Epic Games said it raised $2 billion in a funding round that including
Sony Group and LEGO Group owner Kirkbi as investors. The company, best known for creating the Fortnite game and the Unreal Engine development tool, hit a private valuation of $31.5 billion.
Sony (ticker: SONY) and Kirkbi each invested $1 billion, Epic said. CEO and founder Tim Sweeney still has a controlling stake in the firm, the company said.
Epic announced a $1 billion round that valued the firm at $28.7 billion in April 2021. The higher valuation is a good sign for Epic, given how public markets soured on videogame companies in the past year.
Unity Software (U) stock is down 7.6% in the past year, while
Electronic Arts (EA) stock is down 13%. Even shares of
Activision Blizzard (ATVI), which in January saw shares surge on a proposed deal to be acquired by
Microsoft (MSFT), are down 17% in the past year.
The $31.5 billion figure compares to EA’s recent market capitalization of $34.5 billion and
Take-Two Interactive Software’s (TTWO) recent capitalization of $16.2 billion. The latter has a $12.7 billion cash-and-stock deal to acquire
Zynga (ZNGA) that the firm expects to close in the first half of this calendar year.
Epic CEO Sweeney, who has a been a vocal metaverse proponent and a critic of closed platforms and App Store fees, said in the news release that both partners share in his vision for the future of entertainment.
“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,” Sweeney said.
Epic’s most popular game is the free-to-play phenomenon Fortnite, but it also licenses to outside developers its Unreal Engine game-making tool. The tool is a rival to Unity’s own offering.
Write to Connor Smith at [email protected]