Disney announced it will be investing $1.5 billion into Epic Games, the studio behind the massively popular free-to-play cross-platform game “Fortnite,” on Wednesday. The deal marks the company’s biggest investment in gaming to date.
As part of this investment, the two companies will work together to make new games as well as a “Disney universe.”
“We’ve ventured into a strategic relationship with Epic Games, the maker of ‘Fortnite,’ to not only invest in the company Epic — we took a minority stake, $1.5 billion investment — but we’re also creating with them a huge Disney universe that will be for gaming and for play and for watching and even for shopping for digital goods and maybe even ultimately physical goods,” Disney CEO Bob Iger said on CNBC ahead of the company’s earnings call.
According to Iger, this proposed universe will live “alongside” “Fortnite” and will be “completely interconnected” to the widely played game.
Epic Games rarely releases player numbers, but in November with the release of the OG “Fortnite” season, the studio revealed that it saw 44 million players in one day.
“This represents, probably, our biggest foray into the games space ever, which I think is not only timely, but an important step when you look at the demographic trends and when you look at where Gen Alpha, Gen Z and even Millennials are spending their time in media,” Iger continued.
The Disney head went on to call the time these generations spend with video games “pretty dramatic” and noted that it was “equal to or greater than” how people are spending time with TV and movies.
This isn’t the first time Disney has collaborated with “Fortnite.” Characters and assets from properties including Marvel, Star Wars, “The Nightmare Before Christmas” and “Tron” have made it into the game. But as “Fortnite” is a game that capitalizes on licensing IP to let players inhabit various characters, this sort of collaboration between Epic Games and bigger companies is fairly routine. A $1.5 billion investment is not.
Disney has toyed with video games for decades with mixed results. The company most heavily invested in the medium in the 2000s with a large assortment of tie-in games based on its movies and shows, many of which were forgettable.
During the company’s first quarter earnings call for 2024, Iger acknowledged that the company has pursued video games in a “number” of different ways over the years but has found its most success in licensing.
“We’ve licensed, I think, $9 billion in franchises, including the ‘Spider-Man’ franchise, which is the most successful video game last year,” Iger said.
Iger decided to pursue games more heavily following a meeting with chairperson of Walt Disney parks and resorts Josh D’Amaro and senior vice president of global games and interactive experiences Sean Shoptaw. The CEO said the time he saw that millennials, Gen Z and Gen Alpha were spending on video games was “stunning.”
“The conclusion I reached was we have to be there and we have to be there as soon as we possibly can,” Iger continued. Thanks to its past “Fortnite” collaborations, Disney had already seen success with Epic Games and had already worked with the company in 2017 through its Accelerator program.
“The numbers of ‘Fortnite’ have been really compelling,” Igoer added, noting that this partnership is a great way to bring more of Disney’s IP to gaming. “We have skin in the game, but we also build a world where we’re actually not creating too much risk for the company. As we see it, this is the best of all worlds in many respects, from a business venture perspective, and it’s certainly great for consumers who love to interact with our characters already in video game format. I’m actually really thrilled about it.”
