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Sony buying Epic would make the Metaverse a reality

ChorizoPicozo

Gold Member
This why the "Sony bough bungie for their expertise in GaaS" some kind of of half-truth.

Epic with Fornite is the King of GaaS.


Sony should be working on PlayStation Home (PS5-PC-VR) using Unreal 5 and monetizing it with stupid cosmetics. Offer virtual concerts, E3-like events, and shit like that.
 

PaintTinJr

Member
Doesn't make sense to consider the merge of companies like Sony and Epic.

Sony is way bigger than Epic: Epic was valued in $32B. Sony's market cap is $88.6B, their valuation would be way higher, at least more than 3 or 4 times Epic. Only looking at SIE, they made $25B per year and are in a growing trend, so in a few years will be generating the same revenue than Epic's valuation.

Epic's games are on PlayStation, which is their main platform so they won't remove them from there. Epic has several very successful games but we have to see if they can be turned into IPs with similarly successful games, movies, etc. So yes, their IPs have value but their long term future is a bit doubtful and they don't need to buy them to have them, and even less spending dozens of Billions.

Unreal Engine makes money, but Sony also makes their own engines (and even share them with others) but isn't their market: Sony focus more on selling hardware and final product (games, movies and music) instead. And well, Sony and everyone can use it. In fact, to own it wouldn't stop the competition to use it, so there is no point on spending dozens of bilions to buy it.

So Epic would be an interesting acquisition, but they are too big to be bought by them, too small to merge with them and there aren't enough reasons to want to buy or merge with them.

If Sony would have $32B to invest in acquisitions they would be better spent on buying Square Enix, Capcom, Bandai Namco, ARC System Works, Dimps, Sega and Kadokawa (with this money they could buy most of them).
I'm not sure if I'm understanding the ownership of Epic correctly, but from what I can gather it is a private company like Steam, so provided Tim was willing and Sony were prepared to, they could buy enough of Tim's shares to add to their existing percentage (probably an extra 46% at a value of $14.7 billion) to have the control stake in the company, which I assume would give them the same control/protection as owning the whole thing - just less of the profits.

Assuming that was achievable, I would then assume Sony could use their controlling stake in Epic to buy Bungie from Sony at cost, thereby lowering the Epic deal cost by $4billion and giving Tencent and Tim, etc a cut in profits from Bungie and an increased valuation of Epic at $36billion, and still potentially be in a situation that if Sony as a whole ever had enough to be able to afford the remaining 49% of Epic, they could use their controlling interest to take Epic public and do a hostile takeover with their controlling stake. Obviously not going to happen, but the first part would maybe be one way Sony could in effect buy Epic to use Fornite as a counterweight to CoD getting taken away and protect Unreal's success by protecting PlayStation.
 
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EDMIX

Member
Sony already tried a metaverse with PS home and it was received with mixed results. I was alone in enjoying home amongst my friends. The best was the Siren world that made you do a mini horror mission. I would love for Sony to re launch home mixed with something like Dreams.

Epic probably wouldn't clear regulators because of Unreal. It's a similar situation to Nvidia trying to buy ARM; epic is integrated too tightly to much of the industry to be owned by a console maker. Sony couldn't afford Epic either.

Was too ahead of its time.

I wonder if they'll do a new PS Home with that VR2 thing.
 

Kumomeme

Member
since nowdays that making MMO is very risky and especially harder(to make a very good one) to the point lot of big company struggling. so, making a 'metaverse' in hope it could be next 'social media' could be way riskier and harder IMO. it also need to be 'big' to success and obviously the failure risk is also bigger.

not to mention with today's adapting trend of MMO design that cater toward solo player, making a 'metaverse' in hope where people could 'socialize' would not be that easy.

MMORPG population also in 'decline' as it is not huge as its before. hardest challenge is not simply to make a good game but to provide quality consistent of long term maintenance and update and this should also apply toward 'metaverse'. well yes, MMO is not a 'metaverse' and there is people argue that 'metaverse' is not a videogame but it is the closest example we can see of what we might be expecting to happen in future.

also lot of MMO end up failed and get shutdown after years, im not suprise in next few years or decade we gonna see similliar stuff happened to quite few of 'metaverse', assuming there lot of company attempting to do it. even playstation home only last around 7 years.

even making a 'social media' like facebook today also is not easy. even big name like myspace get buried. social media+massive online game certainly will be quite a challenge.
 
