Menu Search AboutEpic Games, the firm behind the smash hit game Fortnite and the widely used Unreal Engine, today announced that it hasraised $2 billion in funding—with ambitions to “build themetaverse.”The funding round was split evenly between previous investor Sony and newcomer KIRKBI, the company behind The LEGO Group, with each firm investing $1 billion at a post-money valuation of $31.5 billion. Epic Games founder and CEO Tim Sweeney remains in control of the private company.“This investment 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,” said Sweeney, in a release.Epic Games last raised funds a year ago, announcing a $1 billion raise in April 2021 at a valuation of $28.7 billion.
The Lego Group, the company announced on Monday. Both firms invested $1 billion each.
The multibillion-dollar investment follows an April 2021 funding round of $1 billion from Sony Group Corporation and other investors.
This time around, Kenichiro Yoshida, chairman, president and CEO of Sony Group Corporation, said in a statement that Epic Games’ expertise, alongside Sony’s technology, will benefit Sony’s creation of digital fan experiences in sports and its “virtual productions.”
“As we reimagine the future of entertainment and play we need partners who share our vision.
Epic Games launched Unreal Engine 5 one week ago.
For their part, Kirkbi’s chief executive Søren Thorup Sørensen noted “a proportion of our investments is focused on trends we believe will impact the future world that we and our children will live in.” The $1 billion stake aligns with that mission, Sørensen said.
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The investment and the executives’ statements all align with Epic’s broader strategy of defining and administering the “metaverse,” a concept that Facebook, Microsoft, and others have latched onto over the past four years.
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As the race to develop the metaverse continues, more companies are investing major funds into what will be the newest iteration of the internet. Jumping into the race isFortnitecreatorEpic Games, which this week received a $2 billion investment from Sony and KIRKBI, the investment company behind Lego.
The two companies split the investment with each party investing $1 billion respectively, aimed at developing a gaming metaverse, something Epic Games has long expressed interest in building. The investment brings Epic Games’ valuation to a massive $31.5 billion after customary closing conditions.
“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.” Kenichiro Yoshida, Sony chairman, president and CEO, said in a statement.
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Fortnite developer announced a $2 billion round of funding, which it says will be used “to advance the company’s vision to build the metaverse and support its continued growth.”
The funds come from Sony, which has previously invested in Epic, and KIRKBI, an investment group operated by the Kirk Kristiansen family, which founded the Lego Group. Just last week, Epic and Lego announced a partnership to build a family-friendly take on the metaverse, though with little in the way of concrete detail. According to a press release, both Sony and KIRKBI invested $1 billion as part of the most recent funding round.
The nebulous metaverse concept has become a popular buzzword, and Epic has been one of the biggest proponents of the idea of a connected virtual world through platforms like Fortnite and its Unreal Engine game-making toolset.
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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.”
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Epic Games already has significant experience with the metaverse between its flagship gameFortniteand virtual concerts from artists likeTravis ScottandMarshmello.
Fortniteis one classic example of a preliminary virtual world similar to what the metaverse is expected to become. The battle royale game allows up to 100 players to fight to the last man in a rich, customizable playfield.
CEO and founder Epic Games, in a statement. “This investment 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.”
Prior to this funding round, Epic raised $1 billion in April 2021, featuring a $200 million Sony Group Corporation investment. Other investors included Appaloosa, Baillie Gifford, Fidelity Management & Research Company LLC, GIC, T. Rowe Price Associates-managed accounts, Ontario Teachers’ Pension Plan Board, BlackRock managed accounts, Park West, KKR, AllianceBernstein, Altimeter, Franklin Templeton and Luxor Capital.
While Epic and Lego haven’t gone into detail about their plans for their proposed metaverse, they outlined three principles that they say will ensure the digital spaces they develop are safe.
The two will work together to make children’s safety and well-being a priority, to safeguard children’s privacy and to equip children and adults with tools that give them control over their digital experience.
Epic said the digital experience will be family-friendly and empower children to become “confident creators.” The companies plan to combine their experience to ensure that this next iteration of the internet is designed with the well-being of kids in mind. There’s no word on what exactly the virtual world would look like or when the two companies plan to launch it.
There’s no clear definition of the “metaverse” just yet, mainly because it doesn’t necessarily exist, but it’s largely seen as a network of virtual spaces that will open up new ways for people to connect online.
Epic rival Roblox’s market capitalization has fallen more than 42% since its direct listing in March 2021, from $45.3 billion to $25.9 billion today.
The new investment supports Epic’s efforts to build “social entertainment” experiences—not just games—for adults and children, in coordination with strategic partners. Sony, which has invested in Epic before, plans to leverage the company’s game engine to create virtual sporting events and other experiences.
Epic and Lego also recently partnered to build digital experiences aimed at children, illustrating a metaverse that would be more focused on creativity and play than traditional gaming. And, in another sign of broadening ambitions, Epic Games acquired music marketplace Bandcamp in March.
Game developers have walked a cautious line in describing their visions for the metaverse.
It’s] about the follow-on and collateral damage as a zillion-dollar industry rife with speculation and hucksterism reacts to frank answers.”When Epic Games announced its last funding round in April 2021,Decryptinquired about its plans to tap blockchains for the metaverse. A representative toldDecryptthat the company didn’t have further comment on the subject, but pointed toan interviewthat Sweeney conducted withVentureBeatin January 2021.In the interview, Sweeney discussed the need for metaverse ecosystems to be built to open standards. He described blockchain technology as “an indisputably neutral, distributed way of expressing individual ownership.” However, he suggested that current blockchain networks do not have enough throughput to handle large-scale metaverse gaming experiences.“We’re far from any sort of blockchain technology that would achieve that,” he said.