Disney acquires $1.5bn stake in Epic to bring Fortnite into the fold

8 Feb 2024

Image: © miglagoa/Stock.adobe.com

Last September, Epic CEO Tim Sweeney said the company was laying off 16pc of its workforce after spending ‘more money than we earn’ on Fortnite.

Disney is acquiring a $1.5bn equity stake in Epic Games to create a new entertainment universe, including the hugely popular Fortnite.

CEO Bob Iger said that this marks the biggest entry Disney has ever made into the world of gaming and offers “significant opportunities” for growth and expansion with a new games and entertainment universe.

“We can’t wait for fans to experience the Disney stories and worlds they love in groundbreaking new ways,” Iger wrote in a statement yesterday (7 February).

The deal brings into Disney’s fold Fortnite, the online video game released by Epic Games in 2017 that became a cultural phenomenon. Disney said that consumers will soon be able to play, watch and engage with content from Disney, Pixar, Marvel, Star Wars and more.

Gamers will also be able to create their own stories and express their fandom in a “distinctly Disney way” powered by Unreal Engine, the 3D gaming graphics tool used by both Epic and Disney.

“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,” said Tim Sweeney, CEO and founder of 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.”

Epic Games has been long engulfed in a legal battle with Big Tech, managing to score a major victory in December after an antitrust case between Epic and Google ended in favour of the Fortnite game creator.

The jury voted that Google has monopoly power when it comes to its Play Store and that it has engaged in anticompetitive practices. The jury also agreed that Google had unlawfully made a link between the Google Play Store and the Google Play Billing payment services.

While Epic Games filed cases against both Google and Apple, the case against the iPhone maker has been less successful. An appeal verdict from a US court was labelled as a “resounding victory” by Apple last April.

In September, Sweeney announced that the company was laying off 16pc of its workforce, or around 830 people, saying that Epic had been “spending way more money than we earn” to grow Fortnite and build the “next evolution” of the company.

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Vish Gain is a journalist with Silicon Republic