Disney and Epic Games to Create Expansive and Open Games and Entertainment Universe Connected to Fortnite
- Collaboration with Epic Games to create a new games and entertainment universe
- Disney investing $1.5 billion for an equity stake in Epic Games
- Opportunities for consumers to engage with content, characters, and stories from Disney, Pixar, Marvel, Star Wars, Avatar, and more
- Disney's games business delivering strong results since shifting to a licensing business model in 2016
- None.
Insights
The strategic collaboration between The Walt Disney Company and Epic Games, marked by Disney's $1.5 billion investment for an equity stake in Epic, indicates a significant move within the entertainment and gaming industry. This partnership is poised to leverage the strengths of both companies, potentially driving growth and expansion in a rapidly evolving digital landscape. The capital infusion from Disney could be seen as a vote of confidence in Epic Games' future, possibly enhancing its valuation and financial stability.
From a financial perspective, the deal may diversify Disney's revenue streams and could lead to new monetization strategies, such as in-game purchases and exclusive content offerings. The financial implications for stakeholders include the potential for increased shareholder value if the venture succeeds in capturing the interest of Fortnite's extensive user base and translating that into higher engagement and revenue. However, the success of such a large-scale investment also carries risks, including the execution challenges of integrating Disney's content within the gaming ecosystem and ensuring a return on investment that aligns with shareholder expectations.
The announcement highlights the growing importance of gaming as a cultural and entertainment touchpoint, particularly with the mention of Fortnite's 100 million active players. The collaboration aims to create a 'persistent, open and interoperable ecosystem,' which could redefine engagement in the gaming sector. By bringing together Disney's vast storytelling capabilities with Epic's technical prowess and community, the initiative could set new industry benchmarks for user-generated content, fandom expression and cross-platform experiences.
It is essential to consider consumer trends favoring immersive and interactive entertainment experiences. The partnership's success will hinge on its ability to tap into these trends and deliver a compelling, multifaceted experience that resonates with both Disney and Fortnite audiences. The long-term implications could include shifts in consumer expectations for entertainment and gaming, with other industry players potentially following suit to offer similar experiences, thus reshaping the competitive landscape.
Disney's foray into the gaming world through this substantial investment in Epic Games underscores the convergence of entertainment mediums. The utilization of Unreal Engine across Disney's portfolio not only signifies technological synergy but also presents opportunities for innovation in content creation and distribution. The move may catalyze further advancements in real-time rendering and interactive storytelling, potentially influencing both the gaming and film industries.
The long-term benefits for Disney could include enhanced brand engagement and the cultivation of new fan bases across various demographics. However, the integration of Disney's IP into the gaming universe will require careful management to maintain brand integrity and meet diverse consumer expectations. The collaboration's impact on the broader entertainment ecosystem will be closely watched, as it may prompt other content creators to explore similar partnerships and technology integrations to remain competitive.
Open, persistent and social universe will bring Disney stories and experiences to life, interoperating with Fortnite and its more than 100 million active players and creators
Disney to invest
(Graphic: The Walt Disney Company)
In addition to being a world-class games experience and interoperating with Fortnite, the new persistent universe will offer a multitude of opportunities for consumers to play, watch, shop and engage with content, characters and stories from Disney, Pixar, Marvel, Star Wars, Avatar and more. Players, gamers and fans will be able to create their own stories and experiences, express their fandom in a distinctly Disney way, and share content with each other in ways that they love. This will all be powered by Unreal Engine.
“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,” said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. “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.”
“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,” said Tim Sweeney, CEO and Founder, Epic Games. “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.”
“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,” said Josh D’Amaro, Chairman, Disney Experiences. “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 the ways that are most relevant to them.”
Deepening the Epic Games & Disney Relationship
Disney and Epic Games have engaged hundreds of millions of players through Fortnite content integrations, season collaborations, in-game activations, and live events, including the Marvel Nexus War with Galactus, which drew more than 15.3 million concurrent players.
