Sony has invested $250 million in Epic Games, the company behind the popular battle-royale video game "Fortnite."
The PlayStation console maker will take a minority stake in Epic, the two companies said Thursday, in a strategic investment deal that expands on an existing relationship between both firms.
Other than being known for creating hit titles like "Fortnite" and the "Gears of War" franchise, Epic is seen as a major player in the video games industry thanks to its Unreal game-engine software that powers many of the world's top games. The company also runs an online video games store that competes with Steam.
"Epic's powerful technology in areas such as graphics places them at the forefront of game engine development with Unreal Engine and other innovations," Sony CEO Kenichiro Yoshida said in a statement Thursday. "There's no better example of this than the revolutionary entertainment experience, Fortnite."
"Through our investment, we will explore opportunities for further collaboration with Epic to delight and bring value to consumers and the industry at large, not only in games, but also across the rapidly evolving digital entertainment landscape."
The investment is subject to regulatory approvals, Sony and Epic said.
It's a significant deal for Sony, seeing the Japanese electronics and entertainment powerhouse join forces with one of the world's top gaming brands. Privately-held Epic is also backed by another household name in the industry, Chinese firm Tencent.
"I see this as more strategically broad," than just gaming, Piers Harding-Rolls, head of games research at Ampere Analysis, told CNBC. "Epic is increasingly active in production across different entertainment markets and is enabling content convergence through Fortnite. Much of this aligns to different businesses within Sony."
The news arrives as Sony gears up to launch its PlayStation 5 console later this year. The Japanese firm has been intensifying its battle with Microsoft to convince gamers to buy its next-generation device over the upcoming Xbox Series X.