News: Investors Bet $1 Billion on Epic Games to Build the Metaverse

Over the past three years, Epic Games has raised billions of dollars in funding on the success of Fortnite as well as Unreal Engine, one of the top 3D engines available for developing games and AR experiences.

But, with its latest massive funding round, it has its eyes set on the Metaverse.

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On Tuesday, Epic Games closed a $1 billion funding round that brings its total equity valuation to $28.7 billion. The company will apply the funding towards future growth opportunities, chief among them Epic's flavor of the Metaverse.

"We are grateful to our new and existing investors who support our vision for Epic and the Metaverse. Their investment will help accelerate our work around building connected social experiences in Fortnite, Rocket League and Fall Guys, while empowering game developers and creators with Unreal Engine, Epic Online Services and the Epic Games Store," said Tim Sweeney, CEO and founder of Epic Games (and NR30 member) in a statement.

Led by a strategic investment of $200 million by Sony Group Corporation, investors participating in the round include Appaloosa, Baillie Gifford, and Fidelity Management & Research Company LLC, GIC, along with funds and accounts advised or managed by T. Rowe Price Associates and Franklin Templeton, among others.

"Epic continues to deliver revolutionary experiences through their array of cutting-edge technologies that support creators in gaming and across the digital entertainment industry," said Kenichiro Yoshida, the CEO of Sony. "We are excited to strengthen our collaboration to bring new entertainment experiences to people around the world. I strongly believe that this aligns with our purpose to fill the world with emotion, through the power of creativity and technology."

The idea of the Metaverse, now synonymous with the AR cloud in the AR industry, has been around for a while. Effectively functioning as a digital copy of the real world, the Metaverse includes such properties as persistent content locked to geographic locations, shared experiences where multiple users see the same virtual content at those persistent locations, and occlusion, where virtual objects interact realistically with the physical environment.

Several AR-focused companies have already begun building out their own AR cloud platforms. Last year, Magic Leap released a technical preview of its own vision of the Metaverse, dubbed Magicverse, but the company's hard pivot to enterprise appears to have stalled those plans.

Meanwhile, Niantic has chugged forward with its Real World platform. Niantic has teased many of the same aspects of the Metaverse for its existing games like Pokémon GO as well as those built by other developers, and, like Epic, has closed funding on the strength of those future experiences.

Apple and Google have also begun to introduce properties of the AR cloud in their respective AR toolkits, ARKit and ARCore.

In his 2019 presentation at SIGGRAPH, Sweeney talked about the technical aspects of Metaverse, particularly the need for common file formats to enable platform-agnostic interactions.

While Epic's vision of the Metaverse begins in its existing ecosystem of gaming, its future trajectory lands in the realm of AR. Take, for instance, the Apollo 11 demo built with Unreal Engine 4 for HoloLens 2. Or Star Wars: Project Porg, also constructed with Unreal but for Magic Leap. Epic Games can already facilitate immersive experiences, but extending them with the shared experiences across platforms and anchored to the real world could be what really pushes AR forward.