Master the Meta: How Epic Games’ acquisitions fuel its metaverse ambitions

The MTM team digs into Epic's purchases and how they'll power its digital worlds

Master the Meta: How Epic Games’ acquisitions fuel its metaverse ambitions

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On Tuesday, Epic Games announced the acquisition of Capturing Reality - the creator of RealityCapture, a programmatic software for 3D scans to reconstruct objects and scenes from images or laser scans. For Epic, the acquisition provides Unreal Engine developers another powerful set of tools to streamline the asset creation process and create ever-more-realistic representations of the real world in digital spaces. Meanwhile, the acquisition will allow the team at Capturing Reality to accelerate the adoption of its technology across Unreal’s 7+ million installed base, which includes users from various industries.

This is the latest in a flurry of acquisitions for Epic, which has been quite acquisitive over the past several years. A non-exhaustive list of the company’s recent acquisitions includes:

  • Tonic Games Group (maker of Fall Guys)
  • Psyonix (maker of Rocket League)
  • 3Lateral, Cubic Motion, and Quixel (contributed to development of Epic’s MetaHuman Creator)
  • SuperAwesome (a platform that gives developers tools to create safer digital experiences for younger audiences)

So, what exactly is Epic building towards? We know that CEO Tim Sweeney is outspoken about Epic’s desire to play a large role in building the metaverse. And we know that in order for that vision to come true there’s an insane amount of work to be done regarding interoperable infrastructure, enhanced developer tools, consumer access points, content, and more. Epic can’t do it all - the entire world will play a role in what the metaverse ultimately becomes - but Epic’s emerging ecosystem can certainly play a foundational role.

Let’s begin with content. Epic’s 350+ million registered Fortnite users is a great start, and a game (increasingly platform) like Fortnite can serve as a testing ground and gateway to some of the company’s broader ambitions. Plus, adding popular content and talented developers through the acquisitions of Tonic Games and Psyonix - not to mention other developer-friendly publishing deals - allows the company to expand its consumer audience and give them more reason to go to the Epic Games Store. It takes heavy investment to maintain storefront relevance, especially with low take rates and ongoing exclusives, but it makes sense why Epic would want a creator-friendly central hub that connects developers with consumers.

Furthermore, Epic’s Unreal Engine is the centerpiece of Epic’s entire strategy. Acquiring technology - such as 3 Lateral and Cubic Motion - helps third party developers better create virtual content more quickly and in a more realistic way (and can even get take-rate discounts when sold on the Epic Games Store). This helps Epic gain developer market share and differentiate from well-funded competitors (like Unity) plus developers who use their own proprietary platforms. Adjacent platforms and tools like SuperAwesome, Manticore (a UGC platform Epic has invested in), and Epic’s own Epic Online Services (which enables cross-play and access to Epic’s social graph) also show how its development efforts are widening both in scope and potential impact. A mix of acquisitions, investments, and internal reinvestment help turbocharge Epic’s wide-ranging efforts here.

Of course, there are always challenges when chasing lofty goals, and, ultimately, the path to building the metaverse remains unclear. However, it is no secret that Tim Sweeney is captaining the Epic Games ship in a direction that should expand the market for creators in digital worlds. With the acquisition of Capturing Reality and others, Epic adds to its growing list of technology and content that will keep the company as a frontrunner in developing the immersive internet of the future. (written by Jimmy Stone)

Master the Meta is a newsletter focused on analysing the business strategy of the gaming industry. It is run by Aaron Bush and Abhimanyu Kumar. To receive future editions in your inbox sign up here: regularly posts content from a variety of guest writers across the games industry. These encompass a wide range of topics and people from different backgrounds and diversities, sharing their opinion on the hottest trending topics, undiscovered gems and what the future of the business holds.