Sony announced Thursday that it invested $250 million in Epic Games, the creator of Unreal Engine and Fortnite. To put that into perspective, this means that Sony has acquired a 1.4% stake in the company, which is valued at $17.86 billion.
This is a smart move on Sony's part going into the launch of the PS5.
If $250 million sounds like a lot of money to you, it's just a drop in the bucket for Sony, whose market cap is nearly $80 billion, according to Forbes. To put the deal in perspective, back in 2012 when Tencent invested $330 million in Epic Games, it gained a 40% stake in the company, which was valued at $825 million at the time.
Whatever you think of Epic Games — trust me, I'm not a huge fan of them either — this is a smart move on Sony's part going into the launch of the PS5.
Remember when Epic unveiled Unreal Engine 5 a few months ago? That was running entirely on Sony's PS5 in real-time. This tech demo demonstrated two key new features in Unreal Engine 5: Lumen and Nanite.
Here's what we learned at the time from that reveal: "Lumen is a fully dynamic global illumination solution that immediately reacts to scene and light changes. Nanite is virtualized micropolygon geometry that allows artists to create incredible geometric detail. Film-quality source art comprising hundreds of millions or billions of polygons can be imported directly into Unreal Engine, and it will just work."
In other words, Unreal Engine 5 will allow developers to create assets with immense detail easily and the PS5 will be able to render it without the need for long loading times. These improvements are crucial for next-generation games when it'll take a lot more than a bump in resolution and improved frame-rates to impress people.
A close relationship between Sony and Epic Games means that PlayStation can take advantage of this technology to its fullest, and we know that both companies admire each other's tech. Epic CEO Tim Sweeney praised the PS5 during Unreal Engine 5's reveal, specifically mentioning the console's SSD.
This really is a generational leap, or more, in technological capabilities. The hardware that Sony is launching is absolutely phenomenal. Not only an unprecedented amount of graphics power but also a completely new storage architecture that blows past architectures out of the water, and is far ahead of even the state-of-the-art and highest-end PCs you can buy.
While this opens up a lot of doors for Sony going forward, don't expect all PlayStation games to use Unreal Engine 5 over night. Plenty of Sony's in-house engines, like Guerrilla's proprietary Decima engine, have been fine-tuned over the years to do exactly what developers want them to. These engines won't go away. Unreal Engine 5 will just complement them in a case-by-case scenario. These two companies will share their knowledge and work more closely to make the best products possible.
And don't worry about Unreal Engine 5 games not coming to Xbox Series X in the future. Epic Games is still allowed to publish on other platforms and its engine can be licensed out to other companies as well.
What's also interesting is that this deal encompasses more than just games. VentureBeat's initial report notes that Sweeney said that both companies "share a vision of real-time 3D social experiences that will lead to a convergence of gaming, film, and music." Fortnite is known to host concerts and movies in-game, like performances from Travis Scott and movies from Christopher Nolan, so we can see more efforts outside of just game design.
I know I'm not the only person who gets an uneasy feeling whenever Epic Games is mentioned, and I get it — Epic has some predatory practices when it comes to Fortnite, it's fair to question the ethics behind Epic's collection of user data, and the Epic Games Store pays for exclusivity deals that no one likes. You might not want to see Sony working with it, but the reality is that this relationship benefits both companies, and players should see those benefits as a result.