Disney's top executives are reportedly interested in acquiring Epic Games, the developer behind the global phenomenon Fortnite, according to veteran tech journalist Alex Heath on The Town podcast. Heath revealed that senior Disney leaders are waiting for the optimal moment to make a bid for the metaverse-focused company, following Disney's previous $1.5 billion investment in Epic Games.
Fortnite stands as the crown jewel in Epic's portfolio, alongside its widely-used Unreal Engine development toolkit, generating substantial revenue. However, the past year has been challenging for the game, leading to Epic Games laying off 1,000 employees last week, partly due to declining engagement projected through 2025.
Disney already has deep ties to Fortnite, with numerous character skins and crossovers from franchises like Star Wars, Marvel, Pixar, and Disney animated classics. A highly anticipated Disney-specific mode, which promises to be a virtual hub for playing, watching, creating, and shopping, is also in development. Heath stated, "I know for a fact there are senior executives in Disney who want them to buy Epic and are just waiting for that moment, and then there are others who think it's a bad idea. If Epic ever sold, Disney would be the most natural home for it for a lot of reasons."
Heath referenced the upcoming Disney mode, with concept art resembling a virtual Disneyland park, suggesting it could become "Disney's gaming platform." Despite two years of development, there's no confirmed release date. Last year, Epic CEO Tim Sweeney dismissed a Wall Street Journal report claiming slow decision-making at Disney was hindering the mode's progress, calling it "BS." That report indicated the mode, announced in March 2024, wouldn't be ready before this fall, which seems likely to hold true.
Heath noted that Epic is a founder-controlled company, with Sweeney holding full voting stock control and making unilateral decisions. Sweeney has been known for his ideological battles, such as challenging Apple and Google over app store policies, which he acknowledged in a layoff email came at a cost to Epic.
Josh D'Amaro, who recently became Disney's new CEO, strongly supported the company's investment in Fortnite. It's believed he'll aim to make a quick impact this year, with the launch of Fortnite's Disney mode seen as a pivotal moment. Former Disney executive Kevin Mayer expects D'Amaro to take "bold steps" this year and expand Disney's gaming presence, telling CNBC, "I think Epic or some other video game asset would be a great addition to The Walt Disney Company's asset base."
Fortnite has faced challenges in diversifying beyond its core battle royale mode, with interest waning in racing, music, and LEGO modes launched in late 2023. Epic has admitted difficulty conveying that Fortnite is more than just a battle royale. Sweeney hinted at a new era in his layoff email, writing, "We'll be kicking off the next generation of Epic with huge launch plans towards the end of the year."
In announcing the layoffs, Sweeney cited a downturn in Fortnite interest starting in 2025, though analysts told IGN that declining player numbers in the battle royale mode are just one issue. Epic has faced costly legal battles with Apple and Google, funded the Epic Games Store to compete with Steam, and lagged behind the explosive growth of Roblox. Many fans feel the layoffs have unfairly impacted Epic's staff, while remaining employees express uncertainty about Fortnite's future with nearly a quarter of the company gone. The upcoming Disney mode could potentially revitalize the game's fortunes.
