“In addition to being a world-class games experience and interoperating with Fortnite, the new persistent universe will offer a multitude of opportunities for consumers to play, watch, shop and engage with content, characters and stories from Disney, Pixar, Marvel, Star Wars, Avatar and more,” Disney says. “Players, gamers and fans will be able to create their own stories and experiences, express their fandom in a distinctly Disney way, and share content with each other in ways that they love. This will all be powered by Unreal Engine.”
And that’s where the real value of the Disney x Epic partnership lives. As TLL has reported in past feature articles, the newest version of Unreal Engine is essentially a high-tech tool box for the creation of a hyper-realistic metaverse. Used for the development of animated movies, video games, virtual reality attractions and more, Unreal Engine radically cuts the cost and complexity of creating highly realistic worlds, allowing even small studios to create vast and highly detailed worlds, populated with thousands of unique people and creatures.
For Disney, CEO Bob Iger says it will allow the world’s largest entertainment conglomerate to extend its rich content offerings into new types of entertainment, primarily video games, but in other ways as well.
“Our exciting new relationship with Epic Games will bring together Disney’s beloved brands and franchises with the hugely popular Fortnite in a transformational new games and entertainment universe,” said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. “This marks Disney’s biggest entry ever into the world of games and offers significant opportunities for growth and expansion. We can’t wait for fans to experience the Disney stories and worlds they love in groundbreaking new ways.”
In fact, Disney has been working with Epic and its Unreal Engine for some time now.
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Disney and Epic Games have already engaged hundreds of millions of players through Fortnite content integrations, season collaborations, in-game activations, and live events. One of their collaborations was the Marvel-inspired Nexus War with Galactus, which drew more than 15.3 million concurrent players.
As well, Unreal Engine is used to produce assets and content across the Disney portfolio, including in the development of video games like Kingdom Hearts 3 and Star Wars Jedi: Survivor; in cinematic editing and animation for film and streaming; and in the creation of more than 15 Disney Parks attractions like Millennium Falcon: Smugglers Run at Star Wars: Galaxy’s Edge.
This all builds on Epic Games’ participation in the 2017 Disney Accelerator program, which seeks to impact the future of technology and entertainment.
“Disney was one of the first companies to believe in the potential of bringing their worlds together with ours in Fortnite, and they use Unreal Engine across their portfolio,” said Tim Sweeney, CEO and Founder, Epic Games. “Now we’re collaborating on something entirely new to build a persistent, open and interoperable ecosystem that will bring together the Disney and Fortnite communities.”
For Epic, the deal brings not just Disney’s massive and hugely popular library of content, and its industry leading roster of studios like Marvel, Disney, and Pixar, but also the global audience that has made Disney-owned brands the most popular in the world. In fact, in a report this past week from BrandTrends, a survey of 70,000 children and parents in 40 countries found that four of the world’s top kids’ brands are all owned by Disney. Those include Marvel, Disney, Spider-Man, and Frozen. Disney is also the world’s largest licensor in the entertainment sector, creating powerful synergies that will allow Disney and Epic to generate revenue from a wide variety of sources.
Another note on the strategy undertaken by Epic is that this deal follows a similar collaboration with LEGO, which not coincidentally is ranked as a global Top 3 children’s brand.
LEGO invested a hefty $2 billion in Epic which resulted in the launch of the video game LEGO Fortnite.
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That launch was probably the first real manifestation of Epic’s new strategy to combine top entertainment brands with its own expertise in the metaverse, and turning the Fortnite platform into more than just a video game, and more of a platform for other kinds of games and experiences, a strategy similar to that undertaken so successfully by Roblox.
It also creates a bridge between the physical brick building world of LEGO, and the digital, virtual worlds of Epic Games. The release of Lego Fortnite was coupled with Fortnite Festival (a music game from the creators of Rock Band) and Rocket Racing (a racer from the studio behind Rocket League).
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“This will enable us to bring together our incredible collection of stories and experiences from across the company for a broad audience in ways we have only dreamed of before,” said Josh D’Amaro, Chairman, Disney Experiences. “Epic Games’ industry-leading technology and Fortnite’s open ecosystem will help us reach consumers where they are so they can engage with Disney in the ways that are most relevant to them.”
