– Less than a year after closing its Metaverse division, The Walt Disney Company has acquired a $1.5 billion stake in Epic Games to build what it calls an “enduring universe.”
Disney said in a Feb. 7 statement that the multi-year project, which is subject to regulatory approval, will be a gaming experience that interacts with Epic’s flagship game, Fortnite. The project will be a “universe of games and entertainment” allowing users to “play, watch, shop and interact with content, characters and stories” from Disney properties.
Tim Sweeney, founder and CEO of Epic Games, said the company will “create a robust, open and interactive ecosystem,” while Disney CEO Bob Iger said that “Disney’s entry into the world of gaming is hugely significant.”
Disney added that “players, gamers and fans will be able to create their own stories and experiences,” and Epic’s game engine, the Unreal Engine, will be the basis of a so-called universe, a meta-universe like project. No start date has been given for the project.
Disney’s decision comes less than a year after the company eliminated its Meta Universe division in March 2023 and laid off about 50 employees to cut operating costs. The year before that, the company was granted a patent for a “real virtual world simulator.”
Epic’s Sweeney has long been optimistic about the meta universe, and last May he ridiculed the idea that “the meta universe is dead,” citing 600 million monthly active users in several meta universes.
However, four months later, in September, Epic cut its staff by 16% (about 830 employees), saying that unrealistic revenue expectations for the meta universe had forced it to spend “a lot more” money.
Epic has collaborated on similar projects before: in April 2022, it received $2 billion from Sony and LEGO Group holding company KIRKBI to create the open-world survival game LEGO Fortnite.
The partnership announcement came on the same day Disney announced its first quarter 2024 results after a series of major box office and streaming failures last year.
Disney’s revenue for the quarter ended December 30, 2023 was $23.6 billion, slightly above the Zacks analysts’ projections. However, the revenue growth was marginal compared to $23.5 billion in the same period last year.
Disney announced it would pay a dividend of 45 cents per share, up 50 percent from January. According to Google Finance, the company’s share price held steady at $99 during the day, but jumped nearly 7 percent to more than $105 by the end of trading on Feb. 7.