Disney invests $1.5B in Fortnite maker Epic Games

Disney invests $1.5B in Fortnite maker Epic Games

The Walt Disney Company is investing $1.5 billion in Fortnite and Unreal Engine maker Epic Games, the two companies announced Wednesday. Together, they’ll build “an all-new games and entertainment universe that will further expand the reach of beloved Disney stories and experiences,” according to the news release. The partnership is awaiting regulatory approval, but something is expected “soon-ish,” according to an Epic Games video.

“The Walt Disney Company and Epic Games will collaborate on an all-new games and entertainment universe that will further expand the reach of beloved Disney stories and experiences,” a Disney representative wrote in a statement. “Disney will also invest $1.5 billion to acquire an equity stake in Epic Games alongside the multiyear project.”

Details on Disney and Epic Games’ “persistent universe,” which is described as being “a world-class games experience and interoperating with Fortnite,” are scarce, except that it’ll be a place dedicated to all things Disney, Pixar, Marvel, Star Wars, and Avatar. The announcement also noted it would be a place where people can “play, watch, shop and engage with content, characters, and stories” from those Disney franchises. It sounds like Disney is looking to create a metaverse-like product that’s a one-stop shop for the company, with no need to go anywhere else.

An image published alongside the news release shows at least four separate worlds dotted with different Disney franchises and companies. There’s one island where Marvel and Lucasfilm live in harmony, while Wreck-It Ralph has a high rise directly across from a Nightmare Before Christmas park. It’s not unlike the maps Disney makes of its real-life theme parks.

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

Disney and Epic Games logos on a black background. Image: Epic Games, The Walt Disney Company

Disney characters are already no stranger to Epic Games: You can make Spider-Man, Darth Vader, and Jack Skellington fight in Fortnite. That’s on top of Fortnite’s Marvel Nexus War event from 2020, which spanned a whole season. It was also announced on Wednesday that Rocket League, developed by Epic Games-owned Psyonix, will get a The Mandalorian update and event, which runs from Feb. 7 to 21.

Similarly, Lego and Sony made a big investment into Epic Games in 2022, each doling out $1 million to the Fortnite maker. The fruits of that partnership were published this year with Lego Fortnite, a Minecraft-like open-world building game. It smashed player records at launch, reaching 2.45 million concurrent players, and it continues to be popular. That, plus the release of Fortnite’s Rocket Racing and Fortnite Festival games, drew 7.6 million concurrent players at launch. With this success, it’s no surprise Epic Games is valued at $31.5 billion as of 2022. Fortnite alone brings in billions of dollars in revenue and only continues to grow.

All these successes, however, are in stark contrast to the reality of Epic Games’ business; the company is spending more than it earns, according to CEO Tim Sweeney. Epic Games also laid off 16% of its workforce, or about 830 people, in late September.

“For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators,” Sweeney wrote in an email to staff in September. “I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.”

While companies like Meta, Microsoft, and even Disney itself have pulled back on metaverse projects, Sweeney has kept Epic Games on course, even if it meant big investments and losing staff. His vision for the Fortnite metaverse is the one thing that’s remained consistent over the years. This Disney partnership may be one way that actually comes into focus.