Disney’s $1.5bn investment in Epic Games a ‘statement of intent’

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    Disney announced its intention to invest $1.5 billion. fortnite The developer is Epic Games.

    The investment will give Disney an equity stake in the gaming company, subject to closing conditions and regulatory approvals. form a multi-year project aimed at “A whole new world of games and entertainment”. Lego, Sony, and Tencent are Epic Games' other capital partners.

    This universe will interoperate with fortnite “Consumers like Disney, Pixar, Marvel, Star Wars, Avatar more”.

    “This marks Disney's largest ever entry into the world of gaming and provides significant opportunities for growth and expansion,” said Disney CEO Bob Iger. We can’t wait for fans to experience their favorite Disney stories and worlds in groundbreaking new ways. ”

    Analysis: Partnership evolution

    Disney and Epic Games have a long-standing partnership with multiple alliances. Together, they have reached hundreds of millions of players. fortnite Content integrations, seasonal collaborations, in-game activations, and live events.

    Epic Games also participated in the Disney Accelerator program in 2017.

    Tim Sweeney, CEO and founder of Epic Games, said in a statement: “Disney was one of the first companies to believe in the possibility of connecting their world with ours. fortnite And we use Unreal Engine throughout our portfolio.We are currently working with Disney fortnite community. ”

    Despite its history, it's still less than the $4 billion Disney paid for Marvel and Lucasfilm's intellectual property (IP), according to Matthew Day, global games strategy director for Essence Mediacom's play specialty division. But $1.5 billion is still a “significant number,” he said.

    the day it was said media leader: “Epic's revenue in 2023 was approximately $5 billion, so proportionately this is a fairly large investment in the platform. Recent mergers and acquisitions in the gaming industry, such as the merger with Activision Blizzard. [Microsoft] Xbox's amount is obviously much higher, but this is for a complete acquisition of the IP and studio. This investment is a softer partnership and clearly an evolution of the long-term cooperation between the two countries. fortnite And the Disney brand. ”

    cross play space

    Shay Thompson, a broadcaster covering the gaming industry, pointed to recent events. rumor Xbox plans to bring its exclusive first-party titles to other consoles like Sony PlayStation, allowing more people to play together across different platforms.

    “Disney and fortnite We’re going to look at that cross-play space,” she explained. “They could move in the direction of bringing as many games and experiences as possible to even more players around the world.”

    Thompson said opening up gaming is a “positive move” as long as it doesn't “stifle creativity.”

    Furthermore, she added: “If the games aren't good and if they're not creative, there's no point in having access to them. If they're just empty money-making machines.”

    financial commitment

    Another option for Disney, Thompson suggested, would be to leverage live service games that have been supported for a long time. She added that this “makes the most sense” given the titles in Disney's portfolio, but “is not economically viable” as these games require expensive upkeep.

    Thompson says that a “AAA game” (a game from a mid-sized or large publisher with a higher development and marketing budget) costs between $30 million and $80 million, and in some cases as much as $300 million, not including advertising. The average development cycle is 3 to 5 years.

    And while there appears to be a lot of money flowing into the gaming industry at the moment, she highlighted that there have been between 6,000 and 7,000 industry-wide layoffs across the world in the first two months of this year.

    Mr Thompson added: “It's a partnership that makes sense, especially in the long term. But we've been watching the whole Activision and Microsoft situation all last year, so maybe there's some fatigue with announcements like this. Maybe. And for people with leftist sensibilities like me, it's also capitalist monopolies joining forces.”

    metaverse strategy

    Thompson said the Metaverse was “conspicuously absent” from Disney's press release, but Day had a different theory.

    He said, “When Disney shut down its Metaverse division, many saw it as a sign of a change in direction from that field. ” I think it shows that they have pivoted to a different strategy of partnering with one of the platforms. fortnite.

    “'Multiple opportunities for consumers to play, watch, shop, and engage with content, characters, and stories' comes close to using the term 'metaverse,' but clearly the ambition is the same; It's clear that that remains an important part of Disney's strategy going forward.”

    Day added that Disney's relationship with games has “never gone hand in hand,” and that many characters appear in the games.with marvel Star Wars The effort is likely to be “even more pronounced” in the stable. But Disney's investment is a “more direct statement of intent” to “create a unique destination within a huge gaming platform,” he said.

    Is the Metaverse “dead in the water”?

    What does this mean for advertisers?

    Nick Wright, Chief Growth Officer, Havas Media Network UK, said: media leader This partnership reflects a more connected experience for consumers.

    He explained: “Entertainment is intellectual property brought to life through a series of disparate yet connected experiences. Consumers don't think of these as silos. , who are also gamers. The partnership between Disney and Epic Games reflects the need and ability to engage with consumers by adapting stories across multiple touchpoints from a “lean” perspective. The “back” nature of movies and the “tilt” nature of games.

    “This is a win-win from a brand and consumer perspective. Consumers get a deeper and broader experience with what they love. Brands can increase profitability and fan engagement. As a result, you will be able to “sweat your assets” more than ever before. ”

    Considering the opportunities for advertisers, Day said, “The possibilities are truly endless,” and the question is how accessible the advertising medium is and how the offer matures over time. Stated.

    He explained: “Brands, certainly brands that are already looking at gaming and gaming audiences, are very interested in knowing what opportunities, if any, there are in the future. “And companies that already have business relationships with Disney will probably be the first to start taking advantage of it.”

    However, for gamers, the reception seems to be “less clear.”

    The day continued like this. fortnite In particular, viewers have repeatedly shown how much they love the social aspects of the platform and the non-gaming “events” held there, such as music concerts and trailer debuts, which will help Disney's service build on its existing strengths. There is no doubt that it will have a huge audience. fortnite user base.

    “However, mass game viewers fortnite It all depends on the strength of the content Disney puts in its “Persistent Universe” to attract new users. The odds are in Disney's favor due to the strength of its intellectual property portfolio. ”


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