Forums - Sony Discussion - Sony invests $250m in Epic Games to acquire a minority stake

DonFerrari said:
sales2099 said:

It’s not the same, MS buys studios to combat Sony’s gaming monopoly. Sony buying studios is meant to maintain their monopoly. Not that I’m against monopolies (looking at MSs OS in case you retort with that) but I do believe we all win if there’s enough marketshare to go around like 360/PS3. Xbox getting scraps like this gen will just make another Nintendo which is forced to make underpowered yet unique hardware to stay in the game. I prefer Xbox to remain a “traditional” competitor in the gaming space. 

What monopoly?

If you are talking gaming as a whole then Sony revenue is like what 5% of the total revenue in gaming?

If you want to exclude smartphone gaming and PC and just put on dedicated devices, then perhaps Sony revenue is like what 20% of the total revenue?

Even if you then want to consider only the console gaming and exclude third party for shit and giggles you would have Sony at 70% against MS 30%?

There isn't any way you can put gaming as a Sony monopoly.

Console gaming, if you weren’t clear on my perspective. Total games sold (1st and 3rd) ratios between PS4/Xbox is staggering. In terms of traditional console gaming Sony gets the lions share and Xbox gets the scraps. Seems obvious to me that MS seeks to disrupt that next gen, and they should. 

Still support the idea of the ecosystem overtaking PS, but the console space has plenty market share in itself to take back cant deny that. 



 

 

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sales2099 said:
DonFerrari said:

What monopoly?

If you are talking gaming as a whole then Sony revenue is like what 5% of the total revenue in gaming?

If you want to exclude smartphone gaming and PC and just put on dedicated devices, then perhaps Sony revenue is like what 20% of the total revenue?

Even if you then want to consider only the console gaming and exclude third party for shit and giggles you would have Sony at 70% against MS 30%?

There isn't any way you can put gaming as a Sony monopoly.

Console gaming, if you weren’t clear on my perspective. Total games sold (1st and 3rd) ratios between PS4/Xbox is staggering. In terms of traditional console gaming Sony gets the lions share and Xbox gets the scraps. Seems obvious to me that MS seeks to disrupt that next gen, and they should. 

Still support the idea of the ecosystem overtaking PS, but the console space has plenty market share in itself to take back cant deny that. 

When you cut it in a way to only count 2 competitors one having twice the marketshare of the other doesn't configure a monopoly.

As I said there is no way you can twist it to make it seem like a monopoly, even more when from the 1.5B SW sold on PS4 sony probably don't have 10% of that.

The only "monopoly" one can spin on gaming would be dedicated hardware for game that can be played portably, then SW would be 100% of the HW sold and on SW probably over 50%.



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

V-r0cK said:
twintail said:

Tim Sweeney (@TimSweeneyEpic) Tweeted: @SenninSage Yes, here’s what I said back in May below. Serious investment discussions followed from the Unreal Engine 5 demo we showed on PlayStation 5. I guess they liked it!

https://t.co/c9x4q1v87P https://twitter.com/TimSweeneyEpic/status/1281365385187602433?s=20

Well that clarifies it, Epic just did a really good job impressing Sony so much that Sony wanted in on them.

Well just looking back as how things were between SNY and Epic around the Fortnite cross play dilemma, this looks to be a pretty big change in whatever relationship exists between them now.

It wouldn't be surprising, as MS was touting how great they were for getting ahead of things in terms of gaming advancement, by working with Epic on Fortnite cross play. We all know what that led to. The way I see it, it would be fair game for SNY to be using this as PR against the competition. A little Epic revenge perhaps? Tit for tat? Maybe SNY management hasn't played TLOU2 or doesn't get the point about revenge?

I'm mostly just joking about TLOU2 comment, and was mostly joking about the prior ring cost remark.



sales2099 said:
twintail said:

UE5 tech is going to be incredibly important going forward. This isn't just for gaming. This is about helping all facets of Sony's business where UE5 can be applied. Don't forget that Sony has a TV division, and even PlayStation has a new TV initiative. 

lol, it's incredible how petty you always are about this.

Who cares if MS has more studios using UE than Sony does. Using their engine doesn't automatically mean you have some better working relationship with Epic. It literally means that MS is more willing to use the engine. A working relationship that benefits both parties requires interaction between said parties.

And guess what? That is what Epic and Sony have had for the last 4 or so years. 

https://www.gamesradar.com/uk/epic-reveals-how-its-been-working-with-sony-for-years-on-unreal-engine-5/

A minority stake of 1.4% now, and not the 4 years working closely with another, is the only reason for Epic is talking up PS5?

