Fortnite Maker Epic Games Set to Receive $1.5 bn Investment from Disney

Disney CEO Bob Iger unveiled plans for a significant investment in Epic Games, the publisher behind the popular video game Fortnite, marking Disney’s largest foray into the gaming industry to date.
Epic video game FortniteThe announcement detailed Disney’s intention to acquire a $1.5 billion worth of minority equity stake in Epic Games. Iger emphasized that the collaboration between the two companies would pave the way for the creation of an expansive “Disney universe” within the gaming realm, allowing consumers to engage with beloved characters and narratives from Disney, Pixar, Marvel, Star Wars, and Avatar.

In a statement, Iger remarked, “This marks Disney’s biggest entry ever into the world of games and offers significant opportunities for growth and expansion.”

The partnership represents Disney’s latest venture into interactive entertainment following the closure of its Disney Interactive Studios in 2016, which published the “Infinity” series of toys-to-life games. Disney opted to shift its focus towards licensing its characters to external game developers, Reuters news report said.

Additionally, Iger provided insights into the forthcoming streaming launch of ESPN, Disney’s flagship sports network, which is slated to be bundled with Disney+ and Hulu. The integrated platform will incorporate features such as ESPN Bet, fantasy sports, and e-commerce, with a targeted launch expected in August 2025.

Earlier, Disney had revealed plans to collaborate with Fox and Warner Bros Discovery to introduce a streaming sports service that amalgamates their extensive portfolio of professional and collegiate sports rights and networks, including ESPN, Fox Sports 1, and TNT. CNBC news report said the price for the streaming sports service will be $40 per month.

Despite challenges, Disney reaffirmed its projection that its streaming business would achieve profitability by September. Notably, the streaming segment’s operating losses decreased to $138 million in the quarter, representing a significant improvement compared to the previous year’s nearly $1 billion loss. Furthermore, the average monthly revenue per Disney+ user, excluding India, increased by 14 cents.

However, Disney+ experienced a loss of 1.3 million subscribers following a price increase in October. Nevertheless, the company anticipates gaining 5.5 million to 6 million Disney+ subscribers in the second quarter, with positive momentum in per-user revenue.

Disney’s Entertainment unit, encompassing its traditional TV business, streaming platforms, and film, reported a 7 percent decline in overall revenue compared to the previous year.

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