney. That means its largely his vision Sony and Kirkbi are investing in, though we imagine this will be at least a partially collaborative process.
The announcement also comes less than a week after Lego and Epic announced a partnership to build a metaverse of kids. Detail are light, but it's being billed as an immersive and creatively inspired experience for kids of all ages. We'll have to wait and see what exactly that translate into.
"Epic Games is known for building playful and creative experiences and empowering creators large and small," said Søren Thorup Sørensen, CEO, Kirkbi. "A proportion of our investments is focused on trends we believe will impact the future world that we and our children will live in. This investment will accelerate our engagement in the world of digital play, and we are pleased to be investing in Epic Games to support their continued growth journey, with a long-term focus toward the future metaverse."
As with the previous announcement with Lego, this one is short on details. There's no mention of what exactly Epic Games is planning, only that this $2 billion cash infusion will "accelerate our work to build the metaverse and create spaces where players can have fun with friends," according to Sweeney. He also referenced brands building creative and immersive experiences with players.
The $2 billion funding round values Epic Games at $31.5 billion. It also underscores the confidence companies have in future web experiences, which is essentially what the metaverse boils down to.