Petty, indeed. 

As I said, it’s weird they are partnering when Sony has little interest in actually using the engine. The demo highlights how it takes advantage of PS5s tech...this only makes sense if they have games in development that use UE5. Which they don’t. Otherwise if the games are multi plat development goes to the common denominator (PCs without SSD). Again, why partner up of one partner couldn’t care less about the engine? 

Which leads me to believe it’s a short term PR boost and someone else long term like Epic Store exclusivity. That demo should have got Xbox gamers excited due to the actual studios that are making next gen games with UE instead the PR went in another direction. It’s fair game if you spend $250 million, so really I can’t complain beyond expressing my annoyance. 

I feel that to the focus on UE is narrowing our thinking , it's been pointed out that Sony mainly uses in house game engines with great success on both a technical and sales level, so the main reasons a lot of studios use UE because of its familiarity in the industry and modularity doesn't apply and if they decide to use it they can just licence it like Sony Bend, so the more likely scenario is what has been stated, that is after working with Epic over a number of years on the PS5 SSD/IO and the positives that then flowed from that work with the UE5 showcase impressed Sony enough to take a small stake in Epic .

Now looking at the amount spent and combining that with both parties history with PS5's development , my conclusion is Sony was chuffed with the results of the partnership and its effect on the PS5's development so Sony looking ahead at future developments saw taking a small stake in Epic as a way of further cementing that relationship rather than it being a big financial strategy, being more of a symbolic gesture of were behind you going forward and so fencing off what they see as an asset in regards to future development, so it seems like it is a more general outlook than just UE/fortnite. 

Last edited by mjk45 - on 10 July 2020

mjk45 said:

I feel that to the focus on UE is narrowing our thinking , it's been pointed out that Sony mainly uses in house game engines with great success on both a technical and sales level, so the main reasons a lot of studios use UE because of its familiarity in the industry and modularity doesn't apply and if they decide to use it they can just licence it like Sony Bend, so the more likely scenario is what has been stated, that is after working with Epic over a number of years on the PS5 SSD/IO and the positives that then flowed from that work with the UE5 showcase impressed Sony enough to take a small stake in Epic .

Now looking at the amount spent and combining that with both parties history with PS5's development , my conclusion is Sony was chuffed with the results of the partnership and its effect on the PS5's development so Sony looking ahead at future developments saw taking a small stake in Epic as a way of further cementing that relationship rather than it being a big financial strategy, being more of a symbolic gesture of were behind you going forward and so fencing off what they see as an asset in regards to future development, so it seems like it is a more general outlook than just UE/fortnite. 

It seems very unlikely that they spent 250 million dollars just to cement an R&D relationship. In stake, acquisitions and mergers, companies generally spend that kind of money to gain a positional advantage against their competition.

Here, there is so much more at play than R&D. We have:

  • the importance of UE in the creation of 3rd party games
  • the position Epic is trying to gain on the digital software space against Steam and now Microsoft
  • the narrative position Sony wants against MS in the mids of gamers (we just saw this in the PR around the PS5)

Sony would never just put in that kind of money just to improve their R&D workflow. It's a small part of it, but there are much greater factors at stake imho.



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padib said:
mjk45 said:

I feel that to the focus on UE is narrowing our thinking , it's been pointed out that Sony mainly uses in house game engines with great success on both a technical and sales level, so the main reasons a lot of studios use UE because of its familiarity in the industry and modularity doesn't apply and if they decide to use it they can just licence it like Sony Bend, so the more likely scenario is what has been stated, that is after working with Epic over a number of years on the PS5 SSD/IO and the positives that then flowed from that work with the UE5 showcase impressed Sony enough to take a small stake in Epic .

Now looking at the amount spent and combining that with both parties history with PS5's development , my conclusion is Sony was chuffed with the results of the partnership and its effect on the PS5's development so Sony looking ahead at future developments saw taking a small stake in Epic as a way of further cementing that relationship rather than it being a big financial strategy, being more of a symbolic gesture of were behind you going forward and so fencing off what they see as an asset in regards to future development, so it seems like it is a more general outlook than just UE/fortnite. 

It seems very unlikely that they spent 250 million dollars just to cement an R&D relationship. In stake, acquisitions and mergers, companies generally spend that kind of money to gain a positional advantage against their competition.

