Epic Games, the North Carolina-based video game company behind the hit "Gears of War" franchise and the widely used Unreal Engine technology, has sold a minority stake to Chinese Internet giant Tencent.
The deal comes after Epic has for the last several years been seeking a buyer or investor, according to several people briefed on the matter but not authorized to speak publicly. As recently as early this year, Epic was asking potential partners for a valuation of about $1 billion, those people said.
The size of Tencent's stake in privately held Epic and the amount that it paid were not disclosed.
The investment will allow Epic's founders to realize some of the value they have built in their company, one of the game industry's most successful independent developers, since its founding in 1991. The strategic partnership with Tencent that comes along with the deal will also allow Epic to expand its presence in the lucrative market for online video games in Asia.
Epic has previously discussed acquisition or investment with video game firms as well as traditional media companies. In 2008, it came close to being bought by film production and financing company Legendary Entertainment.
Since then rumors have frequently swirled around Epic regarding a potential sale, with buzz recently surrounding Tencent. In prior interviews with The Times, including one in early June at the E3 industry conference, Epic co-founder and vice president Mark Rein denied that his company was in talks to be acquired by Tencent.
One of China's most popular online portals, Tencent is among several Asian companies investing in or expanding into the American video game market. Last year, it paid $400 million for a majority stake in Santa Monica-based Riot Games, maker of the hugely popular online video game "League of Legends."Epic is best known for the "Gears of War" series, which has generated more than $1 billion in sales and is scheduled to release its fourth title next year. However, its biggest business is Unreal Engine, a technology used by other video game developers to make titles such as the recent hits "Batman: Arkham City" and "Mass Effect 3."
Epic said it will continue to be managed independently by its leadership team, led by President Michael Capps. In a statement, Capps said he hopes to tap Tencent's expertise in the world of online video game play.
"Epic is excited to be full steam ahead on all of its current plans for this generation of games and the next, with the support of a fantastic partner that believes in our strategy and shares our dream," he added.
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