Disney Takes $1.5 Billion Equity Stake in ‘Fortnite’ Publisher Epic Games

Disney has taken a $1.5 billion equity stake in video game publisher Epic Games, creator of the “Fortnite” brand, as the media giant looks to expand its Disney, Pixar, Marvel, Star Wars and Avatar IP across the gaming landscape.

Disney CEO Bob Iger said the deal marks Disney’s biggest entry ever into the world of video games and offers opportunities for brand growth and expansion by enabling players, gamers and fans to create their own stories, experiences, and express their fandom “in a distinctly Disney way.”

“This new universe … provides us with a tremendous opportunity to not only meet more consumers where they are, but to allow more audiences to cultivate a bond with Disney’s brands and franchises,” Iger said on the Feb. 7 financial call.

Disney and Epic Games are no business strangers, having already engaged video game players through “Fortnite” content integrations, season collaborations, in-game activations, and live events, including the Marvel Nexus War With Galactus, which drew more than 15.3 million concurrent players.

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Disney’s games business has increasingly driven strong results since it shifted to a licensing business model in 2016 — spearheaded by the best-selling superhero game of all-time, Marvel’s Spider-Man. Licensed games from Disney garnered more than 150 award nominations, wins and other accolades in 2023, including multiple Game of the Year nominations for Marvel’s Spider-Man 2.

Disney mobile games have 1.5 billion global installs, and to date, nine branded franchise games have each grossed more than $1 billion in unit sales. In the United States, the world’s largest games market, licensed titles from Disney regularly hit the annual Top 10 best-sellers list.

Sony Looking to Further Bridge Anime, Movie, Video Game Markets

Sony is seeking to further meld anime, motion picture and video game markets through SVOD subsidiary Crunchyroll; a minority stake in Epic Games, publisher of the Fortnite game franchise; the PlayStation 5 game system; and other ventures.

Speaking on the Feb. 3 third-quarter fiscal call, CFO Hiroki Totoki said consumer interest in anime throughout Japan has increased 150% over the past five years, in addition to 19% worldwide year-over-year. Crunchyroll recently topped 90 million registered users and 4 million paid subscribers across more than 200 countries.

Indeed, anime movie sequel Demon Slayer: Kimetsu no Yaiba the Movie: Mugen Train, entered 2021 as Japan’s biggest box office hit, with more than $346 million in ticket sales through Jan. 5.

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“When the markets are growing, we try to enter such market to create our growth,” Totoki said. “But according to our internal investigation, those game players, the users that enjoy games and animation, it seems that there’s high level of affinity between these two groups.”

Totoki expects to see increased cross-selling opportunities in anime and gaming going forward. Sony’s recent $250 million investment in Epic includes development of movies and music. Epic is set to release its first animated feature film, Gilgamesh, directed by Tomas Lipgot, whose Spanish-language film, The Adopters, was recently acquired by Sony Pictures Television.

“That’s a new kind of entertainment in music and motion pictures for gaming,” Totoki said. “Consumer interest in Japanese anime is increasing rapidly, particularly outside of Japan. And as a company that currently owns both content and DTC streaming service, we have positioned anime as a focus area.”

Separately, Sony said it remains on track to meet a fiscal-year sales goal of more than 7.6 million PS5 units (4.5 million cumulative units sold through December) — despite ongoing console shortages due to a lack of semiconductors. Sony is projecting 14.8 million PS5 unit sales through the next fiscal year.

Total PlayStation user game play in December was about 30% higher than the same month of the previous fiscal year, according to Sony. At the end of December, 87% of PS5 users were subscribers to PlayStation Plus, the subscription platform affording users free access to games, multiplayer gaming, PlayStation Store store, and 100GB of cloud storage, among other features.

First-party PS5 title Marvel’s Spider-Man: Miles Morales, recorded sales of 4.1 million units through December.

“We had more game software titles at the launch of the PS5 than at any previous PlayStation console launch in our history, and those titles have sold well,” Totoki said.