Disney invests $1.5 billion for Epic Games stake

By Charles Perrin

Disney has taken the brave step of diving into the world of gaming by forming a telling partnership with Epic Games, the makers of Fortnite.

As part of the parameters of the deal, media conglomerate Disney has invested $1.5 billion in return for an equity stake in Epic Games, and this represents a sizable punt on the gaming space.

Yes, Disney will work with Epic Games to create new games and expand its entertainment universe. The transaction will be subject to particular conditions, including approval from the relevant regulatory bodies before it is ratified.

It is unclear what Epic Games’ new valuation will be after Disney’s funding, however, the deal extends a string of major partnerships for the company.

Recently, Fortnite teamed up with Lego to produce a survival crafting game that resembled Minecraft, and it also launched Fortnite Festival, a rhythm game from Harmonix, which in turn, produced the game Rock Band.

Players and gamers will now be able to create their own stories in a distinctly Disney way, and the content will be powered by Unreal Engine.

Unreal Engine has been used to produce the assets and contents from the Disney portfolio which includes the development of video games like Kingdom Hearts 3 and Star Wars Jedi: Survivor, and these titles have been given a wholly cinematic feel.

Giving his thoughts on the deal, Disney’s CEO, Robert A. Iger, said: “Our exciting new relationship with Epic Games will bring together Disney’s beloved brands and franchises with the hugely popular Fortnite in a transformational new games and entertainment universe.

“This marks Disney’s biggest entry ever into the world of games and offers significant opportunities for growth and expansion.

“We can’t wait for fans to experience the Disney stories and worlds they love in groundbreaking new ways.”

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Meanwhile, Tim Sweeney, CEO and Founder of Epic Games, lauded the merger.

He said: “Disney was one of the first companies to believe in the potential of bringing their worlds together with ours in Fortnite, and they use Unreal Engine across their portfolio.

“Now we’re collaborating on something entirely new to build a persistent, open, and interoperable ecosystem that will bring together the Disney and Fortnite communities.”

The digital gaming world has soared over the past few years, and now it is believed there are over 3 billion avid video gamers who want to unleash their own creativity and experience great gameplay.

Disney, who previously had a foot in the gaming world before abruptly leaving in 2016 to concentrate on its licensing business model, seemed to have caught many off guard at the time.

But it is the licensing model that garnered much success with Disney licensing Spider-Man for blockbuster video games, and they have a proven track record in this department.

And Josh D’Amaro, Disney Experiences Chairman, believes the partnership with Epic Games will be an eye-opener.

He said: “This will enable us to bring together our incredible collection of stories and experiences from across the company for a broad audience in ways we have only dreamed of before.

“Epic Games’ industry-leading technology and Fortnite’s open ecosystem will help us reach consumers where they are so they can engage with Disney in ways that are most relevant to them.”

Disney, a Dow 30 company, reported annual revenues of $88.9 billion for the Fiscal Year 2023.

The deal with Epic Games symbolizes something new and fresh, and arguably, it is a shrewd move on Disney’s part. It will have to be a case of watching this space to see how things unfold.