Sony invests $250 million into Epic Games for minority stake and better collaborations

leon315 · Jul 10, 2020

FAST6191 said:
Was it spare money or some kind of debt and stock leveraged?

When we were watching Sony tumble down the credit ratings and even with charitable considerations (accountants will attempt to minimise profits where they can for tax and dividend purposes after all) make no money and not have the most liquid assets they still had enough longer term assets, patents/IP assets and credit lines that they could have tapped a serious line if they had wanted to.

Anyway
https://www.fool.com/investing/2020/07/09/sony-invests-in-epic-games-creators-of-fortnite.aspx
1.5% seems to be their estimate based on a projected value for Epic (they have not IPOed so we don't have too much to go on, and I have not ran whatever numbers on my end). Impressive considering 2013's grab by Tencent saw some 40% for 330 million.
Not sure what that really gives them other than possibly ensuring they don't get pushed out (I doubt that is enough for truly favourable rates so maybe more "if your system does not get Unreal, or the good Unreal, then you are in trouble"), or maybe have a side workaround for Tencent (and thus China). Epic may also be a reasonable investment (I am still not convinced Fortnite is not a flash in the pan rather than the next great service/competitive/game everybody knows a la Minecraft, Tetris or to a lesser extent COD but if it is the next great baseline game that everybody knows then yeah, plus unreal engine is good stuff for a lot of what Sony do -- films, games, TV, architecture... all use it) and Sony do have an investment division beyond that.

HOLY COW! $ony's 250M JUST to get 1.5% stock compared to Tencent's early 330M investments for 40% of epic stock, was like a legal Bank HEIST!
Anyway all global economy is in vertical drop during pandemic, all except the companies holded by Tencent, for $ony it's more like a fast cash-grab, cauz inevitably the global economy starts to rise up after COVID ends.

CTR640 · Jul 10, 2020

Rail Fighter said:
This must be a really big bed.

Bigger than king size bed? lmfao

FAST6191 · Jul 10, 2020

leon315 said:
HOLY COW! $ony's 250M JUST to get 1.5% stock compared to Tencent's early 330M investments for 40% of epic stock, was like a legal Bank HEIST!
Anyway all global economy is in vertical drop down during cauz of pandemic, all except the companies holded by Tencent, for it's more like a fast cash-grab for $ony, inevetably the global economy starts to rise up after COVID ends.

Rise sure, rise to the level it was at before is a different matter and some speculate the US housing market might be in for another hard time (also not like the US can drop interest rates any further as they are already almost paying investors to take a loan).

Also yeah the money involved in game companies and rates of return can be ridiculous. At the same time how many game companies have you seen go pop over the years? Massive risk, massive reward, fairly uncertain output as well (Epic are hardly a small fry but before Fortnite they were not doing so good, and who really would have thought Minecraft would have done what it did, I am sure we have all watched EA pump out utter dross for years now despite once doing good stuff...)

leon315 · Jul 10, 2020

FAST6191 said:
Rise sure, rise to the level it was at before is a different matter and some speculate the US housing market might be in for another hard time (also not like the US can drop interest rates any further as they are already almost paying investors to take a loan).

Also yeah the money involved in game companies and rates of return can be ridiculous. At the same time how many game companies have you seen go pop over the years? Massive risk, massive reward, fairly uncertain output as well (Epic are hardly a small fry but before Fortnite they were not doing so good, and who really would have thought Minecraft would have done what it did, I am sure we have all watched EA pump out utter dross for years now despite once doing good stuff...)

To be honest, not many. And Big companies like EA, Ubi, ActivisionBlizzard..... to ensure lower risks, had been always milking on old IPs over and over again.

GilgameshArcher · Jul 10, 2020

Snintendog said:
good to know that sony is in bed with the Chinese money laundering scheme over at epic.

any solid concrete and definitive proof of this accusation???

FAST6191 · Jul 10, 2020

leon315 said:
To be honest, not many. And Big companies like EA, Ubi, ActivisionBlizzard..... to ensure lower risks, had been always milking on old IPs over and over again.

You have not seen all the game companies shuttered, bankrupted, taken over, sold for pennies, split up and assets sold... over the years?
Most consider the game industry a brutal affair. I will give that on many occasions the once prominent devs might well have faded into obscurity (maybe with a small auction for the name/logo, office furniture and a few franchises) rather than gone bang in a big way, caused a raft of cancellations and server shutdowns that everybody noted.

Equally the big devs returning to old workhorses time and time again does show in sales and general attention -- 5% profits when your successful competitors are making 50% (or even hundreds) makes you a failure, even if 5% in something boring like paper production would make a wonderful stock in that world.
EA, Ubisoft, ActivisionBlizzard and such do also try to be the bank and have a stable of dozens of "independent" (read do what I say but if you go bankrupt I am not paying for it) devs in the hope that they can take care of some of the basics (here is this nice engine, we have 500 devs floating we can assign to work on something, we also have this nice server setup so you don't have to make your own...), maybe is big enough to allow them to buy in non game IPs (film, TV show, book and whatnot rights) and one of the devs gets the mega smash hit and makes all the money but allows them to limp on by with 5% on the lean years.

MarkDarkness · Jul 10, 2020

Pipistrele said:
Valve was a subject of multiple anti-consumer investigations, criticized by some of the ex-employees for ruthless internal politics, and had a slew of sleazy actions well summarized in Polygon article. CDPR is infamous for overworking their employees beyond reasonable measure and being an avid and consistent defender of crunch culture, going as far as delaying their game to prolong the crunch rather than alleviate it.

Not saying you should hate Steam or GOG, just that I find the "#FuckEpic #YaySteam" loyalty kinda silly and misguided. Companies are not your friends after all.

Eh. Business reality sucks, there will always be issues. This is past midnight, Cinderella. What matters is that on the overall, these companies do much better than Epic's ruthless China-money aggressive takeover of the market without offering a good client for the games.

Valve is THE best company in terms of making prices fair across the developing world in ANY segment, let me garantee you that much. They are also pro-freedom keeping as many games as possible online in face of external pressure.

Epic is yet to show what they are really made of, when China comes to collect.

J-Machine · Jul 10, 2020

of all the... makes it real hard for me to support sony next gen

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