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StreetsofBeige

Gold Member
Metaverse. An impractical idea looking for customers.
There is no mass market for any of this crap.
So true.

It's hard enough to get people to go online on MS Teams to show their face and speak up. Yet Nadella thinks if the office is metaversed, everyone online or working from home will make an avatar, put on VR goggles and digitally walk together from meeting room to meeting room before and after every online meeting.

So if a one hour meeting starts at 10 am and there's another that starts at 11 am, you, me, Sally and Jim Bob will log into the metaverse at 9:50 am to digitally hang out in a pixelized kitchen to grab a fake coffee, walk together to Metaverse Room 1, then walk together to Metaverse Room 2 when the 11 am meeting starts and sit in a digital leather chair.

And then the PPT starts.

Instead of leaving one meeting immediately in Teams and joining the new one, you might be late for it. When asked why you're late coming to the 11 am meeting, you can tell the organizer you couldn't find the metaverse meeting room and your avatar walks too slow.

Sounds like a corporate dream come true.
 
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Epic Games was valued at $32 billion this past April. Sony has a market cap of $85 billion.


A merger would be more plausible than either acquiring the other. But neither is likely.

Sony is one of the most undervalued companies in the world.
 

Topher

Gold Member
This why the "Sony bough bungie for their expertise in GaaS" some kind of of half-truth.

Epic with Fornite is the King of GaaS.

Tencent's expertise in GaaS is a reason why Epic partnered with them. Similar situation with Bungie except for being an acquisition rather than sell of shares.
 

yurinka

Member
I'm not sure if I'm understanding the ownership of Epic correctly, but from what I can gather it is a private company like Steam, so provided Tim was willing and Sony were prepared to, they could buy enough of Tim's shares to add to their existing percentage (probably an extra 46% at a value of $14.7 billion) to have the control stake in the company, which I assume would give them the same control/protection as owning the whole thing - just less of the profits.

Assuming that was achievable, I would then assume Sony could use their controlling stake in Epic to buy Bungie from Sony at cost, thereby lowering the Epic deal cost by $4billion and giving Tencent and Tim, etc a cut in profits from Bungie and an increased valuation of Epic at $36billion, and still potentially be in a situation that if Sony as a whole ever had enough to be able to afford the remaining 49% of Epic, they could use their controlling interest to take Epic public and do a hostile takeover with their controlling stake. Obviously not going to happen, but the first part would maybe be one way Sony could in effect buy Epic to use Fornite as a counterweight to CoD getting taken away and protect Unreal's success by protecting PlayStation.
Being a private company means that their owners (in this case as I remember Tim with slightly over 50% of the shares) decides if they sell or not and in the case they decide to sell, they also set the price.

But when some else buys shares or the whole company, they make an estimation of its value and set a price/percentage according to it on a way that both sides agree.

Tim has over 50% of the company, so even if others like Tencent or Sony have a big chunk of the company they can't take any big decision as would be to sell the company without Tim's approval.

If Sony (or Tencent) would want to buy Epic they should buy from Tim enough shares of the company to have over 50% of them to achieve a controlling stake. No need to include Bungie here, Sony just bought it so won't sell them or give it to anyone else.

I don't know what is the current percentage of Epic shares owned by Sony, but if they'd buy enough to control (so buy Epic) they wouldn't only pay that percentage of the value (let's say the 46%/$14.7 billion), on top of that they pay an extra on top due to several reasons, being one of them having several bidders wanting to pay for it.

That premium in recent big game company acquisitions ranged between 40% and 60%. Meaning that if what Sony would buy would be valued in $14.7B, they'd pay $22.05B if the premium is a 50%.

I think Sony wouldn't be interested on buying Epic because compared to what they already have that wouldn't provide them enough value. But if that would happen, I think it would be a Bungie-like situation: Sony would keep Epic under SIE reporting to Jimbo but selfpublishing as Epic as usual in all platforms including rival platforms and day one.

They would do it to add revenue and profit on top of what they already have plus to get more knowledge, tools, data and expertise and to ensure current and future Epic games will always continue being on Sony consoles and game subs. UE would continue to be provided to all gamedevs including Microsoft. Sony would rehash the Epic PC store turning it into their PSN PC store.

