Disney is investing $1.5 billion in Fortnite maker Epic Games for a small fairness stake, marking the corporate’s greatest entry into the world of video video games, CEO Bob Iger mentioned on February 7.

With this funding, Disney plans to launch a brand new ‘video games and leisure universe’ that integrates the leisure conglomerate’s storytelling into Epic’s common sport Fortnite, enabling shoppers to play, watch, create and store for each digital and bodily items, Iger mentioned in the course of the firm’s earnings convention name.

Iger believes this deal will allow them to draw youthful audiences who’re enormous shoppers of video video games and are spending a major quantity of their display time on enjoying these video games.

“This new universe from Disney and Epic provides us with a tremendous opportunity to not only meet more consumers where they are but to allow more audiences to cultivate a bond with Disney’s iconic brands and franchises including Marvel, Star Wars and much more” he mentioned.

Iger mentioned this universe will enable folks to play video games that Disney creates, create their very own video games, work together with each other, and watch content material together with brief type movies. “We may even use the platform to distribute some of our content” he mentioned.

“Just as we take our IP (intellectual property) from our movies and television and have them express in our parks. This is a great way to do it in games” Iger mentioned. All these experiences will likely be powered by Epic Games’ sport engine Unreal Engine.

“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,” mentioned Epic Games founder and CEO Tim Sweeney

“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” he mentioned.

Longtime collaborators

Epic Games had participated in Disney’s accelerator programme in 2017 and each the corporate have collaborated on numerous initiatives in recent times.

This contains Fortnite content material integrations, season collaborations, in-game activations, and reside occasions, together with the Marvel Nexus War with Galactus, the place Marvel’s greatest heroes have been pitted in opposition to the cosmic villain Galactus. Disney mentioned this occasion on Fortnite drew greater than 15.3 million concurrent gamers.

The leisure large mentioned it has additionally used Unreal Engine to provide belongings and content material throughout its portfolio together with within the growth of video video games like Kingdom Hearts 3 and Star Wars Jedi: Survivor, in cinematic modifying and animation for movie and streaming, and within the creation of greater than 15 Disney Parks points of interest like Millennium Falcon: Smugglers Run at Star Wars: Galaxy’s Edge.

Disney shut down its online game division in 2016 and shifted to a conventional licensing enterprise mannequin, the place it licenses its IPs to builders and publishers. The firm mentioned that its cell video games have clocked 1.5 billion world installs, and up to now, 9 Disney video games franchises have every grossed greater than $1 billion in gross sales. This contains Marvel’s Spider-Man franchise, which was probably the most profitable online game final 12 months, Iger mentioned.

For Epic Games, this funding comes after it raised $2 billion funding from Sony and Kirkbi, a household workplace of the Kirk Kristiansen household, which based the Lego Group. In December 2023, Epic and Lego launched a brand new survival sport referred to as Lego Fortnite that is obtainable contained in the Fortnite sport.

The Apple angle

This funding can be noteworthy due to the contrasting relationship shared by each the businesses with tech large Apple.

Disney has shared a detailed relationship with Apple courting again a number of years. The leisure large purchased Pixar, beforehand owned by Apple founder Steve Jobs, for $7.4 billion in 2006.

In June 2023, Iger made an look at Apple’s annual Worldwide Developers Conference (WWDC) to announce a partnership that introduced its streaming service Disney+ to Apple’s Vision Pro blended actuality headset.

On the flipside, Epic Games has had an adversarial relationship with Apple and has even sued the iPhone maker over the enterprise practices of Apple’s App Store in 2020. Apple largely prevailed in the legal battle.

Earlier this month, Sweeney additionally criticised Apple’s proposed changes to its App Store policies within the European Union to adjust to the upcoming Digital Markets Act (DMA).