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Sony is pumping another $ 200 million into Fortnite maker Epic Games as part of a $ 1 billion financing round

Sony Group Corporation, parent company of Sony Music Group, has invested an additional $ 200 million in Epic Games, the US company behind Fortnite.

The Tokyo-based Sony investment comes within a new $ 1 billion financing round for Epic that was confirmed yesterday (April 13).

As a result of the new funding, Epic Games has achieved an equity valuation of $ 28.7 billion. Sony’s investment of $ 200 million has brought the Japanese company around 0.7% of the Fortnite manufacturer.

This is the second time Sony has invested in Epic Games. In July 2020, Sony announced that it had made its first investment in Epic, pumping $ 250 million into the game company.

A month later, Epic announced that Sony’s investment was part of a total of $ 1.78 billion that gave Epic a valuation of $ 17.3 billion.

This tells us two important things:

  • Sony’s initial investment ($ 250 million at a valuation of $ 17.3 billion) would have given Sony approximately 1.45% of Epic Games. Combined with the new investment, Sony should now own between 2% and 2.5% of the interactive entertainment company.
  • In the past seven months, Epic’s stock valuation has risen a whopping $ 10.4 billion (from $ 17.3 billion to $ 28.7 billion). Sony’s initial investment of $ 250 million in Fortnite is already around $ 416 million.

So Sony has good reason to smile at its investment in North Carolina-headquartered Epic – but not quite as much as Tencent Holdings.

The Chinese giant invested $ 330 million in Epic in 2012, about five years before Fortnite was released.

That investment earned Tencent a 40% stake in Epic, an equity stake now valued at $ 11.5 billion thanks to Epic’s latest funding round.

The CEO and founder of Epic Games, Tim Sweeney, remains the majority shareholder of the company: In a notice published today (April 14), Exane BNP Paribas proposes that Sweeney retain around 45% of the shares in Epic Games, Tencent around 40%.

Announcing the new round of funding, Epic said Sony’s $ 200 million contribution “builds on the already close relationship between them [our] two companies and reinforced [our] shared mission to advance the state of the art in technology, entertainment and socially connected online services. “

“We are excited to intensify our collaboration to bring new entertainment experiences to people all over the world. I strongly believe that this is in line with our goal of filling the world with emotion through the power of creativity and technology. “

Kenichiro Yoshida, Sony Group Corporation

Epic’s Sweeney said, “We are grateful to our new and existing investors who support our vision for Epic and the Metaverse. Your investment will help accelerate our work building connected social experiences in Fortnite, Rocket League and Fall Guys, as well as supporting game developers and developers with Unreal Engine, Epic Online Services and the Epic Games Store. “

Kenichiro Yoshida, Chairman, President and CEO of Sony Group Corporation, said, “Epic continues to deliver revolutionary experiences through its suite of cutting-edge technologies that help developers across gaming and across the digital entertainment industry.

“We are excited to intensify our collaboration to bring new entertainment experiences to people all over the world. I strongly believe that this is in line with our goal of filling the world with emotion through the power of creativity and technology. “

Artists who have played virtual concerts on the Fortnite Metaverse include Travis Scott, Marshmello, Diplo, Steve Aoki and Deadmau5.

In addition to Sony, Appaloosa, Baillie Gifford, Fidelity Management & Research Company LLC and GIC are other investors in the new $ 1 billion financing round for Epic Games.

The round also includes funds and accounts advised by T. Rowe Price Associates, the Ontario Teachers’ Pension Plan Board, as well as funds and accounts advised by BlackRock, Park West, KKR, AllianceBernstein, Altimeter, Franklin Templeton, and Luxor Capital to get managed.

Credit Suisse and BoFA Securities acted as joint placement agents for Epic, and Wilson Sonsini Goodrich & Rosati provided legal advice to Epic.Music business worldwide

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