Epic Games Raises $2B for Metaverse from LEGO and Sony

Game studio and software firm Epic Games announced it raised $2B from KIRKBI, LEGO's holding company, and Sony. KIRKBI and Sony each invested $1B at a $31.5B post-money equity valuation.

Epic Games owns the popular game Fortnite, which peaked a couple years ago but still had 80M users in January 2022, according to an article titled "Is Fortnite Dying?" Epic also makes game development suite Unreal Engine, which has ~15% market share.

Tim Sweeney, CEO of Epic Games, has long been a proponent of crypto. Epic allows crypto games to operate on their platform, while its main competitor, Steam, has banned them. Sweeney is also pro-metaverse. Sweeney's metaverse vision is closer to the general crypto vision than Meta's, but there's still no crypto tie-in necessary for Epic to profit.

Søren Thorup Sørensen, CEO of KIRKBI explained his firm's metaverse investment: "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 announcement follows last week's announcement that Epic Games has partnered with LEGO to develop a metaverse for children.

Kenichiro Yoshida, Chairman, President, and CEO of Sony Group Corporation, said: "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."

Launching a metaverse is expensive and risky. By partnering with Sony and LEGO, Epic Games gains access to valuable intellectual property to draw users into its metaverse. Sony and LEGO appear to desire access to Epic's gaming software expertise. We'll see if Sony and LEGO can stomach Sweeney's views on whether software payment processors deserve 3% or 30% of a transaction.