As part of the ongoing Epic Games and Google trail, a new development has come to the forefront. During a recent trial, it was revealed that Google was planning on teaming up with Chinese game giant Tencent to establish its ownership of Epic Games.
Epic Games is a significant name in the gaming world, with numerous superhit titles under its banner. The developer, whose net worth reportedly stands at around $32 Billion, is best known for its game Fortnite. Besides, it is also the owner and maker of the Unreal gaming engine, which is used in a lot of games.
To gain a massive foothold in gaming, Google once came up with a Chinese multinational technology and entertainment conglomerate, Tencent, to buy 100% of Epic Games. Interestingly, Tencent is the second largest stakeholder in Epic Games after its founder, Tim Sweeney. The Chinese company holds 40% of the stocks of Epic Games.
Google wanted to buy Epic Games?
Back in 2018, Google had a roaring ambition to break into the video games industry. They made a big splash in the industry by launching a game streaming platform and storefront named Stadia, which is now not functional. To further strengthen its billion-dollar standing in the market, the search giant was planning on investing more in content infrastructure.
It originally was looking at some high-profile deals for Stadia before eventually settling on starting its own first-party labels and entreating third-party publishers.
New findings were revealed during a recent Epic v Google trial, wherein ex-Stadia lead Phil Harrison reportedly proposed an idea of Google joining hands with Tencent and completely buying Epic Games’ shares. The partnership would help boost Google’s position by co-owning the biggest game in the world in 2018, Fortnite.
If that did not go through, Google was exploring the chances of purchasing a 20% stake in Epic for a sum of $2 billion. Reports say the court case disclosed emails between Google executives that suggested preliminary ideas and plans for the expansion of Google’s gaming platform.
In July 2018, Phil wrote the following email regarding a probable Epic acquisition or stake purchase:
“I’ve taken a stab at a high-level strategic rationale for an investment in Epic. Fortnite is (or can be) the leading business driver for Google across:
- YouTube (already 100M+increase in game watch time MAU)
- GCP (to shift 130M+players from AWS and build an anchor tenant in games)”
Dav Sobota, the director of corporate development at Google between 2008 – 2018, replied to Phil’s email with the following message for plans to team up with Tencent in some way:
“As a potential alternative, Phil is proposing we consider approaching Tencent to either
(a) buy Epic shares form Tencent to get more control over Epic (unclear how that helps us without a majority share) or
(b) join up with Tencent to buy 100% of Epic (and then of course we do a lot of deep commercial things with Epic).”
During the trial, it was also previously revealed that Google has a 70% operating profit margin on the Google Play Store. In-app purchases across video games and social media platforms majorly contribute to it.
