Tuesday December 5, 2023

Epic CEO Testimony Reveals Secret Sony-Epic Deal

  • Sony has invested millions in Epic Games.
  • testimony revealed that the Tokyo-based company has been receiving a piece of the pie.
Fortnite/Design: Alex Brooks
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Epic CEO Tim Sweeney’s testimony in the ongoing Epic v. Apple legal battle revealed that Sony makes Epic pay up for the cross-platform availability of “Fortnite.”

“Fortnite” launched in 2017 and enabled cross-platform play close to a year later, following a holdout by Sony that caused significant consumer backlash.

According to Sweeney’s testimony, Epic has to “pay [Sony] a commission on other platform revenue” if the ratio of payments doesn’t match up with play time. “So if someone were primarily playing on PlayStation but paying on iPhone, they’d [inaudible] compensation to Sony.”

Sweeney said PlayStation is the only platform with this type of arrangement. Sony has been one of Epic’s leading investors over the past year. 

  • August 2020: Epic completes a $1.78 billion funding round that includes $250 million from Sony.
  • April 2021: Epic completes a $1 billion funding round, giving it a valuation of $28.7 billion. This round includes $200 million from Sony. 

“Fortnite” continues to be a runaway success. The game generated $9.1 billion in revenue for Epic from 2018 to 2019, then pulled in $5.1 billion in 2020.

Sony’s gaming division is also hot, as the PlayStation 5 remains in demand. Last week, the company reported $24.4 billion in Game & Network Services revenue for Q1 2021.

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