By: Nicole Salars

Who would have thought that Disney, the titan of children and young adult entertainment, would fall out of touch with generations Z and Alpha? Well, they have, and they are closing that gap in a new partnership with Epic Games.[1]

Disney has been busy in the last few years making strategic moves to expand their IP and cultural exposure base through streaming, with their largest merger thus far being with Fox Entertainment for a whopping $71.3 billion closing in 2019.[2] Keeping this momentum, on February 7, 2024, Disney announced a massive investment into the gaming sphere by acquiring a $1.5 billion equity stake in Epic Games, the owner of the gaming platform Fortnite.[3] This foray into the gaming industry is a bold move into the metaverse, as the partnership will allow a crossover of Disney characters from brands like Star Wars, Marvel, Pixar, and more to be able to exist together in one Disney universe.[4]

The Partnerships’ IP Impact

With the onset of the popularity of streaming services among Gen Z and Gen Alpha, entertainment companies have struggled with making streaming profitable.[5] By entering this partnership with Epic Games, Disney will be able to appeal to the younger generations through gaming. Fortnite itself is incredibly popular with young people, even for entertainment outside of just gaming.[6] In 2020, for example, Travis Scott had over 12.3 million Fortnite players participate in his “Astronomical” virtual concert.[7] Epic Games’ Fortnite is clearly a massive platform that Disney could stand to partner with to regain the attention of Gen Z and Gen Alpha.

This partnership will not only allow for new potential profit and exposure for Disney within the gaming space, but also will proliferate the presence of their intellectual property.[8] Prior to this partnership, Disney often licensed out their IP to third parties for gaming.  This partnership, however, allows Disney to slip into a position where its IP can be consumed more freely by younger consumers on a platform that they spend most of their daily time on.[9]

The nature of Disney and Epic Games’ partnership will allow Disney and Fortnite to be interoperable, meaning players will have increased access and exposure to characters and Disney franchises that Disney wants them to.[10] This gives Disney not only the opportunity to push their popular IP characters and franchises like Marvel or Star Wars, but also potentially revitalize their older IP  for a new generation to interact with and experience.[11] Josh D’Amaro, Disney Experiences Chairman, explained that this partnership will allow Disney to “bring together our incredible collection of stories and experiences from across the company for a broad audience…in an open ecosystem that will help us reach consumers where they are so they can engage with Disney in the ways that are most relevant to them.”[12][DQ1] 

Disney has long since been a leader in the technology-entertainment world. This partnership may be setting the competitive stage for other companies like Warner Brothers to enter into the gaming industry through the metaverse and expanding their IP via videogames to keep up with the times and to reach the younger generations. As younger generations alter the way that they consume media, like through videogames, companies like Disney must take strategic steps to keep up with the times. The Disney/Epic Games partnership is a major venture into this sphere, and perhaps will encourage Disney to enter into more IP-based partnerships in the future.

[1] Alex Weprin, Disney’s Reignites Hollywood Love Affair with Video Games, The Hollywood Reporter (Feb. 14, 2024, 4:45 AM) https://www.hollywoodreporter.com/business/business-news/disneys-epic-video-games-investment-1235824308/.

[2] Emily St. James, Here’s what Disney owns after the massive Disney/Fox merger, VOX (Mar. 20, 2019, 1:10 PM), https://www.vox.com/culture/2019/3/20/18273477/disney-fox-merger-deal-details-marvel-x-men.

[3] Alexander Lee, Why Disney’s 1.5 billion stake in Epic Games has implications far beyond gaming, DIGIDAY (Feb. 12, 2024), https://digiday.com/marketing/why-disneys-1-5-billion-stake-in-epic-games-has-implications-far-beyond-gaming/.

[4] Alex Weprin, Disney Invests $1.5B in Epic Games, With Plans to Create New Universe Featuring Franchise IP, The Hollywood Reporter (February 7, 2024, 1:13 PM), https://www.hollywoodreporter.com/business/digital/disney-epic-games-deal-new-universe-franchises-fortnite-1235818438/.

[5] Weprin, supra note 1.

[6] Todd Spangler, Travis Scott Destroys ‘Fortnite’ All-Time Record with 12.3 Million Live Viewers, Variety (Apr. 24, 2020, 6:01 AM), https://variety.com/2020/digital/news/travis-scott-fortnite-record-viewers-live-1234589033/.

[7] Id.

[8] Weprin, supra note 1.

[9] Id.

[10] Nick Rodriguez, Disney and Epic Games Are Teaming Up For ‘Games and Entertainment Universe’, GameRant (Feb. 8, 2024)

[11] Weprin, supra note 1.

[12] Ben Roberts, Disney x Epic Games: Why Brands are Investing in the Future of Play, License Global https://www.licenseglobal.com/trends-insights/disney-x-epic-games-why-brands-are-investing-in-the-future-of-play.