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Sony Invests In Epic Games, Creators of Fortnite

By Rich Smith – Jul 9, 2020 at 4:25PM

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$250 million will buy Sony a 1.5% stake in Epic.

Fortnite-maker Epic Games has not conducted an IPO -- and it may never do so. Nevertheless, thanks to a news released Thursday, we know that investors now have another way to own a piece of Fortnite ... by buying Sony (SONY -0.16%).  

Sony announced that it will spend $250 million to acquire a minority interest in Epic Games. Sony didn't say precisely how much of an ownership stake in Epic this will give it, but at a recently minted valuation of $17 billion for Epic, the blue chip entertainment conglomerate's $250 million investment could presumably work out to about a 1.5% stake.  

Fortnite characters.

Image source: Epic Games.

Admittedly, that's just a toehold. Tencent Holdings' (TCEHY 0.96%) 40% stake in Epic -- acquired back in 2012 when Epic was a much smaller company -- remains much larger than what Sony will get. Still, Sony is getting a small sliver of a great growth company, which could help it to stave off an expected slide in its own profits in future years.  

To help rekindle its growth story, Sony notes that it plans to "broaden" its collaboration with Epic "across Sony's leading portfolio of entertainment assets and technology," leveraging "Epic's powerful technology in areas such as graphics ... and Epic's social entertainment platform and digital ecosystem to create unique experiences for consumers and creators."

Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tencent Holdings. The Motley Fool has a disclosure policy.

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