Google Considered Joining Forces With Tencent To Buy Epic Games, Court Docs Reveal

The Epic Games vs. Google court battle is well underway at the moment. It has revealed many spicy internal details from both sides so far. It seems like Google once floated the idea of purchasing Epic Games outright but with the help of Tencent Games. As confirmed by the leaked emails at The Verge, it wanted to team up with Tencent to secure Epic Games. The giant conglomerate also explored buying a majority stake in the company.

Google wanted to buy a majority 20% stake by spending a staggering $2 billion on Epic Games, likely if the plans to acquire the whole company’s shares with Tencent failed. The company mentioned it “will require a substantial investment to gain influence.” The overall ideas were coined by the ambitious ex-stadia lead Phil Harrison when expectations surrounding the cloud gaming service were at an all-time high in the industry. 

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)
Yeti (Fortnite + Unreal Engine support for all games),” reads the first email by Phil.

Dav Sobota, the director of corporate development at the company in 2018, responded to the email and discussed plans to bring Tencent on its side to purchase Epic Games.

As a potential alternative, Phil is proposing we consider approaching Tencent to either
(a) buy Epic shares from 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).”

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However, Google was a tad bit cautious and did not want to partner with Tencent carelessly. The route apparently sounded tentative because of the following reasons:

The company may be open to a second large strategic investor as a counterweight to Tencent.
Tencent may not be willing to sell shares, or may seek to block another strategic investor (investor rights unknown).”

A similar leak shared by Bloomberg also emerged two years ago, which stated that Google wanted to buy Epic Games’ shares from Tencent to stop it from launching the Fortnite Android app by bypassing the Google PlayStore.

The aftermath of such an acquisition would have cemented Google as the co-owner of one of the biggest titles in gaming history, Fortnite. Its current revenue has reached over $26 billion because of the in-game purchases and live-service nature. Moreover, we could have seen Stadia emerge as one of the major players in the ecosystem instead of fading away into obscurity over time.