Disney To Take $1.5 Billion Equity Stake In Epic Games

Entertainment giant Disney and Fornite creator Epic Games have announced a partnership, signalling how significant the gaming market and digital world has become.

Disney announced that it and Epic Games will collaborate on new games and an entertainment universe, that will further expand Disney stories and experiences. It is Disney’s biggest move yet into the gaming sector.

Disney was in the headlines earlier this week when it and Lucas Film were sued by former Mandalorian actress Gina Carano, who received financial backing for the move from Elon Musk’s X.

Disney and Epic

As part of today’s collaboration however, Disney will invest $1.5 billion to acquire an equity stake in Epic Games alongside the multiyear project.

The transaction is subject to customary closing conditions, including regulatory approvals.

Disney said that 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.”

“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, Disney CEO.

“This marks Disney’s biggest entry ever into the world of games and offers significant opportunities for growth and expansion,” said Iger. “We can’t wait for fans to experience the Disney stories and worlds they love in groundbreaking new ways.”

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“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,” added Tim Sweeney, CEO and Founder at 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.”

It should be remembered that Disney has worked with Epic Games previously, via Fortnite content integrations, season collaborations, in-game activations, and live events, including the Marvel Nexus War with Galactus.

Biggest move

In an interview with CNBC’s Julia Boorstin, Disney’s Iger called the investment into Epic Gamaes, “probably our biggest foray into the game space ever.”

“Which I think is not only timely, but an important step when you look at the demographic trends and where Gen Alpha and Gen Z and even millennials are spending their time and media,” he was quoted as saying.

Epic Games is well known for its legal challenge to both Apple and Google, over their respective App Store payment fees.

Epic CEO Sweeney was heavily involved in the fight against both tech giants, and also testified in court.

Epic and Sweeney achieved a victory against Google (but this is currently being appealed), but mostly lost against Apple.