Here, there is so much more at play than R&D. We have:

  • the importance of UE in the creation of 3rd party games
  • the position Epic is trying to gain on the digital software space against Steam and now Microsoft
  • the narrative position Sony wants against MS in the mids of gamers (we just saw this in the PR around the PS5)

Sony would never just put in that kind of money just to improve their R&D workflow. It's a small part of it, but there are much greater factors at stake imho.

 I feel we are in agreement,There are other benefits that's why I said it's a more general outlook than just UE /fortnite, but the likely catalyst seems to be the PS5 development and positive PR the two parts go together and cover the narrative position that you mentioned, plus the 250 million isn't really an impost since unless the bottom falls out of Epic's share price they should do all right.



Epic isn't publicly traded, so they don't have fluctuating "share price" like that, every investor has made particular deal.

Epic's CEO also emphasized the synergy in cross play, with Epic's platform used to allow "every platform" to achieve crossplay.
A good amount of Sony's issue with that was MS getting their fingers and eyes on Sony's customers, but Epic platform can avoid that,
with Epic's infrastructure also establishing vertical platform to address PC market from on own terms, not as 3rd party paying for distro.
I think a developing relation with Epic is also attractive for funding Sony's own games being ported to PC, since Epic can partially fund them
in proportion to expected PC sales, or for that matter Xbox sales if they go there too. Sony gets more total money from crossplatform sales,
while using their own capital more efficiently, allowing them to fund more game development if they wish. Of course they don't need
minority holding to do that, but it greases the wheels and keeps everybody on the same page if Sony has seat on Epic's board as seems likely.

Longer term the question is if there will be deeper integration of Playstation and Epic infrastructure, which IMHO is pretty likely at some level.
Integration of other media like film /TV also seems relevant, especially with Disney on board at Epic, furthering the appeal for both sides.

Last edited by mutantsushi - on 12 July 2020

padib said:
mjk45 said:

I feel that to the focus on UE is narrowing our thinking , it's been pointed out that Sony mainly uses in house game engines with great success on both a technical and sales level, so the main reasons a lot of studios use UE because of its familiarity in the industry and modularity doesn't apply and if they decide to use it they can just licence it like Sony Bend, so the more likely scenario is what has been stated, that is after working with Epic over a number of years on the PS5 SSD/IO and the positives that then flowed from that work with the UE5 showcase impressed Sony enough to take a small stake in Epic .

Now looking at the amount spent and combining that with both parties history with PS5's development , my conclusion is Sony was chuffed with the results of the partnership and its effect on the PS5's development so Sony looking ahead at future developments saw taking a small stake in Epic as a way of further cementing that relationship rather than it being a big financial strategy, being more of a symbolic gesture of were behind you going forward and so fencing off what they see as an asset in regards to future development, so it seems like it is a more general outlook than just UE/fortnite. 

It seems very unlikely that they spent 250 million dollars just to cement an R&D relationship. In stake, acquisitions and mergers, companies generally spend that kind of money to gain a positional advantage against their competition.

Here, there is so much more at play than R&D. We have:

  • the importance of UE in the creation of 3rd party games
  • the position Epic is trying to gain on the digital software space against Steam and now Microsoft
  • the narrative position Sony wants against MS in the mids of gamers (we just saw this in the PR around the PS5)

Sony would never just put in that kind of money just to improve their R&D workflow. It's a small part of it, but there are much greater factors at stake imho.

This move isn't a PlayStation move. It's a Sony move.

If you think this is about position PS over Xbox, you're thinking too small.

This will benefit Sony in many different ways, such as Sony Music and Sony Pictures and TV

 



So many guesses, so I'll add mine to the list of conspiracy theories:

Cerny has been doing his thing for over a decade now. Chances are he spent time with Epic and went back and forward a few times. Epic has one of the most used third party engines and Sony needs third party support as always.

Over the last few years, between what Epuc needs and what the Ps5 needs there has been a meeting of the minds.

Maybe they knew the demo will light up the Internet and forums, maybe they didn't, maybe it was somewhere in between, but it's happened and the shit took off.

Between the UE5 use for third parties, and UE5 use for filming, Sony and Epic have things they could use from one another - hardware from Sony, software from Epic. Sony makes an investment.

I don't see it as anymore complicated than that. Maybe Sony was feeling things out, maybe epic was feeling things out. Maybe they both knew it might happen, maybe they both knew all along, but it's certainly been in the making a long time.



Whoever said life to be like a box of chocolates clearly didn't know what he was talking about. 

Life is more like a game of bumper cars. At every turn there is a possibility you will get screwed.

I doubt there is a big grand design more than getting better PR. A 1.4% stake isn't going to get you anything more than that.