Epic Games’ valuation rose to $31.5 billion following $2 billion in funding from Sony and the owner of The Lego Group, KIRKBI, in April 2022 to develop its metaverse. This deal further demonstrates that Epic is in the vanguard of metaverse development, and these partners will boost its competitive edge. Sony and Lego will improve Epic’s abilities to expand into diverse age groups and incorporate a variety of experiences on its metaverse.
Epic Games is renowned for Fortnite, a game with over 350 million users worldwide, but its success is attributable to the power of Unreal Engine. This engine, which is the foundation of Fortnite, demonstrates Epic’s capabilities in computer graphics, 3D visualization, augmented reality (AR), and virtual reality (VR)—which are essential for the metaverse. The company is working to “build one set of digital assets that can be deployed to film and television and in real-time games, scaling from high-end consoles down to low-end smartphones,” according to Epic’s CEO Tim Sweeny. The latest funding is likely to be invested to improve the Unreal Engine and create new experiences.
Epic’s metaverse ambition is on the rise, supported by a strong strategy
Epic Games is a strong advocate of the metaverse and a pioneer of this theme. It has organized successful virtual music concerts and movie showings within Fortnite to demonstrate that such events could attract millions of people seeking entertainment in new formats. Such live events also serve as a channel for advertisers and celebrities to engage with their customers and fans. While many of these events are marketing initiatives to exhibit Epic’s technological prowess, they also demonstrate consumer interest in using virtual worlds for real-life activities. Epic’s massive user base allows it to test new experiences and develop an appealing metaverse offering in the future.
Sweeney says, “The next three years are going to be critical for all of the metaverse-aspiring companies like Epic, Roblox, Microsoft, Facebook [now Meta]. It’s kind of a race to get to a billion users, whoever brings on a billion users first, would be the presumed leader in setting the standards.” Therefore, Epic is investing in expanding the popularity of its metaverse platform (i.e., Fortnite) and advancing the Unreal Engine, which offers tools and technologies for creating experiences on Fortnite. It has acquired firms like Twinmotion, Cubic Motion, and Hyprsense to bolster the Unreal Engine, and obtained SuperAwesome, a specialist firm that creates safe digital engagement for children under 16.
Metaverse for children is a brilliant idea, but Epic has hurdles to jump
Epic plans to add children into its ecosystem, recognizing their influence on Roblox’s growth in the past few years. In April 2022, Epic partnered with Lego to create a metaverse for children. This is a big move as safety in the metaverse is a critical concern. Many parents are skeptical as it is difficult to ensure that children remain within age-appropriate experiences.
Reportedly, Epic and Lego will build the platform from scratch and keep it separate from Fortnite, which caters to older users. While the plan and outlook are yet unclear, Epic must incorporate settings like safe search, profanity filters, and parental monitoring to create its appeal. The success of this platform could set the standards for children-centric metaverse experiences in the future. Failure to create a safe, toxicity-free offering will impact Epic’s metaverse ambitions and reputation.
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A win-win strategy
Sony’s involvement in the metaverse is limited, but its VR expertise and the vast library of games and movies position it as a strong player in the theme. Its investment in Epic is thus a potential response to Microsoft that is firming up its metaverse ambitions. Epic, on the other hand, will benefit from Sony’s content and global user base. Thanks to Sony’s PlayStation, Epic’s metaverse will be a cross-platform offering.