Unreal Engine is used to produce assets and content across the Disney portfolio including in the development of video games like Kingdom Hearts 3 and Star Wars Jedi: Survivor; in cinematic editing and animation for film and streaming; and in the creation of more than 15 Disney Parks attractions like Millennium Falcon: Smugglers Run at Star Wars: Galaxy’s Edge.
This all builds on Epic Games’ participation in the 2017 Disney Accelerator program, which seeks to impact the future of technology and entertainment.
Games Industry Growth & Disney Games Success
The digital world is growing and evolving with more than 3 billion video game players worldwide who want to move safely and seamlessly between the worlds they love, unleash their own creativity, and experience great gameplay.
Disney’s games business continues to deliver strong results since it shifted to a licensing business model in 2016. Disney is a leading games licensor working with best-in-class developers and publishers, including on the best-selling superhero game of all-time, Marvel’s Spider-Man. Licensed games from Disney garnered more than 150 award nominations, wins and other accolades in 2023, including multiple Game of the Year nominations for Marvel's Spider-Man 2. Disney mobile games have 1.5 billion global installs, and to date, nine Disney games franchises have each grossed more than
About The Walt Disney Company
The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international entertainment and media enterprise that includes three core business segments: Entertainment, Sports and Experiences. Disney is a Dow 30 company and had annual revenues of
FORWARD-LOOKING STATEMENTS
The terms “Company,” “we,” and “our” are used below to refer collectively to The Walt Disney Company and the subsidiaries through which its various businesses are actually conducted.
Certain statements and information in this communication may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s expectations, beliefs, plans, strategies, business or financial prospects or outlook, trends, future growth opportunities and drivers; future products or service offerings (including nature, timing and pricing), consumer sentiment, priorities or demand and drivers; our expected benefits from the collaboration with Epic Games and other statements that are not historical in nature. These statements are made on the basis of the Company’s views and assumptions regarding future events and business performance and plans as of the time the statements are made. The Company does not undertake any obligation to update these statements unless required by applicable laws or regulations, and you should not place undue reliance on forward-looking statements.
Actual results may differ materially from those expressed or implied. Such differences may result from actions taken by the Company, including restructuring or strategic initiatives or other business decisions, as well as from developments beyond the Company’s control, including: the occurrence of subsequent events; deterioration in domestic or global economic conditions or failure of conditions to improve as anticipated; deterioration in or pressures from competitive conditions, including competition to create or acquire content; competition for talent and competition for advertising revenue; consumer preferences and acceptance of our content, offerings, pricing model and price increases, and corresponding subscriber additions and churn, and the market for advertising sales on our direct-to-consumer services and linear networks; health concerns and their impact on our businesses and productions; international, political or military developments; regulatory and legal developments; technological developments; labor markets and activities, including work stoppages; adverse weather conditions or natural disasters; and availability of content. Such developments may further affect entertainment, travel and leisure businesses generally and may, among other things, affect (or further affect, as applicable): our operations, business plans or profitability, including direct-to-consumer profitability; our expected benefits from the collaboration with Epic Games; demand for our products and services; performance of the Company’s content; our ability to create or obtain desirable content at or under the value we assign the content; the advertising market for programming; income tax expense; and performance of some or all Company businesses either directly or through their impact on those who distribute our products.
Additional factors are set forth in the Company’s Annual Report on Form 10-K for the year ended September 30, 2023, including under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business,” quarterly reports on Form 10-Q, including under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and subsequent filings with the Securities and Exchange Commission.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240207879854/en/
Allison Citino
Director, Communications, Games, Publishing and Retail
allison.j.citino@disney.com
Source: The Walt Disney Company
FAQ
What is the nature of the collaboration between Disney and Epic Games?
What opportunities will the new persistent universe offer to consumers?
What is the status of the transaction between Disney and Epic Games?
How has Disney's games business performed since shifting to a licensing business model in 2016?
