Sony Invests $250 Million in Epic Games

Earlier this month, Sony Corp (SNE) announced that it was taking a minority stake in Fortnite maker Epic Games in a significant investment deal. This announcement was made amid Sony’s plan to launch its PlayStation 5 console later in the year to compete with Microsoft’s Xbox.

The $250 million investment was made behind Epic’s “Fortnite” which will give Sony a minority stake in the company. The two companies have said that this is a strategic deal that will expand the existing relationship between them.

Epic Games is a game maker giant in the gaming industry, popular for hit games like “Fortnite” and “Gears of War” amongst others. The company is also responsible for creating the Unreal game engine software that powers many top games in the world. Epic also runs an online video game store that competes with top video gaming giants like Steam.

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

Fortnite stands as the world’s largest game with over 2.5 billion friend connections and more than 350 million accounts. According to both companies, the investment is subject to regulatory approvals. Sony also said that the deal was very significant for Sony as it joins forces with one of the world’s top gaming companies. “Through our investment, we will explore opportunities for further collaboration with Epic to delight and bring value to consumers and the industry at large, not only in games but also across the rapidly evolving digital entertainment landscape.”

Sony’s move towards teaming up with Epic games while it amid launching its next rated PlayStation 5 console is to reassure its consumers that it is a better option for Microsoft’s Xbox. According to five-star analyst Andrew Uerkwitz, Sony is well-prepared to storm the gaming industry and market once again with its PS5 console.

“Starting string in games is more critical than ever in next-gen competition. Xbox not only builds momentum with its proactive series of events and management interviews but also plays serious catch-up on the breadth and depth of its exclusives,” He Uerkwitz wrote in a note. “Sony needs to assure players that it is still the superior console platform with unique games.”

Epic, which is a privately-owned gaming brand is also backed by Tencent, a China-based tech giant.