Sony has bought a $250m stake in the company behind Fortnite, as the Japanese group prepares for the launch of its PlayStation 5 console with another big bet that games, music, film and other entertainment will converge around social media.
Sony will acquire a stake of about 1.4 per cent in US-based Epic Games in return for its investment. That is not enough to secure exclusive distribution rights for Epic’s main titles, but it signals that the companies will deepen co-operation as the coronavirus pandemic boosts appetite for digital escapism.
The deal follows the success in April of a virtual concert tour by rapper Travis Scott held inside the virtual world of Fortnite — a multiplayer combat game that has evolved into a social media platform. One concert drew a record 12.3m live viewers and led to a fourfold increase in streaming of the artist’s latest music video.
Music industry executives, hit by a halt in live events around the world since March, are more closely engaging in how to use forums like Fortnite as an alternative.
David Gibson, an analyst at Astris Advisory Japan, pointed out that Sony’s investment had come from the wider group and not its PlayStation division. He said that is a sign that the company hopes to push more of its music, movies and other content into the Fortnite world.
“If you’re Sony, don’t you want your artists to be the first to get into the virtual Fortnite world of entertainment ahead of Warner and other competitors?,” Mr Gibson said. “If $250m gets them a chance to move first on this, then strategically it is the right move for Sony.”
Sony said late on Thursday that it and Epic would “broaden collaboration” on new experiences for consumers and creators. “We share a vision of real-time 3D social experiences leading to a convergence of gaming, film, and music,” said Tim Sweeney, chief executive of Epic, in a statement.
The investment in Epic, known for technology that powers virtual reality content, also comes as Sony intensifies efforts to perfect its VR headsets and capture demand from gamers spending more time at home due to coronavirus-related restrictions.
Sony chief executive Kenichiro Yoshida told the Financial Times in May that the challenge for the company — which owns some of the world’s largest film, music and games companies — was how to deliver entertainment choices remotely “that are both immersive and real time”.
Citigroup recently estimated that it expects the overall VR market will be worth $154bn by 2030 compared to just $7bn last year, boosted by demand not only for games but for video content including films and television programmes.
Sony is the biggest player in that market, having sold more than 5m units of its PlayStation VR since its launch in 2016. Citigroup analyst Kota Ezawa expects Sony to launch the PS VR2 next year and predicts that sales will increase to 6.8m units by 2030 as it also targets the use of VR in healthcare and online education.
Sony has focused on expanding its entertainment portfolio in recent years. Sony Pictures Television has in the past two weeks bought Eleven, the maker of the hit Netflix show Sex Education, and formed a joint venture with France’s Satisfaction Group. In April, it invested $400m for a minority stake in Chinese online video and mobile games group Bilibili.