Epic Games joins Spire Animation’s $20M round for animated metaverse films

Spire Animation Studios has raised $20 million from Epic Games and others as it aims to produce animated films for the metaverse.

Los Angeles-based Spire will use Epic’s Unreal Engine as part of its feature film animation pipeline as it builds new cinematic worlds.

The companies said the collaboration signals a significant shift in the future of feature animation. Epic is investing in Spire alongside existing investor Connect Ventures, an investment partnership formed by Creative Artists Agency (CAA) and New Enterprise Associates (NEA). Funding is ear-marked for team expansion, studio technology and infrastructure build out, as well as creative development. Epic will also join Spire’s Board of Directors.

This investment will accelerate the animation process and improve the quality of collaboration across departments.

“We thought, not only would the efficiencies be super valuable to a company like ours, but just the more intimate filmmaking experience would allow us to bring in talent from other media,” said Spire’s cofounder and chief creative officer Brad Lewis, in an interview with GamesBeat. “We could break away from that assembly line like approach to producing feature animation.”

Lewis, producer of the Academy Award-winning Pixar film Ratatouille, started the company with serial entrepreneur P.J. Gunsagar.

The feature animation studio will tell original, culturally relevant stories that resonate with audiences worldwide, partnering with both best-in-class talent and emerging creatives. The duo are bringing a new creative voice to feature
animation by applying a lighter, next-generation approach to production that combines top talent and animators with cutting-edge technologies.

The studio’s first two projects — Trouble and Century Goddess — are currently in production. The company is creating real-time workflows and rendering in the Unreal Engine as a new way of making animated films.

The company got an Epic Mega Grant last year to test the technology, and it worked out. That led to the financing and Epic joining Spire’s board, Gunsagar said.

“The great thing about this partnership is we’ve got parallel interests in the end tool development with Epic,” Lewis said. “We are committed to it in the long term.”

Lewis said that the company isn’t focused on making highly realistic imagery for its animated films.

“In animation, our goal is, depending on the story, to make a movie-going experience, a new environment, a stylization of environment, with place, setting, tone, and character,” Lewis said. “Our best work is done in traditional feature animation, and it evolves from the story to story, but it has nothing to do with naturalistic or realistic animation.”

Gunsagar added, “That’s what is really interesting for Epic as well, to demonstrate this caricature style of animation is the goal.”

And Lewis said, “This is really about trying to evolve the working experience on the feature animation and that’s really another great advantage we think that Unreal Engine brings us. Artists can simultaneously work in environments, much earlier stages of the production pipeline, and be able to see and make decisions that involve all sorts of disciplines of animation.”

As for the metaverse, Gunsagar said Epic still faces unknowns in how it will play out with filmed entertainment.

“For us, what we know today is Epic has hundreds of millions of users on their Fortnite platform. This is a really interesting opportunity to attract that audience and engage them in ways they wouldn’t otherwise do with the release of movies,” Gunsagar said.

Gunsagar said the film Trouble, whether it is inside Fortnite or outside it, has a great chance to engage the users in a metaverse setting.

“We have a front row position to help them figure out how to open up their worlds, and we’re excited about it,” Gunsagar said.

Lewis added, “I’m incredibly excited about this. We know the movie audience and the streaming audience well. The metaverse audience is a brand new audience there. And they are they’re looking at content in a different way. I think there’s a community there that in some ways they want to interact with it. I think they want to be treated like an intelligent audience. I think that they want to be engaged in more than just one level. We believe that the best way to connect with an audience is with an incredible story told through characters we end up caring about.”

The company has about 50 people now and it expects to add another 50 as it moves into full production. The company has reviewed nonfungible tokens (NFTs) as a possible strategy, but it isn’t core to what they’re doing, Gunsagar said.

“We will create engaging, authentic experiences for our audience,” he said. “The right revenue opportunities will will present themselves but it’s really not about that at this date. It’s about telling great stories.”

The company will likely raise money in the coming quarters, Gunsagar said.