While many might see the Epic/Disney partnership as primarily a move by Disney into videogaming, the digital image at the top of this story gives a better idea what the collaborators really have in mind, and it is at its heart a sprawling virtual world where people can hang out with friends, watch a Disney movie, play games, watch sports, go shopping, and so on.
In fact, promotional artwork looks like very much like a digital version of a Disney theme parks, familiar to anyone who has slogged through Disney World with the kids. There’s a “World of Disney” plaza surrounded by buildings with signage from The Nightmare Before Christmas, Cars, and The Avengers. Corporate logos for Disney Plus and 20th Century Studios are placed near an ESPN-themed stadium. In the background is what I take to be the entry to a Star Wars video game, where a battle on the frozen planet Hoth is underway. Surprisingly, there is even a small port where Disney cruise ships are docked! It’s not clear yet how Disney will offer up an all-you-can-eat buffet on a virtual cruise ship, but there is the benefit that no matter how much you eat, you’ll never gain weight.
The veteran gaming analyst Oli Welsh, senior editor for the industry publication Polygon, says it’s clear that the end goal here is the creation of an expansive metaverse that combines videogaming with all forms of digital entertainment and online shopping, based on licensed Disney content.
“Much like Fortnite itself, then, this will be a space where you can do more than just hop into X-wings and fly around blasting stuff. It looks like somewhere to hang out with your friends and gawk at cool, recognizable things; a level of social, virtual tourism is implied. But the interesting verbs in that line — the ones that suggest an expansion of what Fortnite already does — are “watch” and “shop.”
“Speculation aside, the notion that Disney is reaching out to offer its content to watch within an entirely new medium — essentially, taking Disney Plus to where Fortnite players are — is telling.”
Welsh also notes that in 2019, the streaming giant Netflix told its investors, ““We compete with and lose to Fortnite more than HBO.”
“The concept for the Disney-Epic project seems to be a hybrid blending Disney’s parks, licensed video games, streaming services, and stores in a single virtual space,” Welsh says, adding he believes services like Disney+ and ESPN will be on offer within the upcoming digital world they are creating.
Games Industry Growth & Disney Games Success
For Disney, this is also a bold move into the future. Unlike many companies that have failed to embrace revolutionary change due to technology, Iger and the Disney team have seen that video gaming has attracted a massive audience, and that audience is quickly turning into denizens of the metaverse. In a call to investors to discuss quarterly results, Iger made it clear that it is the 3 billion video game players worldwide that is the audience this partnership hopes to access.
“In terms of their total media screen time on video games, it was stunning to me – equal to what they spend on TV and movies,” Iger said during a call with analysts and investors after reporting quarterly results. “And the conclusion I reached was we have to be there. And we have to be there as soon as we possibly can in a very compelling way.”
Disney also notes that, as opposed to more traditional content, “The digital world is growing and evolving with more than 3 billion video game players worldwide who want to move safely and seamlessly between the worlds they love, unleash their own creativity, and experience great gameplay.”
That line makes it very clear that what Disney/Epic have in mind is a lot bigger than just releasing co-produced video games. It’s about creating a full, interoperable metaverse that allows users to jump between worlds, transporting seamlessly from Fortnite to Marvel, from a video game to a virtual theme park, and from playing to a social environment or a shopping experience.
It’s also worth noting that, while Epic is truly a giant in the video gaming world, so is Disney, although it relies more on licensing than in-house development.
“Disney’s games business continues to deliver strong results since it shifted to a licensing business model in 2016,” the company says. “Disney is a leading games licensor working with best-in-class developers and publishers, including on 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 Disney games franchises have each grossed more than $1 billion in sales. In the U.S., the world’s largest games market, licensed titles from Disney regularly hit the annual top-10 best-sellers list.”
Given all that, this partnership is a huge step forward for the development of a true, interoperable metaverse because it combines two video gaming powerhouses, the largest content company in the world, and the owner of the leading technology for creating both video games and metaverse worlds.
Competitors like Roblox and Minecraft have been incredibly successful in creating a metaverse experience that lends itself to retail and licensing opportunities, but the Disney/Epic deal is serving notice that there may well be a new leader in the metaverse arms race.
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