The visual effects business co-founded by Oscar-winning filmmaker Sir Peter Jackson in New Zealand has been sold for $1.6 billion.

Weta Digital, which has worked on blockbusters such as Lord of the Rings and Avatar, has been acquired by Unity, a video game development business.

Games like Pokémon Go and Call of Duty: Mobile use Unity’s technology.

According to the companies, the merger will “democratize” Weta’s special effects technologies.

Sir Peter stated in a statement, “Together, Unity and Weta Digital can offer a road for any artist, from any field, to be able to harness these tremendously creative and powerful tools.”

Sir Peter co-founded Weta in 1993, and it is most known for creating animated characters like Neyriti from Avatar, Gollum from the Lord of the Rings film trilogy, and Caesar from Planet of the Apes.

“Weta is our equivalent of Hollywood in the southern hemisphere,” Sydney-based film critic James Fletcher told reporters.

“Peter Jackson is a filmmaker with a unique perspective. He didn’t have the tools he needed to obtain the outcomes he desired, so he assembled a team “Added he.

The firm will be divided up as part of the sale, with its technological assets being transferred to Unity as Weta Digital.

WetaFX, the company’s visual effects division, will continue to exist as a distinct entity, and is likely to become one of Unity’s top customers.

Sir Peter and the company’s digital artists will “remain in New Zealand and continue to create movies here,” according to Weta.

Unity stated in a statement that it will “bring Weta’s very rare and advanced visual effects capabilities into the hands of millions of creators and artists across the world,” giving them the ability to define the metaverse’s future.

After Facebook announced last month that it will change its name to Meta to better represent its new focus on connecting people through augmented and virtual reality, the word metaverse has gained traction in recent weeks.

“This is a really exciting transaction,” Mr Fletcher remarked.

“They’ll be able to provide filmmakers access to this technology. It’ll be a game-changer for the creative community all across the world.”

Unity’s stock dropped more than 6% in extended trading on the New York Stock Exchange after the news of the cash-and-stock acquisition.