Disney is acquiring a $1.5 billion ownership investment in Epic Games to create a persistent universe compatible with Fortnite
An ownership investment in Epic Games worth $1.5 billion is being acquired by the Walt Disney Company in order to construct what it is referring to as a “persistent universe.”
This comes less than a year after the company shut down its metaverse gaming branch. Disney announced on February 7 that the multiyear project would be a game experience that would be compatible with Epic’s blockbuster game Fortnite.
Regulatory bodies would need to approve the project for implementation. The initiative aims to create a “games and entertainment universe” where users can actively participate in playing, watching, shopping, and engaging with content, characters, and stories derived from Disney’s assets.
Tim Sweeney, founder and CEO of Epic’s game stated that the two companies will “build a persistent, open and interoperable ecosystem.” On the other hand, Bob Iger CEO of Disney stated that this combination “marks Disney’s biggest entry ever into the world of games.”
In addition, Disney stated that “players, gamers and fans will be able to create their own stories and experiences.” Disney has not released any information about a launch date for the metaverse-like project, which will be powered by Epic’s gaming engine known as Unreal Engine.
The action by Disney comes less than a year after the company eliminated its metaverse business in March 2023, putting approximately fifty employees out of work in an effort to reduce its operational expenses.
One year prior to that happening the company was granted a patent for a “virtual-world simulator in a real-world venue”. Sweeney, who works for Epic, has been quite optimistic about the metaverse for a long time.
He has also made fun of the idea that the “metaverse is dead,” citing the fact that there were 600 million monthly active users across numerous metaverses in May of the previous year.
In September, Epic reduced its workforce by sixteen percent, or approximately eight hundred and thirty employees, citing unrealistic revenue expectations from the metaverse and an excess of funds. Epic has previously worked together on projects that are comparable.
The LEGO Group controlling company KIRKBI and Sony provided the firm with a total of $2 billion in April 2022 for the purpose of constructing a metaverse, which ultimately resulted in the creation of the open-world survival game LEGO Fortnite.
On the same day that Disney announced its earnings for the first quarter of 2024, the company announced the cooperation news. This comes after Disney had a string of major box office and streaming failures in the previous year.
As a result of Disney’s sales for the quarter that ended on December 30, 2023, which were $23.6 billion, the company narrowly surpassed the projections made by Wall Street analysts at Zacks.
On the other hand, the company’s sales growth stayed unchanged, as it reported $23.5 billion for the same quarter in the previous year. Disney has announced that it will pay a dividend of 45 cents per share, which is a fifty percent increase from the dividend that it paid out in January.
During the day, its share price remained unchanged at approximately $99, but in after-hours trading on February 7, it increased by nearly 7% to more than $105, as reported by Google Finance.