Disney Dives Into The Epic Metaverse With A Whopping $1.5B Bet: Another Magical Adventure Unfolds
Disney, previously withdrawing from the metaverse, now appears to partner with Epic Games to develop one.
Walt Disney Co. invests $1.5 billion in Epic Games for a “persistent universe,” reversing its prior metaverse division closure.
Disney announces a multiyear project with Epic Games, integrating with Fortnite, creating an immersive “games and entertainment universe.”
Epic Games’ CEO Tim Sweeney and Disney’s CEO Bob Iger collaborate to establish an open ecosystem, marking Disney’s significant foray into gaming.
Disney reveals plans for users to create their narratives in the collaboration with Epic Games, powered by Unreal Engine, with no launch date disclosed.
Disney’s recent move follows the closure of its metaverse division in March 2023, aimed at reducing operational costs, despite its earlier patent approval for a “virtual-world simulator in a real-world venue.”
Epic’s Sweeney remains optimistic about the metaverse, refuting claims of its demise and highlighting the significant user base across multiple metaverses last year.
However, Epic faced setbacks in September, cutting 16% of its workforce due to unrealistic revenue expectations from metaverse ventures, leading to excessive spending.
Epic has a history of similar collaborations, securing $2 billion from Sony and LEGO Group’s KIRKBI in April 2022 to develop a metaverse, resulting in the creation of the open-world survival game LEGO Fortnite.
The partnership announcement coincides with Disney’s Q1 2024 earnings release, following disappointing box office and streaming performances in the previous year.
Disney reported $23.6 billion in revenue for the quarter ending December 30, 2023, slightly exceeding Zacks’ Wall Street analyst estimates. However, revenue growth remained stagnant compared to the same quarter last year, which stood at $23.5 billion.
Disney declared a dividend of 45 cents per share, marking a 50% increase from the previous payout in January. Despite closing flat at around $99 per share, the stock surged nearly 7% to over $105 in after-hours trading on February 7, according to Google Finance.
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