I think for Sony to pay well over 20B to own a majority (not all) of Epic would be too much for them and I think that in any case they don't have enough in their special cash budget dedicated for investments, acquisitions and Sony shares repurchases, since a big chunk of it isn't for gaming. If desired Sony could do different things like to pay with shares, or getting debt etc. but I don't see them doing that.

I think that instead Sony will keep investing on Epic buying shares in little chunks and who knows if maybe in 5 or 10 years from now they'll consider if they buy it or not, once Sony would have grown a lot and would have more than enough cash to buy it.

Tencent's expertise in GaaS is a reason why Epic partnered with them. Similar situation with Bungie except for being an acquisition rather than sell of shares.
In addition to this, Tentent also owns the main Chinese game stores, social networks and ads companies of China in both PC and mobile. And considering China is the top 1 country in gaming revenue and amount of players, it makes them a very appealing partner to help them enter China.

Tentent is also the company that makes more money with games in the world, meaning that they can provide all money they could need for any promising super ambitious project, aren't tied by money.

And well, Tencent also owns a ton of game and tech companies of all kinds so can provide them help with anything they may need. As an example: game server issues in games on a scale of Fornite are very different than the smaller ones. Tencent has other companies like Supercell with games that have a way bigger scale than Fortnite, so can teach Epic how they addressed these issues when they had them, offer them tech, data and knowledge, etc.
 
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PaintTinJr

Member
Being a private company means that their owners (in this case as I remember Tim with slightly over 50% of the shares) decides if they sell or not and in the case they decide to sell, they also set the price.

But when some else buys shares or the whole company, they make an estimation of its value and set a price/percentage according to it on a way that both sides agree.

Tim has over 50% of the company, so even if others like Tencent or Sony have a big chunk of the company they can't take any big decision as would be to sell the company without Tim's approval.

If Sony (or Tencent) would want to buy Epic they should buy from Tim enough shares of the company to have over 50% of them to achieve a controlling stake. No need to include Bungie here, Sony just bought it so won't sell them or give it to anyone else.

I don't know what is the current percentage of Epic shares owned by Sony, but if they'd buy enough to control (so buy Epic) they wouldn't only pay that percentage of the value (let's say the 46%/$14.7 billion), on top of that they pay an extra on top due to several reasons, being one of them having several bidders wanting to pay for it.

That premium in recent big game company acquisitions ranged between 40% and 60%. Meaning that if what Sony would buy would be valued in $14.7B, they'd pay $22.05B if the premium is a 50%.

I think Sony wouldn't be interested on buying Epic because compared to what they already have that wouldn't provide them enough value. But if that would happen, I think it would be a Bungie-like situation: Sony would keep Epic under SIE reporting to Jimbo but selfpublishing as Epic as usual in all platforms including rival platforms and day one.

They would do it to add revenue and profit on top of what they already have plus to get more knowledge, tools, data and expertise and to ensure current and future Epic games will always continue being on Sony consoles and game subs. UE would continue to be provided to all gamedevs including Microsoft. Sony would rehash the Epic PC store turning it into their PSN PC store.

I think for Sony to pay well over 20B to own a majority (not all) of Epic would be too much for them and I think that in any case they don't have enough in their special cash budget dedicated for investments, acquisitions and Sony shares repurchases, since a big chunk of it isn't for gaming. If desired Sony could do different things like to pay with shares, or getting debt etc. but I don't see them doing that.

I think that instead Sony will keep investing on Epic buying shares in little chunks and who knows if maybe in 5 or 10 years from now they'll consider if they buy it or not, once Sony would have grown a lot and would have more than enough cash to buy it.


In addition to this, Tentent also owns the main Chinese game stores, social networks and ads companies of China in both PC and mobile. And considering China is the top 1 country in gaming revenue and amount of players, it makes them a very appealing partner to help them enter China.

Tentent is also the company that makes more money with games in the world, meaning that they can provide all money they could need for any promising super ambitious project, aren't tied by money.

And well, Tencent also owns a ton of game and tech companies of all kinds so can provide them help with anything they may need. As an example: game server issues in games on a scale of Fornite are very different than the smaller ones. Tencent has other companies like Supercell with games that have a way bigger scale than Fortnite, so can teach Epic how they addressed these issues when they had them, offer them tech, data and knowledge, etc.
My take is there would be zero premium on the shares Sony would need to buy for a majority control of Epic( as-is private company) if Tim sees what is coming from Gamepass with CoD.

Gamepass IMO is a direct threat to Unreal in the long term because if Gamepass can be successful to turn a profit and reduce consumer desire to buy AAA games, then that's going to damage PlayStation massively and damage Unreal's market massively, then because consumers will demand AAA games on Gamepass - which aren't affordable day 1 - Microsoft will target all the things they need to do cheaper to lower their overheads to provide AAA games on gamepass day 1. Unreal profits will be one of the first things Microsoft target IMO as a cost reduction by providing their own version that replaces Unreal, So IMO it is possible that the Unreal value in Epic has peaked at this point, and Tim selling (most of his shares) to Sony actually protects his Epic legacy by giving PlayStation a Fornite counterweight to CoD .

Sony obviously wouldn't extend themselves by $15billion on an acquisition - IIRC they've got access to about $25 billion post Bungie purchase - so selling Bungie to Epic after buying control of Epic would keep Tencent happy with another set of GaaS games they could expand in China through their storefronts, upping their returns and value of their Epic investment, wou;d probably keep Bungie and Sony shareholders happy, but effectively getting majority of Fortnite and Unreal for $11billion, and would probably keep Tim happy by being able to leave him running Epic, or Bungie and putting $15 billion in his pocket and still giving him a 5% share in Epic that would return Epic + Bungie(with a China uplift) profits, and protect Unreal against Gamepass's endgame of free middleare and AAA games day 1 on the service.

Even Sony shareholders might be happy with a 51% return of Epic + Bungie(with a China uplift) profits, for a $11billion investment plus a loss of 49% of Bungie (and profits) and a sound strategy against the Gamepass/Activision acquisition problem.
 
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Wonko_C

Member
I don't know. Just sounds like you're daydreaming a bit on this one.

If metaverse is supposed to be a digital recreation of our reality, with fictionalized elements, I'd probably say it's more likely to be ushered in by someone with a large digital footprint like social media companies, google, or Amazon. It's not a coincidence that Facebook literally changed their name to Meta, and has the largest install base for a VR company. Facebook could try to buy Epic and then what would happen? Not that much. It would be Fortnight on Oculus, which honestly could happen anyway without anyone buying Epic. It still would just be a game in VR with lots of random IP marketed in there.
Oculus already does lots of free VR content, concerts, and movies, workouts, social meet ups, work from home integration tools. It still hasn't amounted to a MetaVerse. They literally have a playstation Home style hangout integrated into the system already, and it's just a blip on the radar.

The real Metaverse is likely never going to be controlled by one company. It'll just be the internet collectively. All that would change is some kind of much, much broader change in how we connect to the internet as a whole - like VR, AR, some kind of federally mandated real ID log-in, something like that or all of the above. EPIC will be a tiny little blip in the real Metaverse, which may not even exist for decades or more at this rate.

The Metaverse is just the internet as a whole, with further integration on how we use it. Sony can't even manage cross-gen upgrades on videogames smoothly, or PSN ID name changes. They're not leading the charge of a digital recreation of al commerce, work, and entertainment across all companies. Sony is going to be a tiny, tiny blip as well, making video games and movies.
Thiiiiis 100%. The latest nVidia presentation puts it very simply: The Metaverse is 3D Internet.
 

yurinka

Member
My take is there would be zero premium on the shares Sony would need to buy for a majority control of Epic( as-is private company) if Tim sees what is coming from Gamepass with CoD.
Game subscriptions are a very small part of the market share and Gamepass has a very small market share of the game subscriptions, being the Sony and Nintendo subscriptions over it. Gamepass is a tiny portion of the gaming market share.

CoD sells a lot, but compared to the whole gaming market, or to the whole PC market, or to the whole console market it's a tiny bit. Even for PlayStation only represents a tiny portion of its game sales, not even a 5%.

Sony and Epic won't care about Gamepass or CoD.

And yes, if Sony or anyone else would consider to buy Epic will pay a premium because in a consolidating market there's always multiple bidders wanting to buy big companies, and there are other things in addition to that causing them to pay premium.
 
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